If data science is a game, cutting-edge tools and technologies are the players. Yet if you think this game is reserved only for big companies, you need to buy the ticket. Data science is a game that gives equal opportunities to all. When it comes to data science, the size of your business is imperative. This blog covers all the aspects necessary to resolve your queries. We will see how using data science for small business impacts their overall growth and profitability.
- Data Science For Small Business Constitutes a Data-Centric Approach
- Data Science for Small Companies Makes Data Work
- Five Benefits of Using Data Science for Small Businesses
Data science is the latest trend, and companies of all sizes and domains have understood its benefits. As every business collects data, including small businesses, there is a growing need for data science for small businesses. Organizations have a chance to survive and achieve growth if they can turn data into information that fuels strategies, span sales cycles, optimize operations, and benefit every task in-between.
As per the latest statistics, every individual generated almost 1.7 MB of data per second, and all the humans together created about 2.5 quintillion data bytes daily in 2020. Undoubtedly, data has become ubiquitous. Yet the question remains…, how does the use of data science for small businesses help process data and achieve growth?
Data Science For Small Business Constitutes a Data-Centric Approach
According to a research report, we generated about 44 zettabytes of data in 2020. If we continue at this pace and consider the ever-rising internet penetration rate, the daily amount of data generation reaching 175 zettabytes by 2025 seems to be a valid expectation. Don’t you think these figures are overwhelming? Especially when we are doing nothing to make use of this data.
A small business may be small in size, small in financial status, or small in its reach, but it does create data. Data science for small businesses is just a sidekick that retrieves actionable insights from this data and helps make better decisions and achieve growth.
Although small, small businesses also face similar challenges bigger organizations face, like irregular logistics, seasonal demands, and ever-changing economic affairs affecting buying patterns. While it is legitimate for small businesses to feel overwhelmed by these challenges, sometimes they do not have an option to experience mounting loss.
Data science for small businesses helps them in adopting a data-centric culture. A culture where decisions are made based on numbers, facts, and insights generated through the data. A data culture gives small businesses a bigger opportunity to serve their consumers quickly and efficiently and enhance customer loyalty. A culture that values coordination, collaboration, and cooperation. In a culture where decisions are more successful, initiatives are more effective, and competitive advantages are more striking.
Let’s explore how data science brings big opportunities for small businesses.
Small Data Big Opportunities
Managing data is an easy job for small businesses as the self-generated data is comparatively less than the big players. In other words, unlike Google, a small business does not need to process 3.5 billion search queries daily. It means they can be more agile in processing the small amount of data generated by their business.
For example, a local grocery shop owner understood the business gimmicks during the Pandemic, and now he is struggling to increase his business’s revenue. Apart from a brick-and-mortar store, he now has a mobile app to receive orders and make doorstep deliveries. He is now interested in taking the next steps. He no longer relies on his gut feeling; he wants solid facts and crunching numbers. If he knows what, when, and how his customers want to buy, products having seasonal demand, and what would make them recommend his store to others, he can make better decisions to meet their demands and increase customer loyalty. Data science for small businesses is a field that allows him to take his business to the next level.
Successful use cases in data science and business analytics in small businesses often follow these steps:
- Determine and describe your business needs.
- Evaluate your present data
- Locate data sources
- Leverage beneficial analytical methods and models
- Experiment with various ideas and models
- Execute the data science solution.
Data Science for Small Companies Makes Data Work
Knowledge is power for the business, and data is the fire that creates this power. Being able to harness the power of data using data science for business is extremely important. Data science extracts knowledge from data with mathematical and statistical methods, automated processes, ML algorithms, and systems. Leveraging these insights to make strategic decisions is a key practice.
More than 61% percent of companies agree that big data has helped them drive revenue by providing useful insights to know their customers. When small businesses can have actionable insights into the behavior patterns of their customers, it inevitably results in better sales and productivity. But, there is more to data than just increased sales and productivity. Let us explore how data science makes data work for you.
Business leaders or small companies can take an analytical approach if they selectively utilize specific use cases in data science for small businesses. Facts, numbers, and statistics presented by data science supply reasonable solutions that might have been apparent first.
