Every business magazine, conference or news outlet that you follow, talks about it. There are companies claiming to be able to predict crimes while Netflix blockbuster series House of Cards is the result of it. At some point you heard about Big Data and thought it was going to be another buzzword, but this one seems to have stuck around longer than usual… and you know you are missing out when your super smart Ivy League neighbor’s son is graduating in Big Data Management this Fall. Well, congratulate yourself because you will learn enough about Big Data in this article, to understand what it is, why is it such a powerful business tool and what can you do to get your business leveraging its value immediately.
Big Data, Big Job? No. Just make sure to brush off on Excel
So, what is Big Data? In a very simplistic definition, Big Data refers to the collection, cataloging, storage and analysis of large amounts of records related to all aspects of your business. Think for example you sell earrings online. Every time a person goes to your site, the Google Analytics code that you have installed (who, me? Yes you!) registers every click, every hover, every page, every link and everything the visitor does while their ‘session’ is active.
Assuming the visit took 2 minutes, and they looked at 5 items, you could easily be looking at 25-50 pieces of information regarding that one visitor in that visit alone; multiply that by the number of visitors to your website, and you are looking at serious amounts of information. Then, you can also collect whether that same user called by phone, visited your physical store, what credit card they used, the address to where they shipped, etc, etc, etc.
Naturally, all this data needs to be handled in the form of databases, which is nothing more than tables of information, identified by one ‘key’ or unique identifier, that permits us to separate, aggregate, graph or manipulate the information to learn about trends, exceptions and sequences that might be hidden at plain sight. Excel is an excellent tool to analyze large quantities of data, and a very simple database tool to master.
Today we have access to thousands of information bits about our business, but who has time to make sense of all of them combined?
And now you are thinking: is it really that valuable? You say to yourself, nothing that a good businessperson cannot spot in traditional sales reports, without all that database nonsense! Well, not necessarily… in your traditional data, you see things like your sales have steadily grown for diamond stud imitation earrings, but it is your Big Data analytics that will tell you who is buying them, coming from what advertising channel, at what time of the day the transactions occurs, whether they are gifts and many other indicators that on aggregate can mean it’s time to change your price, expand the line or more, without ever leaving your computer. Aggregating all your data by customer traits, product style, geography or support calls topics, can help you discover hidden gems of opportunity to expand into a niche that might be underserved, for example. In summary, paying attention to your data trends could save you big bucks and protect you from new competitors that want to enter your market but have no data to mine.
Start with a clear question, and let your Big Data tell you the answer
By now, you are probably pretty clear what Big Data is, and what it can do for your business; the question still is how do you leverage your Big Data? Where do you even start? The answer is simpler than you think: Make sure you first know exactly what do you want to accomplish and what is a good way to know if you achieve it. In other words, establish goals for your key performance indicators (fancily known as KPIs) and track them; then, breakdown the different components of your data that feed the results of this goal and notice the main similarities and differences. Managing large amounts of records, just to collect standard information is useless. Establish goals for events that should trigger a result and observe if you get the desired outcome. If you do, great, but if you don’t maybe it is time to change strategies. In some ways, Big Data transforms you into this scientific researcher or Data Scientist (just like your neighbor!) always testing theories to improve the results: Your business results.
Where should you be collecting your business Big Data and how do you process it?
Of course this might be sounding a little too overwhelming if you are not a ‘numbers’ person, but the good news is that there are tools galore to choose from. Some of them are free, some of them study just specific types of data and ultimately, it is about what is that you are after, that determines the kind of information and the type of analysis you will want performed. Some tools you can start with are Google Universal Analytics, Tableau, Hadoop, DataWrangler or good ol’ Excel. Honestly, once you start spotting trends and insights otherwise unknown to you, the concepts of keys, outliers, anomalies and other Big Data jargon will become evident even if you don’t know that is how they are called. And if that is not your job as small business owner, I don’t know what is.
And now you know why your business should be more like House of Cards (minus the cheating, the backstabbing, etc.) Please comment below if you need any extra detail to start your own Big Data adventure and I’ll be happy to give you a nudge in the right direction.