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In 2019, McDonald’s acquired Dynamic Yield — a big data startup — for $300 million. It was their biggest acquisition in 20 years and a key move to delight more customers and avoid disruption.
We’ve seen data analytics play a significant role in disruption for big brands for many years. Netflix overtook Disney with data, Amazon surpassed Walmart in retail thanks to data. Can those benefits apply to small and medium-sized enterprises as well?
We asked 40 businesses about their approach to data and the biggest benefits they’ve witnessed with small business analytics. Of the 40 people surveyed, 74.32% are SMEs and 25.64% are agencies/consultants working for SMEs.
Read on to find out more about:
Let’s dive in!
In our survey, almost half of the respondents (48.72%) analyze their business performance on a weekly basis. “I generate a report once a week on our website and email performance. We use these to analyze where we are and what our next steps should be,” says Veniz Guzman of SEO Hacker.
Here are the biggest wins and opportunities they uncover with frequent analysis:
Your best customers are the customers who pay the most, stay the longest, and require the least support. However, you can’t serve them if you don’t know exactly who they are.
How to identify your target audience? Should you start with demographics, or psychographics? Whether they are Series A companies, Series C, or sole business owners, and in what industry and verticals. Data analytics helps you identify exactly who they are.
Stephen Light of Nolah Mattress says, “A data-centric approach helped my SME make a hugely beneficial shift in the way we targeted our audience. It shifted us from mass-marketing to precision-marketing and allowed us to anticipate consumer behavior and trends…”
“When you let data lead you – and especially if you commit to updating and gathering new data – your marketing can be much more personalized, helping you send the most relevant content to the right customer segment rather than pump out mass content.” Light continues.
Related: 9 Customer Segmentation Tips to Personalize Ecommerce Marketing and Drive More Sales
Not all marketing channels yield the same results. As a small business with limited time, staffing and marketing budgets, it’s smart to prioritize high ROI channels.
All our respondents (100%) say they analyze marketing performance. 97.3% (almost all) analyze sales and website performance too.
They affirm that data analytics for your small business will uncover your best-performing marketing channels. You’ll be able to better focus your resources.
“…it makes it much easier for your business to understand what’s working and what’s not… you will see which marketing activity, which tool or team performs best so you can double down on what’s working and find room for improvements on what’s not working,” says Jonathan Aufray of Growth Hackers.
Aufray also emphasized how data helps monitor results over longer periods for the big picture; “you can also see growth over time and understand if your optimizations brought results month after month, quarter after quarter…” Aufray says.
Sometimes you’re using the right marketing channels and marketing to the right audience, but your conversion rates are lower than expected. Without data, it’s easy to make wrong assumptions about channels, customer segments or even something else.
Like with big brands, small business analysis shows you exactly where there’s a problem, and what the problem might be. An intrusive pop-up coming up at the wrong time for example.
Veniz Guzman who analysis website data for SEO Hacker shared that the team found numbers that weren’t matching efforts. “We’re currently creating a marketing plan and a content calendar which we didn’t have before. We’re updating our strategies as well since we saw that the numbers weren’t matching our efforts.” Guzman says.
Similarly, Alina Clark of Cocodoc discovered low-conversion rates despite a lot of marketing and says “… data changed virtually everything about our approach to marketing. We have become more user-conscious, and certainly more intentional with our marketing since we’re using data as guiding beacons.”
About the opportunities data analytics presented, Clark said, “I think that the biggest change we experience upon implementing a data-centric approach in the business came in the form of razor-sharp marketing. Data helped us sharpen the edge of our brand messaging, and how we targeted our prospective customers as a business.”.
Satisfied customers are more likely to stay with you longer than unsatisfied ones. This customer satisfaction often results from personalized marketing and proactive customer support.
Data reveals how to tailor your marketing to each customer’s unique needs. It allows you to offer support before they even need it.
“We have found that using a data-centric approach, we have increased customer retention and loyalty. By analyzing the data, we are better able to predict and engage with our users through personalized recommendations. This has been transformational for us.” says Ouriel Lemmel of WinIt.
Dan Ni of Messaged also agrees. Ni says that “Taking a data-centric approach was one the smartest things we could have done for our SME. one of the biggest advantages we had was that the data we leveraged gave us greater insights to make better decisions for bringing value to our customers. Plus it helped us look at things in a broader sense and opened up greater avenues for customer satisfaction.”
Related: 26 Effective Ways for Improving Your Customer Retention Rate
The revenue loss that comes from customer churn negatively affects not only profitability but valuation and funding opportunities as well. Gainsight projects a 200% higher valuation for SaaS companies with 5% annual revenue churn compared to similar companies with 15% annual revenue churn.
That’s why it’s important to analyze your small business data — to uncover trends that lead to churn, and prevent churn before it happens.
Jonathan Zacharias of GR0 says, “As an agency, we have started paying increasing attention to the reasoning behind churn rate. Although we had “intuition” as to why specific client churns occurred, such explanations were not organized and founded by data. We now have distinct “churn buckets” that categorize the churn reason by client vertical. Most importantly, this has allowed us proactively work to prevent such churns from occurring by implementing SOPs that slow and prevent churn altogether.”
Gevorg Hambardzumyan of Front Signs uses data analysis to improve customer experience, a key aspect of reducing churn rate. Hambardzumyan shared that “Our data analysis efforts helped us optimize our marketing and production processes and strategies. It helped us modify them (our strategies) to address the issues our customers were raising as well as improve all the aspects of our services. Overall, it helped provide our customers with a smoother, more personal, and well-rounded experience.”