Philosophers consider competition as the biggest vice of humanity. Businesses have the art of turning this perceived vice into virtue and making the most out of it. The use of data science in small businesses reflects how trustworthy data science programming tools have replaced the traditional method of industry gossip to understand and analyze the competitors’ business.
Using data science for small companies makes it possible to get competitors’ financial data, market popularity, and customers’ perceptions at your fingertips. It is easier for you to compare how your product or service is doing with your competitor’s product or service.
Data science for small businesses helps them understand their target customers better. Earlier, it was enough to know your customers’ names, contact numbers, and addresses. But, times have indeed changed, and customers want a more personalized buying experience. Data science is the surest way to address this market expectation.
Hire data scientists to get in-depth details and identify the best tools for understanding audiences for small businesses. A better understanding of audiences results in better business and sales strategies.
Data science makes data optimize your business processes. Data scientists use advanced data science tools to mine and analyze self-generated data to improve processes of small businesses such as production, customer service, and inventory management.
For example, retail companies can exploit data derived from social media, web search trends, and cart abandonment to keep their inventory up to date. The analysis of this data streamlines their buying processes and makes them stock the products that the customers want.
Predictive Analytics to Identify Problems
Small businesses until recently relied on ‘gut instinct’ while making important business and strategic decisions. Predictive analytics has replaced this outdated ‘ gut instinct ‘ culture with data science making data work for small businesses like magic.
For example, an eCommerce company can successfully predict what customers are buying next by analyzing their previous buying history, products in the cart, products removed from the cart, products they search and more. They also get to know about specific products increasing demand in a particular season.
Personalized Marketing Campaigns
Data science for small business empowers them to profile and segment their customers. It allows them to create personalized marketing campaigns. An approach to address buyers’ pain points with effective content and a feasible solution.
For example, a specific customer searched for an air conditioner; he did the same last year. Depending on his searches and products he added to the cart, an air conditioner brand created a personalized campaign for the specific customer giving him a discount on the air conditioner considering what specifications he was looking for.
Enhance Customer Service
Data science for small businesses gives them powerful insights into their customers’ thinking patterns and decision-making factors. These insights help them design an effective service that makes their customers feel more valued. The data analytics tools track why customers fall out of the loop and where their businesses can improve interaction with the customers.
Refined customer service based on these actionable insights helps small businesses to connect and interact with their customers at the right time and for the right reasons. Such informed customer service retains the existing customers, creates a new loyal base of customers, and ultimately improves customer service and better customer experiences.
When used smartly, data science for small business helps optimize their existing logistics. The customized data science models help track and optimize data to identify changes in the operation cycle. Besides, it also helps track KPIs like cost, value, service, and waste. It helps in taking corrective actions before disaster strikes.
Data science elevates the speed and accuracy of forecasting levels by collecting and forecasting data from different sources in real-time. Data science is also helpful in route optimization and optimizing the vehicle routing problem. Besides, when combined with analytics, information from sensors, and real-time monitoring, data science for logistic optimization makes it easier to get real-time end-to-end visibility into entire supply chain operations.
The use of data science for small businesses is a great way to enhance their online business security levels. With increasing possibilities of fraud and data theft, protecting and safeguarding your organization’s data has become imperative. Data science analyzes the data to detect financial frauds and other risks to prevent potential cyber-attacks.
Driven by a predictive approach, expert data scientists can recommend how to detect threats to sensitive data. Small businesses can design a robust, infiltration-resistant system that ensures greater cybersecurity by hiring a skilled data scientist.
Five Benefits of Using Data Science for Small Businesses
Judicious use of data science for small businesses helps small businesses deploy cost-effective data analytics tools essential for effective data mining and analysis. Data science empowers small businesses to take strategic decisions by presenting actionable insights into customer thinking patterns. It allows them to take the business in the right direction, saving a lot of inessential expenses on marketing, advertising, and other irrelevant expenses. Customized products and personalized customer service at lower investments result in greater ROI and customer gratification. It also increases customer retention rate and overall business efficiency.
Improved Customer Service
If used effectively, data science for small companies helps them focus more on giving better customer service and generating deeper customer engagement. Data science contributes to other technologies like Machine Learning to discover trends, identify problems, and generate customer issues that have not been addressed yet.
