The topic of data insights terrifies many small to medium sized enterprises (SMEs). While the majority of owners and managers will appreciate that their business is constantly collecting data, it can feel like a steep mountain to climb to access and make sense of this information, not least because time is – as always – of the essence.
We undertook some research to uncover how SMEs across the UK are currently utilising their customer data, if at all. The results were quite startling; a massive 50% of SMEs admitted that they only know their customers “fairly well”. A further 42% of SMEs say they tend to go on ‘feel’ rather than using data-led insights to understand their customers’ purchasing behaviour.
Digging for data doesn’t have to be scary
SMEs up and down the country come in varying shapes and sizes and offer a multitude of products and services to the end consumer. Within these businesses sits an equally varied range of employees and leaders that bring different qualities to the business to help it succeed. Not all of us are numbers people, and luckily today we don’t all need to be, thanks to technology.
For those of us that bring non-mathematical expertise to the running of the business, data needn’t be a source of fear. Today, technology can mine and analyse your business data for you so you’re quickly and easily presented with the facts. Taking the plunge with data insights will help to improve customer relationships, create new targeted marketing initiatives and, crucially, grow the business.
Data will help you find loyal customers
Knowing your customers only “fairly well” won’t cut the mustard in today’s competitive business landscape. Understanding the profile of the people you want to sell to can make or break you. Today’s consumer is very savvy about spending, they do their research on and offline before committing to a purchase. With reports of up to 81% of shoppers conducting online research before buying, businesses cannot afford to lose a customer by the time they visit you in-store. Be aware that many of your customers do their research before buying.
While no two customers are the same, there may be trends in the way people purchase - during specific seasons or sales peaks, for instance. It’s near impossible to spot some of the less typical trends without analysing customer data. By doing so you can start to build a richer picture of your customers’ likes, dislikes and purchasing habits outside of the typical sales peaks. You need data to help you understand the best products to promote and when, the best approach (from a sales perspective) with which customer profile and the amount of product to stock to accommodate your customers’ needs
Customers are far less brand loyal now, for them it’s about sourcing the best value for money and having access to the product or service when it is convenient for them. If you don’t have the stock when they want it they will simply go elsewhere. Ensure you are one step ahead by utilising data, by doing so you will come to be seen as a reliable source for the products and services customers need when they need them.
Data is the incentive you need to grow
If creating loyalty is all about pre-empting your customer’s needs, you need your operations to be responsive to data analysis in order to be able to deliver effectively. The stockroom is a natural place to start, given customers’ tendency to walk away from businesses who can’t meet their needs instantly. Ensuring your operations are connected and responsive will mean that, as a business owner, you won’t need to grapple with a mental to-do list 24/7.
Data can report on low stock levels, and technology can connect with your suppliers to ensure items are reordered before you completely run out. Business owners don’t need to pick up the phone or send an email, stock management can literally manage itself without the need for the owner/manager to lift a finger. This safeguards the business against disappointing your customers and builds all important trust in you as a reliable source.
Data records on stock levels can also help reveal trends in purchasing behaviour, beyond the obvious, and help you to coordinate marketing initiatives and promotions. This is the area of the business that owners and managers should be really focussed on to ultimately drive growth and revenue. Any marketing activity that isn’t rooted in data isn’t going to provide a good return - a failed marketing initiative is simply a loss to the company if it isn’t executed effectively.
Having technology rooted to the backbone of the business means that SMEs can flourish thanks to the insights data provides. Diving into your data will cut any costly assumptions made about your customers’ needs, ensuring you deliver a consistently good service that they want to return to again and again. The insights data provides will also help businesses operate more efficiently and market the business in a smart and effective way. In short, a business that isn’t founded in data analysis isn’t likely to be an effective business at all.
By Hetal Patel, marketing director at First Data
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