Big data. It’s the stuff which “big boys” use to make business decisions.
Consider a bank, for example. That bank provides all sorts of accounts for its customers; it offers all types of investment and loan products to consumers. How does that bank make decisions about what types of accounts, investment opportunities, and loan products it offers?
Traditionally, the bank tried to figure out what consumers might want through “hit and miss”. And then, it looked at consumer response to those offerings. Those products that were not popular were dumped and new options were then offered.
Enter Big Data
Technology has changed all of this. Now, any organization has the ability to capture big data. There are algorithms, crafted by data scientists, that capture huge amounts of data from everywhere on the web, churn and analyze that data, and answer questions that businesses have. That bank now has a “scientific” answer to its questions about consumer financial behaviors, issues, and needs. It can now develop products that consumers will find valuable, rather than relying on “gut feelings” and guesses.
Every industry now uses big data to get answers and make business decisions. And any company that does not use it is being “left in the dust” by its competitors.
Big Data is Not Just For the “Big Boys” Anymore
Until now, startups have not tapped into big data analytics, and for good reason. They have not been able to afford a data scientist, either as a team member or on a consulting basis, to get the valuable information they need as they move forward with their idea and launch. They are like the bank of years ago – developing products and services on hunches and best guesses, based on limited research.
At the same time, most entrepreneurs understand that big data is critical to their success. The amount of data that is generated on a daily basis provides critical information that they are missing out on, as they develop their new products or services.
Here’s the good news: Big data solutions have become much more affordable in recent years, and startups would be well-advised to make room in their budgets for these solutions. And now, not only are these solutions cheaper, but implementations are also simpler and often automated through a number of companies offering them.
Advantages of Startup Use of Big Data
Here are the key reasons why startups should be accessing big data analytics:
How large is your potential customer base? Who are your potential customers and where do they hang out online? What are their past behaviors relative to the product or service you will be offering? What do they most value in a product or service you may be offering? Where have they found these products or services in the past? How much are they willing to pay for them? When do they make decisions to buy?
How valuable would this information be for you to focus on providing a customer-centric focus for your business and to be able to track the digital footprint of your prospective customer base? Think about the importance of that information as you develop a marketing campaign.
Big data can tell you when, why, and how customers leave a company. What is the average lifetime of keeping a customer in your niche? This will allow you to leverage data and give you the insights you need to avoid the mistakes your competition is making. You will be able to refine your marketing and sales tactics, improve customer interactions/satisfaction, and keep your startup competitive.
If your startup requires a team, and this is certainly a cost item in your budget, then you can use big data to configure and improve your internal operations, especially in the areas of human resources, research, production, and logistics. It can also measure your finances, a pretty critical component for a start-up. Using big data analytics, you will be able to re-organize even the most intricate facets of your startup to conserve personnel productivity and budget.
There are several aspects of data in this arena.
You can collect data on both successful and unsuccessful startups in your as well as related niches. That data can provide a better roadmap of effective and failed practices – data that can help guide you through your own activities. What did the successful companies do that the unsuccessful ones did not? At what point did failures occur?
Big data will also show a target audience’s preference for devices. While we know, in general, that the younger a target audience, the more mobile devices are used, there are other key aspects to the use of these devices. Data will demonstrate the most active time of day and most active days of the week of a target audience’s most-used types of devices.
This information can and should impact your marketing strategies and activities.
One of the key marketing tools for startups is social media. But which platforms are the best for your target audience? Big data collection and analysis will provide key information about demographic use of social media – which platforms are most popular, and, again, which times of the day and which days of the week are the most frequented. From this information, a startup founder can choose social media marketing based upon “science” rather than hunches. This is both a time and money saver.
This is perhaps one of the easiest aspects of the collection of big data. There are a huge number of services that will provide a startup founder with alerts anytime his company or its products or services are mentioned. This can be gathered from oceans of unstructured data, sorted, and reported to you as it occurs. You are thus provided with an immediate opportunity to respond to both positive and negative comments that may be posted – the opportunity to improve communication and relationships with a target audience.
One of the things that impacted the huge growth of companies like Uber and Airbnb was that they made the decision to access big data to look for new demographics they could target. Ultimately, they were able to expand globally. While many startups will not be global in nature, they can still use data to expand their potential audience targets and reach out to new demographics. Consider the number of Chinese e-commerce companies, for example, that have expanded into the U.S. with their products. They did not move into that market without plenty of research up front, and big data can provide just that to any startup. And moving into a new market before the competition gets there is a huge advantage.
As access to big data becomes easier and increasingly less expensive, startups will “up their game” by using it for anything from determining the viability of a product or service to streamlining their business operations, to expanding their target base, and more. Truly, big data is now for everyone, and it is one more step in leveling the playing field between large enterprises and smaller companies vying for their share of the market place.
Kristin Savage is interested in writing and planning to publish her own book in the nearest future. Also, she has been a reviewer at Pick Writers for a few years and is known for her thorough approach to accurately assess newcomer translation services. You can find her on Facebook.