There’s a famous quote by Bill Gates, Founder of Microsoft. He says: “If your business is not on the Internet, soon your business will be out of business.” With these words, Bill Gates sums up the importance of every business, regardless of its size and nature, having an online footprint and presence.
Digital Marketing Isn’t Enough
However, in today’s world and especially with the boom in e-commerce during the COVID-19 pandemic, merely having a good website, Facebook page, YouTube channel, or other social media presence isn’t enough. You need to know where your potential market lies, who and how to target as clients and likes and dislikes of the areas where you’re focusing all energies of your online strategies.
Therefore, data analytics is a vital component for every online marketing strategy, including for small businesses.
In this article, let’s explore how data analytics can help small businesses grow. And how to sustain that growth for tangible results.
How Data Analytics Helps Small Businesses
As a small business in India, you’ll surely be aware of the challenges it faces. These include erratic logistics, seasonal demands, and the different ethnic groups in this land and above all, economic swings that affect buying patterns, among others.
Therefore, here’s how data analytics can help.
1. Understanding Demographics
The key to the success of any online business is to understand the demographics of your present or intended market. While a small business could be targeting a specific region, there could be no demand from clients. Therefore, you won’t be able to make much headway in that market.
There are wonderful small business ideas that you can get online. And when you open a small business using any of these superb ideas, data analysis can win you a niche in the market within a short time.
At the same time, your products or services could be useful and generate great demand in another, hitherto unknown market. Most Indian small businesses remain blissfully unaware of where their real market lies. Therefore, most end up targeting what may seem like an obvious and profitable market but fetch disastrous results.
Here’s where data analytics helps. By analyzing the number of people that visit your website and social media pages from any particular region, you can understand the demographics of your market. With proper planning and a clear strategy, you can focus your efforts on that segment of the population and propel your small business to profits.
2. Cost per Client
Is your small business barking up the wrong tree? Meaning, are you targeting the wrong clientele despite spending a considerable amount of money on digital marketing resources and advertising? If yes, then it’s high time to engage in data analytics and find out exactly how much money you’re wasting on getting potential leads and generating them as customers.
Since digital marketing and online ads are much more economical than conventional print and electronic media advertising, most small businesses happily bear the expense. However, it’s worth remembering that profits from your customers have to also cover the money you’re spending on attracting them to your small business.
By data analysis, you can find how much money you’re spending on getting a customer and the profits. And when you find that the cost is greater than profits, it’s easier to adapt, fine-tune, or scrap your digital marketing strategy. Instead, you can expend the same resources on developing newer, more profitable markets.
3. Catering to Seasonal Demands
As a land of festivals, the Indian market witnesses seasonal demands. Naturally, competition in every form gets hotter and hotter during festivals and shopping seasons. At the same time, the tastes of Indian buyers are prone to wild swings. What was in demand last year needn’t be in vogue this year or in years to come.
How does one find out what Indian shoppers are attracted to during the forthcoming festival or shopping season? Once again, the clues lie in data analysis. By analyzing what shoppers are looking for, based on their search keywords as well as hits to other websites, Google Trends, and data from various sources, your small business can specifically identify their needs.
A small business cannot have a large inventory of goods. Hence, data analytics helps you identify exactly what products or services are in demand today and which are the bestsellers. That helps cut inventory costs while optimizing profitability if done rightly.
4. Keeping Tabs on Competitors
Just in case you’re unaware, data analytics can give you a lead and head-start over competitors. There are numerous ways a good data analytics expert can find out what type of clientele are your closest rivals attracting and what they’re buying, average spend per purchase, and profits.
This is precious information for every small business if you can use it to your advantage. You can know where to strike a competitor and gain that leading edge to emerge at the top in that particular field of business. It helps you focus every digital marketing effort, lower costs, offer the right products and services, and gain a larger clientele.
This isn’t as easy as it might sound. Data analysis isn’t that proverbial cakewalk. It needs experienced and qualified persons to provide you astute information about rivals and their markets.
5. Improving Offerings of Small Business
American magnate Peter F. Drucker aptly says: “Every business has only two functions: marketing and innovation.” And innovation is made possible by data analysis. You might falsely believe that your small business has that killer service or product that meets the needs of your target market. But that needn’t be the case. There’s every possibility that offerings of your small business could be outdated or even irrelevant in the market.
The only way to turntables is by innovating your brand offerings to suit existing market conditions. Data analysis makes it possible to know what people look for in a product or service. It helps identify deficiencies in your offerings and innovate them to make them saleable in the market.
Data analysis helps you improve customer service, cut costs on digital marketing and advertising efforts, and gain more customers if done professionally. Unfortunately in India, few small businesses engage in data analysis due to costs. If you invest in data analysis, your small business could gain a lot.
If you found this helpful and wish to learn more such concepts, join Great Learning Academy’s free online course.
Contributed by: Mitali Roy1