The quantity of data is accelerating and the use of analytics is exploding. Can data analytics for SME businesses work? Absolutely, it can.
How Can Data Analytics for SME Businesses Work?
In short, the possibilities are endless. An obvious area is understanding customers. You could have thousands of customers or just a handful.
You could look at a single customer's history and perhaps gain insight into what they might do next.
Or, you could look at a lot of your customers who are similar to that customer and understand what those customers did next. Maybe some of those similar customers are now ex-customers. Was there an indicator? Is there something you could do today to reduce the likelihood of similar customers also becoming ex-customers?
The key of course is doing the analysis, finding the indicators, and acting upon them. Even better, building these into normal processes. This could be given fancy terms like predictive analytics or machine learning.
Many SMEs will think that something like this is already happening. But there is a big difference between experience and gut-feeling compared to experience and gut-feeling empowered with accurate and timely analytics.
And remember, Data Analytics for SME Businesses isn't just reserved for customers. It can look at any aspect of the business including operations, staffing, product, and services.
The keys are developing a clear data strategy, being able to manage the data (and combine different sources), find the insights and/or build the predictive style models, and act on those insights or models.
Data Insight Actions To Take Now
With respect to customers, here are three actions you can take now:
- Understand the Quality of your Customer Data. Be realistic. Is all your customer data in one place? Do you have similar information for every customer?
- Work out one key customer question that your data can answer or shed light on. Just one. My post on Question Frameworks might help with some ideas.
- Use your data to get an answer to your question and act on it. Acting on it will make it real.
Those steps sound easy because they are in the right situation. You'll soon learn data quality is central to data analytics. You'll also learn that good questions take work and that acting on insights requires a leap of faith.
Data Analytics for SME Businesses needs to be focused and it needs to get results. It needs to happen. Visualization is one way to understand the possibilities.
How Does Data Visualization Fit with Analytics
You can have the best data in the world but in reality, it's just data. By itself, it's hard to interpret, monitor, and gain insight from. Data visualization is a tool to help unlock potential insight and also to clearly communicate those insights. Visualization to unlock Data Analytics for SME businesses is very powerful.
Enough words. Let's take a look.
Below is an example from some customer transaction data for the year 2016. It only contains a Customer Identifier, transaction date, and transaction value. The full list for the year contained nearly 12,000 rows and included transactions made by 84 different customers. It's a small set of data.
That table of transactions is not very helpful (can you imagine scrolling through 12,000 rows?). You may also think that with just those 3 fields it wouldn't contain much value.
After just 2 minutes (I timed it) I created the following 2 tableau visualizations of the data:
I'm not going to draw any conclusions from the visualizations. It should be clear that the visualizations are valuable. If you spend another minute reviewing them I'm sure the next level of question may surface (and that's the point!). The Tableau Visualization section of this site explores visualizations in much more depth.
So for me, it's not really a question of can data analytics for SME Businesses work? It's more a question of just how much value can it unlock if used well.