Every business generates “data” (a fancy term for information) of one kind or another. That data – and especially customer data – can help you understand your market better and sell more effectively.

When customers buy something from you, change an order, request information, provide an email address or take other action, they create clues about who they are, what they want and how your business can better serve them.

Small businesses that capture and analyze such information can use it to spot trends and patterns, avoid pitfalls and pump up profits. In the big business world, this is known as data mining and enters the realm of “Big Data.”

But small business owners can do it with tools that might include a simple spreadsheet or one of the online data analysis services I’ll mention in a minute.  

A key reason businesses use data analytics is to get better insight into their customers so they can improve their marketing efforts. The idea is to step back and look for connections that were probably there all along, but may have been invisible to you.

Information you already have might tell you that most of your customers live in a certain area or share other specific needs and traits. But not until you delve into the data do you see, for example, that they're mostly in their 30s and 40s, own a small dog, prefer the color blue, are active in social media and do most of their buying at night.

That kind of information is helpful because if you know your ideal customer is a 40- or 50-something dog owner who lives is a certain Zip Code, you can target your marketing more effectively.   

Most business owners and entrepreneurs think only about “top level” data such as revenue, profit margins and accounts receivable. Data mining goes deeper. It requires the kind of data-driven thinking that successful businesses use to coax out hidden relationships between different data points.

Consider Amazon.com for example.  When you view a potential purchase on Amazon, the site automatically mines its data to instantly display related products that people like you also bought.

Small businesses can do something similar. You can determine that people who bought one particular item also bought another. Or you might note that customers who purchase directly from your website spend less time with you, but buy more often.

As you dig into your data and begin to recognize patterns and links, you may also discover new cross-selling opportunities and ways you hadn’t thought of to improve customer satisfaction and retention.  

Even if your business isn’t yet collecting customer data, now’s a good time to start. Keep in mind that each “touch point” you have with customers and prospects – in person or online – represents a data-gathering opportunity. 

The information you compile doesn’t have to be highly sophisticated. Start with basics such as name, address (or at least a Zip Code), email, buying habits (when, how often and what they buy), how they found you and if possible, age and general income level. If you sell B2B, adapt these categories to companies instead of people.

These low-cost or free data analysis tools can help:

Google Analytics (google.com/analytics) is an excellent – and free – way to capture and analyze all kinds of information about what’s happening on your website, including who’s visiting, where they are coming from and what they’re doing on your site.

Canopy Labs (CanopyLabs.com) is a low-cost customer analytics solution that calculates customer lifetime value, loyalty and engagement levels, among other things.

InsightSquared (InsightSquared.com) is a sales intelligence platform that connects to software such as Salesforce, QuickBooks, Zendeck and Google Analytics to help you organization information and put it to work.

IBM Watson (IBM.com/analytics) has a free version that’s great for small business. Upload data, discover insights and build dashboards, all on your own. A paid version with more storage and features starts at $30/month per user.


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About the Author(s)

Daniel Kehrer

Daniel Kehrer, Founder & Managing Director of BizBest Media Corp., is a nationally-known, award-winning expert on small and local business, start-ups, content marketing, entrepreneurship and social media, with an MBA from UCLA/Anderson. 

Founder & Managing Director, BizBest
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