Every business depends on customer data for making better decisions. Data collection and analysis through technology helps businesses to draw conclusions about their customers such as:
- Who are your customers?
- What do they like to buy: trends and behaviours?
- How to better engage them?
- How to draft effective marketing campaigns that appeal to your customers?
Let’s get into details:
What is Data Analytics?
Data analytics is the process by which large sets of data are examined for patterns. We humans always perform some data analysis for making decisions or drawing conclusions. With computers and appropriate data analytics tools, businesses can process a larger amount of data in a shorter time and generate useful results.
Data analysis begins with identifying the type of customer data that is needed. It’s important to make sure that the data is collected from a reliable source. The data that is not credible may give the results that are not true, leading to inaccurate business decisions.
Specially for the businesses in Singapore, it’s very necessary to collect data in compliance with the Personal Data Protection Act. The PDPA considers that the business has
-taken the ‘consent’ from the customer to use his data
-have informed the customer of the ‘purpose’ of data collection
Data analysis can be performed for various purposes in a business. Some common types of data analysis include:
- Predictive analysis: studying past trends and make predictions for future business.
- Descriptive analysis: analysis of the collected data to find out about performance, sales, revenue, and much more. It describes the data which is being analyzed.
- Diagnostic analysis: analysis to know the reason behind a positive or negative trend found in descriptive analysis.
- Prescriptive analysis: data is studied for making data-driven decisions. Businesses make plans of action based on the results of the analysis.
Why SME needs data analytics?
Small-Medium Businesses are the support system of the economy. Therefore, the growth of SMEs is important for a healthy economy. Data analytics is currently the best way to understand SME and here are the reasons why SME needs data analytics:
1. Know your customers: understanding buying habits and recognise trends
Business activities largely depend on customer behaviour. Understanding customer behaviour precisely and accurately goes a long way towards the success of a business. The SMEs that aspire to grow quickly need to perform analysis of customer behaviour regularly. Data analytics has made the job easier. Businesses can track the buying habits of different customers and recommend the products that might be useful to them. For instance, a garment shop needs to know the current trends and recognise the buying patterns of customers to be able to succeed in the market. With enough customer data and detailed analysis, businesses can grow sales.
How can you really know your customers? The answer is to have a smart CRM system that collects the data of your customers, analyse it and give you information like: Who are your regular customers? How frequently they visit? Who are your top spending customers? What do they buy?
2. Create effective marketing and engagement strategies
Data analytics provides businesses with knowledge that can be used for making better marketing strategies and campaigns. Data analytics identifies trends and patterns from customer data which can be used for creating a successful recommendation system. Businesses can identify the strategies and campaigns which have led to purchases in the past. The biggest benefit of using data analytics is the visibility it provides to businesses. With an analysis of customer data, SMEs can engage customers with personalised advertisements, emails, and offers on products and services.
3. More targeted marketing using your website & social media
As a business, you would be definitely familiar with ‘social media marketing’. But do you know how it works? Social media marketing is nothing but a set of algorithms that work on datasets.
Here is how collecting your customer’s data will help you run effective Facebook or other social media ads:
- You can create lookalike audiences based on the customer data
Now that you have the golden mine of data, you can create lookalike of your customers and target them with relevant ads. You can play with many combinations like lookalike of customers with ‘high average spent’ and ‘low average spent’.
- You can target your customers based on their demographics, like gender, age etc
With your magical data you can determine details like which of your products or services do women like to buy? What do most people in the age group of 21-30 years buy? Etc. And facebook does allow you to target accordingly.
So, all you need to do is have a system to collect data of your customers. The technology today will take care of mostly everything after that.
4. To increase operational efficiency and control costs
Operational efficiency can be boosted using predictive analysis. Businesses can reduce outages and increase production to meet future demands as predicted from the data. With a detailed knowledge of the present trends in the market and the possible trends of the future, SMEs can estimate the costs. This can be an effective manner of cost control. Customer services can be improved significantly by studying customer data and understanding their needs. It improves brand loyalty which guarantees a constant sale of products.
5. Keep track of your competition
A business can succeed when it has good knowledge of the competition in the market. Data analytics lets you understand the strategies of your competitors. Social media is a great space to analyse your competition and it is made possible with data analytics. This is termed as competitive analysis, where businesses identify the strengths and weaknesses of their rivals. Once you know your competitors well, you can develop effective business strategies.
How can SMEs collect customer data?
The first step towards data analytics is by collecting customer data. One of the best ways to collect reliable customer data is through the CRM-loyalty program. Loyalty programs are a type of marketing strategy that offers rewards to customers for their loyalty towards the business. With the fast-growing technology, the customer enrolment is generally very quick and seamless. Businesses can reward customers with some welcome vouchers, complimentary beverage, or any low-cost merchandise for signing up into the loyalty program. It is an effective means of collecting customer data from reliable sources as the business can collect the customers data to engage in the future, while the customers receive instant gratification. This way, it’s a win-win for both the business and the customers.
Other means include market research, web analysis, social media scraping, online surveys, and point of sale data gathering.
Customer data is important for every SME to grow and data analytics is a means to achieve that. With data, analytics businesses come out of the traditional means of customer satisfaction and have a more accurate and reliable plan of action. Therefore, data analytics is a novel approach to gain an edge over your competitors in the market.