It’s not easy to know which KPIs to track for sales, marketing, and customer success in a SaaS company. There are many possibilities, and so much to do! Why not start with the basic metrics that determine the health of your company?
If you want to track these in Stripe, you can do it easily by building a plug-and-play dashboard that takes your Stripe customer data and automatically visualizes the right metrics to allow you to monitor your SaaS revenue performance at a glance.
You can easily set it up in just a few clicks – no coding required.
To set up this Stripe dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Stripe account with Databox.
Step 3: Watch your dashboard populate in seconds.
Entrepreneurs sometimes have to decide on the spot. In times like that, it’s great to have good instincts; that deep feeling of knowing something without knowing how you know. But should you trust your gut for strategic business decisions?
Collins Dictionary defines gut feelings as “an instinctive feeling, as opposed to an opinion based on facts”.
Similarly, it’s easy to rely on hot-takes from industry leaders, but those takes are often based on the expert’s unique experience.
Most of the respondents we surveyed stated they are fully data-driven and that analytics completely influence their strategies and business.
Adam Garcia of Stock Dork says “Countless Excel sheets and formulas may appear off-putting and bureaucratic, but they are the only thing that can rein in your gut feeling.”
Garcia shares an important lesson learned. “In our early days, we observed various metrics of our website performance, but we wrongly felt we didn’t need to convert them to trends and timelines and charts that would let us compare them. But then we began to crunch data – structure, sort, filter, and analyze it. The sheer scope of ideas we got amazed us!” says Garcia.
And for SMEs worried about the initial time investment required to set up processes, Garcia continues, “Admittedly, these processes take time, but this time is not wasted. On the contrary – it lets you see and not guess the bigger picture.”
Similarly, Marina Vaamonde of HouseCashin shares that “The biggest change our firm experienced from adopting a data-centric approach is that we no longer become swayed by rumors or “hot-takes” in the media anymore when making business decisions. We don’t allow our decisions to be dominated by what we read in the news anymore; instead, it’s driven by the data that we collect, analyze, and discuss.”
Vaamonde who analyzes with Dave Meyer’s BiggerPockets method, shared a personal experience of how industry hot-takes can be misleading. “…everyone said that “there’s no housing inventory” and that “the market is crazy”. Many people recommended waiting for the market to calm down before doing anything. But after analyzing the data, we found that this is vastly overblown. There is still more than enough inventory in the market. And while prices are inflated, there are still many sellers willing to negotiate — as long as you offer them a good deal.”
“We only discovered this by taking a data-centric approach to our business,” Vaamonde says.
Related: 12 Tips for Developing a Successful Data Analytics Strategy
According to our experts, analyzing your small business data can help you uncover new business opportunities.
“The biggest change I have seen in my own experience is that data-centric approaches can lead to much higher rates of innovation. A data-oriented approach allows you to focus on how the user actually interacts with your product or service, which often leads to insights that are not easily obtained otherwise,” says Natasha Rei of Explainerd
As an example, Rei shared the story of the orange juice project at BestBuy. “Ongoing testing revealed layers of complexity in terms of what customers were doing when buying orange juice – even though they had expected it would be simple. It turned out that different customers bought different types of orange juice for different reasons and thus needed to navigate through several screens depending on their needs.” Rei explained.
Aaron Masterson of Local Furniture Outlet revealed that they’ve exploited data analytics aided by a business dashboard software to predict future trends, detect new opportunities and obtain market advantage.
Masterson shares that “the biggest change we experienced after implementing a Data-centric approach is how we easily identify new business opportunities and respond to market changes faster. An excellent characteristic of data is how it reveals insights that allow businesses to explore additional revenue streams by innovating and developing products and services that meet consumer demands. For example, we easily identify trends that reveal a popular style or brand of furniture through data. We respond accordingly by tailoring our products and services to these trends. By exploiting data analytics, we are able to predict future trends, identify consumer behaviors, and detect new business opportunities more quickly, creating the potential for obtaining a market advantage.”
Similarly, Brian Snedvig of Jofibo says, “As a company, we have realized an increasingly bigger and sustained competitive advantage since transitioning to a data-centric approach. Our data-driven operational model allows us to extract the most dynamic insights about our customers, our competition, and the overall market. We leverage these insights to provide immense value to our customers, keeping us ahead of the competition at all times.”
Most companies in our survey use centralized dashboards solutions to improve their decision-making. A centralized small business data analytics dashboard will help you track metrics from popular marketing and business tools. It will also merge the data, so it’s easy to see the full picture.
Here are three examples worth looking into:
The monthly marketing performance dashboard integrates with Google Analytics and HubSpot Marketing or other databases to show how leads find your site.
It shows which traffic sources generate the most leads, how many users visits you have, and how many interact with your site. You can also compare traffic from different marketing channels to understand which channels yield the biggest ROI.
The sales overview dashboard integrates with HubSpot CRM or your preferred database to show a visual snapshot of your sales team’s performance.
The dashboard allows you to understand what’s successful and what’s underperforming. You’ll be able to view your current sales pipeline, track individual sales reps’ performance, and compare results to revenue goals.
The Google Analytics website traffic & conversions dashboard shows an overview of your website’s performance and conversions.
You’ll see how much traffic your website gets within a specified period, and what segment of those are new vs returning visitors. You’ll also see your best-performing acquisition channels and the keywords driving the most organic traffic to your site.
In our survey, no respondents stated that they are not data-driven at all. Only with data are these small businesses able to focus on marketing channels and strategies perfect for their best customer segments.
If you’re ready to use data to boost customer satisfaction, reduce churn, and identify new business opportunities for bigger ROIs, get started with Databox Dashboards for free today.
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