Think data mining—the practice of searching stores of data to discover patterns and trends that go beyond simple analysis—is only for big corporations? Think again. Basic data analysis should be foundational to any business. TheYoung Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses. BlackEnterprise.com reached out to the collective to learn: How/Why should small business owner mine user data? Here’s what they had to say:
1. To Find Out Who Will Buy
Small businesses should mine their customers’ data to know who is most likely to buy. Most businesses keep records of different customers’ purchases. Looking at this data as a whole and running simple averages on a spreadsheet will tell you when people are most likely to buy and the characteristics of a potential buyer. Knowing the “who” and “when” answers will help you decide how to best market your business.
2. For Suggestions About New or Existing Products
Apart from listening to customers, we take time to look at the interaction of potential customers on our website to determine what is it exactly that they are looking for. We engage with them in chat but are also able to track a lot of information on the pages they visited. Once we see what they did with the chat conversation, we are able to connect the dots and come up with a new product or request.
– Derek Capo, Next Step China
3. To Identify Quality Channels for Advertising
Depending on the user data, you can sometimes find very interesting correlations between your company and a good advertising platform. A good example would be investing more money into Bing advertising if you were to find out that you get a bunch of leads from the Bing search engine that convert more than any other search engine. You can even discover consistencies in bookmarked websites of ideal candidates.
4. To Help Future Customers
You’ll never know how to really help new customers if you’re not aware of everything that’s going on with current customers. Mining their data and looking for patterns is one of the easiest ways to help them. It’s also a good way to figure out what’s working and push it 10 times harder. Learn from the past.
5. To Drive Growth
It sounds strange, but getting your data reporting in order is the key driver for improving speed through the build-measure-learn loop and driving growth. Once your team is routinely looking at your key metrics in the middle of the funnel (i.e. activation, retention and referral), they can’t help but be motivated to iterate and make them better. As Peter Drucker said, “What gets measured gets managed.”
6. To Monitor Marketing ROI
It is crucial to use tools such as Google Analytics to monitor marketing ROI. We have different ROI targets for various marketing mediums. We are constantly monitoring them to reduce spend on underperformers and ramp up spend on areas that are far exceeding our targets to maximize overall ROI.
7. To Generate Insights for Long-Term Planning
SMBs should mine their data because it’s an asset they already own. They can use existing data to glean market insights for long-term strategy and more granular customer insights. This information can be used in aggregate to generate reports or studies to educate internal teams or customers on best practices, as well as to develop targeted product roadmaps.
8. To Generate Loyalty
Small business owners have many great tools available to begin mining user data for insights that can help improve business. In particular, there are fantastic Point-Of-Sale (POS) platforms that induce loyalty and can help small business owners track which products are most popular. Take advantage of these tools to position your business above competition and garner favor with clients since you’re using data to empower your decisions.
9. To Make Informed Decisions
An advantage to collecting data is you quickly recognize patterns and trends in user behavior. Identifying what those things are and what they mean to your customer enables you to make better decisions about your business. Armed with this information, you may improve company practices, products and marketing to serve your clients to the best of your ability, in a manner that resonates well with them.