The data-driven insights help create user-centric products, providing a better user experience, elevating the customer experience, and improving the overall customer service.
Problem Identification and Accurate Resolutions
Businesses often tend to make decisions based on limited or incomplete industry information. It often proves to be bad decisions impacting business efficiency. Data science saves small businesses from making bad decisions by pointing out the exact problems in the operations and their accurate resolutions.
Data science for small business assists in identifying problems, detecting bugs, and understanding customer issues by analyzing data to detect how customers and markets behave. Having insights without biases empowers small companies and startups to detect possible errors or problems and optimize the processes using precise resolutions.
Better Operational Efficiency
The operational efficiency of a small company is determined by a few general sets of objectives for which multiple considerations are taken into account. For some businesses, operational efficiency equals operational efficiency versus profit. It means the lower costs compared to profits equals greater operational efficiency.
Data Science for small companies plays a pivotal role in optimizing processes, lowering operational expenditure, and thus enhancing operational efficiency. It does so by extracting insights into behavior patterns of consumer groups, bringing precision in customer segmentation, better analysis of macroeconomic trends, enhancing delivery models, and customizing services.
The majority of small businesses still think that data science is a game played only for big players, but they have not realized that everyone can play this game with their own rules.
According to a BARC research report, businesses experienced an average 8% increase in their revenues and a 10% reduction in costs with the optimum use of data science for small business.
It is quite clear that data science for small businesses is no less than a savior. While working with various small businesses, Bacancy has realized that the transition to a data-centric approach often becomes a great cultural, emotional, and business challenge for small businesses. They are so habituated with their age-old gut-centric method of making decisions that they keep spending huge money on nonessential marketing without having any tangible results.
It is often difficult to convince such businesses that data science programming is the way forward to achieve the desired results. The discussion clearly shows how data science helps reduce costs and increase operational efficiency to do a lot more unimaginable things.
Hence, if small businesses hire data scientist from dependable firms like Bacancy, it helps them avoid a lot of unnecessary investment in their business. Also, hiring a data scientist with the right kind of experience and expertise right at the beginning of your operations saves you from going through the emotional, cultural, and operational challenges of transition.
Can I use data science for small businesses?
Yes! Small businesses can use data science in many ways. Even a small business generates data, and data science helps in extracting insights from it so you can make strategic and data-driven decisions right from the start. The data insights help you refine sales, marketing, inventory, supply chain, and other business processes.
Do small companies benefit from data science?
Data science benefits all businesses using it, irrespective of the size or amount of data they generate. Data science helps small businesses optimize processes and automate operations so they can manage their business efficiently and effectively. Data Science helps make strategies for efficient product promotion, engaging with customers, and managing customer relationships, finances, employees, and departments. The actionable insights presented by customized data science applications and predictive analytics assist in generating revenue, achieving growth, and providing the best customer experience to increase brand advocates.
How data science helps small businesses?
Data science helps small businesses reduce operational costs, enhance business models, increase revenue, and get a competitive edge. Data science helps small businesses to
- Establish a data-centric approach.
- Derive insights into finance and bring efficiency to financial operations.
- Enhance Inventory management.
- Understand the market, customer expectations, and competitors in a better way.
- Streamline marketing and promotional activities.
- Refine customer service, improve customer experience, and elevate customer satisfaction.
What are some use cases of data science for small businesses?
Data science offers similar opportunities and benefits it provides to big enterprises. Small businesses have half the amount of self-generated data compared to big businesses; it does not mean that they cannot rip the benefits of data science. Small businesses are more agile and like to get and react more quickly to data insights generated by data science.
Here are some data science use cases for small businesses.,
- Understanding what makes your customers tick
- Identifying trends
- Anomaly detection
- Fraud detection
- Predictive modeling
- Recommending engines and personalization
- Checking out the competition
- Sentiment behavior analysis
- Data security and compliance
Chandresh Patel is a CEO, Agile coach, and founder of Bacancy Technology. His entrepreneurial spirit, skillful expertise, and extensive knowledge in Agile software development services have helped the organization achieve new heights of success. Also, Chandresh is fronting the organization into global markets in a systematic, innovative, and collaborative way to fulfill custom software development needs and provide optimum quality services.