Demystifying data science (part 2)

There is a common misconception that big data is just for the big guys: Google, Facebook, Amazon, etc. Many business owners assume that their company is too small to benefit from data analytics, or they don’t know where to start.

This is simply not true. In reality, small and medium-sized businesses can harness the power of big data just like big companies. Harnessing your data can help you identify important new questions, answer some old ones and learn more about your customers as you simultaneously increase efficiencies and maximize ROI for a variety of initiatives.

Here are some of the everyday business challenges that big data can help you solve:

1. Identifying key performance indicators (KPIs)

You can use data to identify and set realistic business goals and develop a plan to achieve them. If your KPIs are missing direction, magnitude or time frame, you’re just pretending. One of my favorite quotes sums this up nicely: “If you cannot measure it, if you cannot express it in numbers, then your knowledge is of a meager and unsatisfactory kind.”

2. Customer segmentation analysis

Without a deep understanding of your customers – both current and potential – you’re basically taking shots in the dark. Your business will lack the strategic focus and actionable tactics needed to best serve your customers. Additionally, your marketing efforts will likely be inefficient and off target. Data scientists can look at your customer and market data and segment it by demographics, geography, behavior and psychographics. This gives you a clearer vision of your best customers, allowing you to tailor customer experiences to better meet their needs. You can also tailor your marketing strategy to identify and target the prospects that look most like your best existing customers.

3. Scoring sales pipeline opportunities

Data scientists can score opportunities throughout your sales pipeline. That allows you to manage them to minimize time to close and maximize revenue. Sales managers and the entire sales organization can better identify specific tactics to maximize the expected value of the sales pipeline. Moreover, this effort can create a natural feedback loop into marketing campaigns, which can create a desirable flywheel effect.

4. Customer profitability analysis

Is it more profitable to retain an existing customer than to acquire a new one? That depends. What if you’re losing money on an existing customer or, worse yet, an entire segment of customers? Do you know why some customers are profitable and others aren’t? Which segments of your customers do you need to focus on? Data science can help you answer these critical questions using the data you already have to boost profitability and accelerate growth.

5. Visualization and dashboard reporting implementation

Making important business decisions is significantly easier with accurate, easy-to-digest data at your fingertips. A comprehensive dashboard displaying the data you need to know – from lead reporting to inventory management to distribution tracking – will help you make more informed and profitable decisions. But that’s only possible if you’ve identified the right KPIs and defined them appropriately and you have the proper experimental design to rigorously measure results.

6. Automate repetitive tasks

Assigning repetitive, manual tasks to people runs two main risks: It slows everything and everyone down, and it leaves room for human error. Data scientists can develop efficient automation for routine, data-oriented tasks that saves time, reduces organizational costs and improves enterprise-wide productivity.

7. Predictive models

By studying your customers’ buying habits, you can predict their future purchases. You can know when to stock up on certain items, hire additional staff or change your priorities. Data helps you stay prepared and on your toes so you don’t fall behind the competition.

It’s common knowledge that data drives businesses. It can move yours forward, too, even if you’re not running a huge company. You have all the parts you need; you just need the right tools and technicians to set it in motion.