Data Analytics ForSmall Business: Here's Why SMEs Must Adopt It
Small and Medium-sized enterprises, or SMEs, are businesses that make up the majority of the business scene of the world. Generally, companies with less than 50 workers are classified as SME, but that is not an axiomatic definition. Different countries set the limit differently on the factors that categorize the institution as an SME. For most companies, the upper limit goes up to 250. The sector is considered an area of interest to the economy due to its social and economic benefits.
The Data Analytics Market
Data analytics are already prevalent in the established business institutions. According to recent statistics, just the Big Data analytics market is slate to reach a value of $103 billion, clocking a 20% growth. Among the functioning organizations, 83% have already embraced the Big Data analytics pathway and investing in related projects. As per expert opinion, data analytics is more valuable than oil in recent times because, unlike oil, data is easily available, effortlessly extractable, and has limitless potential.
However, some people think that data analytics tools for small business are over-expenditure. The notion is ludicrous as SMEs also generate scalable data like any other business, collected, assimilated, and analyzed by the data analytic tools. It will help reveal concealed patterns, recent trends in the market, customer preferences, and other insights. With the correct information, the SMEs can also increase their profitability and face any challenges.
Why Should SME's Adopt Data Analytics?
The efficiency and utility of any business analytics tool would not change with the size of the business. With the proper collection and compartmentalization of data, data analytics for small businesses can be a beneficial and vital aspect of SME strategy establishment. Some reasons why SME's should adopt the advantages analytic tools have to offer are given below:
-
Reduction Of Overall Costs
The efficiency of operation in an SME can reduce the cost in the long run. Using data analysis tools for small business, SME's can provide information about the company's problematic areas that reduce the overall efficiency. The institutions can then rectify these issues and save on operational costs.For example, business analytics tools may reveal a service provided by an SME in which no customer shows any interest. The SME can then discontinue these services and save on operational costs.
For example, business analytics tools may reveal a service provided by an SME in which no customer shows any interest. The SME can then discontinue these services and save on operational costs.
-
Reduction Of Overall Costs
The efficiency of operation in an SME can reduce the cost in the long run. Using data analysis tools for small business, SME's can provide information about the company's problematic areas that reduce the overall efficiency. The institutions can then rectify these issues and save on operational costs.For example, business analytics tools may reveal a service provided by an SME in which no customer shows any interest. The SME can then discontinue these services and save on operational costs.
For example, business analytics tools may reveal a service provided by an SME in which no customer shows any interest. The SME can then discontinue these services and save on operational costs.
-
Optimization of pricing decisions
Pricing of the products and services play an essential role in the success of an SME. Using a business analytics tool, SME's can determine whether the price of their products is too low or high as per the market trend or their competitors. This data can help the company set the optimized price and maintain and even sell their products.
For example, let us consider a product with a final sale price of $20. Analysis of the SME's business finances and the competition revealed that most other companies are selling it in the price range of $12-$17. So, the company would increase its sales if they reduce the price to $12-$15. This is how data analysis tools for small business can help SMEs grow their revenue.
-
Increase in sales and revenue
Big Data analytics have increased the revenue stream significantly for high-value businesses and can also do it for SME's. The companies can collect data about their customer's preferences and buying patterns and arrange for more production to maintain the demand. With the customer preference data, SMEs can predict the customer's future buying and provide personalized services, improving customer satisfaction. This practice will generate more leads and conversion, resulting in increased sales and revenue generation.
Let us understand the concept through an example. A business analytics tool may find out that one customer always buys coffee from a specific company situated in Colombia. This data will indicate that they prefer their morning beverage to be the best quality and is prepared to pay for it. The SME's can now recommend other related products and brands, resulting in a probable high-value sale.
-
Ensuring a competitive advantage
Dana analytics allow the SMEs to focus on the requirement and inclinations of the local customers. The tools can collect data from the local market and provide insight into buying trends. The SMEs can gauge the likes and dislikes of the customers and understand their primary requirements by the different analytic tools, which allow them to personalize the products and services and create a competitive edge over their competitors. These tools can also search through the digital activities of their clients – reducing the need for manual work from the SMEs.
-
Improving efficiency in business-decision making
Social media is now utilized as a treasure trove of customer data. Business analysis tools now mine unstructured and structured data from various social media platforms, like Twitter, Instagram, Facebook, and LinkedIn. SMEs directly can collect and analyze data about their customers from multiple social media platforms and create valuable insight about their purchase behavior, preferences, responses to different deals and promotions, and others. This information will be instrumental in developing targeted marketing campaigns for specific consumer divisions.
Utilizing data processes and tools will automate social media mining for the SMEs, eliminating the need for ones with limited resources to manually check them, leading to effective and proficient strategic marketing decisions.
-
Optimize team performance
In addition to the above benefits, big data analytics for small business can provide pertinent information about the SME's marketing team. The company can know the best-performing employees and identify the ones requiring more training or additional resources. Analytic tools can generate effective strategies that increase productivity and keep the workers happy.
Utilizing The Obvious Benefits
Business institutions of importance, encompassing healthcare, retail, media, and energy sectors, have benefitted from data analytics which provided them valuable insight into their customer’s requirements. The SMEs can also enjoy the same through the use of various data analytic tools available in the market. Although, the data analytics for small businesses they choose must provide relevant analysis towards the company's business target so that the decision-making authorities can implement an effective business strategy.
