The Small Business Revolution Will Be Measured
In 2015 I predict we will see a rise in the number of small- and medium-sized businesses (SMBs) that collect and analyze data for improving operational efficiencies, reducing risk, and better meeting customer needs.
People tend to think of big data and business intelligence as living mostly in the realm of the big enterprise. Large businesses have been in the forefront of mining data for finding actionable insights. Meanwhile SMBs have been mostly trapped in a world with paper, pencil, and Excel spreadsheets, depending primarily on their intuition to make decisions.
As management consultant W. Edwards Deming famously said, “You can’t manage what you don’t measure.”
Fortunately for SMBs, things are shifting. Tools and storage are becoming increasingly affordable, and software-as-a-service (SaaS) companies are taking advantage of the democratization of data access. Now services like customer relationship management, e-mail marketing, online billing—and the data that comes with those services—are within reach of all businesses, no matter the size, for an affordable monthly fee.
According to SMB Group, about 18 percent of small businesses and 57 percent of medium-sized businesses use business intelligence and analytics solutions. With the help of SaaS tools, SMBs are collecting everything from customer preferences and purchasing habits to insight from interactions through social media and e-mail marketing. As long as data collection continues to be inexpensive and doesn’t put significant drag on actually getting things done, SMBs will find that it’s always worth holding onto data.
As more SMBs learn how to collect and interpret their data, we’ll also begin to see a corresponding increase in the type of data-driven decision making typically practiced by large companies.
For example, Marka Jenkins Waechter, owner of Fruition Yoga and Wellness in Seattle, is able to monitor which instructors bring in the most clients, ensuring proper compensation and recognition. She can also analyze which days and class times are the most valuable for her and use that information to inform her schedules going forward. Before moving to a SaaS solution to manage her business, Waechter’s decisions were based solely on her intuition. Now, with access to her own data, she’s able to make more informed business decisions that result in increased revenue and happy, loyal clients.
2015 will be the year that small business owners operate with the same data advantages their enterprise counterparts have enjoyed for years. This advantage will come at very little expense and tremendous benefit to their bottom lines and customer relationships.
[Editor’s note: Click here for more 2015 predictions and related posts from experts around the Xconomy network.]
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