Use data to supplement the loyalty of your customers

At Galway Business School, you can take up a Certificate in Data Analysis as part of our Bachelor of Business Level 7 programme, but how can smaller companies tackle the might of Big Data?

People tend to think of data as Big. There’s a common mental image that Big Data equals huge amounts of information stored in vast server farms, with clever people analysing screeds of numbers and delivering big thoughts on macro economic trends

That’s the sort of vision which makes small and medium size enterprises (SMEs) rule themselves out of the data game. That it’s just for the big boys in their market who have the resources to play that game. It’s true that the behemoth supermarkets and online giants know everything about you - what you buy and how often, to the point where they contemplate shipping an item to you before you’ve ordered it, because you always buy it. There’s a reason why Jeff Bezos is the richest man on the planet and it’s to do with size.

But SMEs have a different relationship with their customers, even when it’s still based on digital habits. They find it easier to build stronger and more personal relationships with customers in their niche or in their geography because they’re dealing with a community of finite size and, in many cases, those customers will have a natural affinity with their companies who are in their patch. If the loyalty is based on the fact that they are in the same town or if its based on their space in a particular niche market, it will still count.

Even then, though, better data is the key to maximising that ‘emotional’ advantage. If a company knows more about the potential customers in its market, they’ll be able to reach more of them, while still capitalising on the personal touch that comes naturally to a small, local or niche business. Beneath all the talk about algorithms and analytics, this is really about the oldest business rule of all: companies that know their customers well will do better than those that don’t.

So companies shouldn’t let the idea of data depersonalise their relationship with customers. That is key to loyalty. But they shouldn’t start to assume that that rules out data completely - and they certainly shouldn’t let themselves be daunted by the idea of using large amounts of data to support their business. 

For one thing, SMEs don’t need to set up their own data operations – given the huge number of open datasets now available, this is information that is not too difficult to find. You can try the Azure option (from Microsoft), there are local versions (such as this in London), or this from the Irish government.

Data on this scale presented as resources like this offer SMEs access to the most accurate source of intelligence on who their local customers are, but also includes analysis of demographic, lifestyle and attitudinal factors. They can also get up-to-date analysis of exactly who is moving into their market and who is moving out – whether businesses or individuals – and build bespoke data sets depending on what markets you’re targeting.

Think of these activities as a natural extension of what a business already does. They’re almost certainly used to thinking carefully about a target market, but now they simply need to find the best ways to identify where more of that market is to be found. Having done that, they can work out how to contact them – by post, through a leaflet campaign, via email or on social media.

There is skill needed to understand the numbers and more skill in strategising the next steps forward - these can be brought in on a project basis. Analytics isn’t the preserve of the big companies either.

The final piece of the jigsaw is, of course, the message – what a company will say to these potential new customers. Again, data can give an edge. A company can personalise the message if you know they’re dealing with and also think about what message is likely to be most effective for each target, as well as when and how to deliver it.

For example, for a local clothes retailer specialising in school uniform, knowing where every parent with school age children in the area lives will pay dividends. If they focus on getting in touch with special offers over the summer months, when most parents buy school uniform, they’ll do even better.

Similarly, if a business is providing specialist accountancy services to other small businesses, knowing where those firms are to be found – and their deadlines for jobs such as filing tax returns – gives an edge over competitor firms without that data.

Using such techniques can grow a business much faster. And this is likely to be just the beginning. Increasingly, apps are available to help SMEs integrate different types of data into their business development work and the software-as-a-service model. So, for example a local taxi firm can use technology integrating data sources such as live transport updates to despatch cars to railway stations just when passengers are about to arrive in their droves, usurping the need for an Uber.

In the end, it’s all very old school - knowing the market, knowing the customers and anticipating demand. Using data alone to do that gives scale but lacks nuance. Using local knowledge gives some insider knowledge, but that knowledge remains limited by personal experience.

The canny use of data and personal relationships with customers can give some SMEs the best of both worlds - small and scale to drive their growth.

At Galway Business School you can learn to deliver innovation through a Certificate in Data Analysis programme as part of the our part-time suite of courses. Or browse all of the business courses we have available.