Your customers and employees will always be the lifeblood of your business. But the Age of Data has arrived—data analysis is shaping the way businesses compete and deliver value, whether applied to cash flow management, customer marketing or anything in between.
So, the way you manage your data is now a key determinant of success. Most large businesses understand the importance of effective data management and pursue it aggressively, but it can also offer powerful advantages to small and midsized enterprises (SMEs).
1. Organizing and Securing the Electronic Data You Already Have
Let’s start with the absolute basics: effectively utilizing data to advance your business starts with organizing the information you already have, or making sure that systems you established years ago still work and are being used.
If you haven’t done so already, it’s a good idea for SMEs to set standards for where electronic files should be kept and how they should be named, establishing standardized folder and file names descriptive enough for employees to understand them. Consider providing a cheat sheet so employees can understand and use the system you’ve created. In your office productivity software, use templates to standardize new documents, so you can create them more quickly and efficiently.
If you haven’t already, establish central repositories for key business documents such as proposals and sales letters, which are often scattered across multiple devices and can’t easily be found by colleagues who need them. Whether you store your data on your premises or in a cloud service, once it’s centralized it’s easier to search, either by browsing well-organized subfolders or by using search tools to find text such as a customer’s name.
Of course, all this raises the issue of security. Carefully safeguard information you want to keep private by storing it in folders with restricted access, or by encrypting and password-protecting individual files. Plan carefully how employees will (and won’t) access information remotely—for example, through a Virtual Private Network (VPN) you provide. If your employees travel often, consider using full-disk encryption to protect laptops that could be stolen or compromised. (If you’re not familiar with the essentials of cybersecurity, the Federal Trade Commission offers some good plain-English primers.)
As you refresh the way you store information, also make sure you have reliable and up-to-date backups that are kept separate from your originals, such as cloud-based subscription services. Be sure to compare carefully to choose the right mix of services and cost for your business.
2. Acquiring More Customer Data, and Using It to Earn More Value
The more up-to-date, consistent and accurate customer information you have, the more value you can get from it. For example, are you requesting names, addresses and email addresses from new or repeat customers? Are you consistently tracking their purchases, so you can recognize patterns and reengage customers who haven’t been active recently? If you use a small-business accounting system, their reporting tools may help you identify customers who need attention.
Of course, these systems also provide crucial information about key financial metrics such as cash flow. Working from their cash-flow reports, you can explore tools such as business credit cards that allow you to spread or delay payments over time, or short-term working capital loans to fund sudden growth opportunities or pay vendors that don’t take cards.
Since financial accounting systems weren’t designed specifically for sales and marketing, many companies integrate them with customer relationship management (CRM) systems. That gives salespeople, marketers and customer service teams access to complete customer information without revealing financial data you may not want them to see.
Whether you integrate accounting and CRM or use fully separate solutions, CRM can centrally store customer contact information, track leads, understand the buying journey, cross-sell/upsell and centrally manage all your electronic communications with each customer.
The more up-to-date, consistent, and accurate customer information you have, the more value you can get from it.
3. Get More First-Person Data, and Analyze Your Site’s Performance
Of course, the more customer data you have, the more valuable it can be. “First-person data” provided voluntarily by individuals is becoming more valuable, as consumers grow more concerned about privacy and tracking. For example, if you’re in retail, you might use birthdays and demographic data to personalize offers and make them more timely—and many customers will share that information if they’ll be getting something meaningful in return. Consider building your own branded loyalty program: a variety of software tools and cloud-based platforms make this easier than it used to be.
4. Lay a Strong Foundation: Collect Data Accurately and Consistency
Today, the buzzword “data analytics” is ubiquitous, and more small businesses are looking for ways to use it. CRM dashboards and Google Analytics offer a relatively simple way to start, without advanced data science expertise, though as you become more experienced you may want to go further.
Two cautions are in order, however. First, some data analytics may require larger datasets than you have, or integration with external data sources you’ll have to pay for. Second, for data analytics to be trustworthy, your data must be accurate, up-to-date and consistent. That’s why large enterprises invest heavily in “data cleansing.” Pay close attention to accuracy, consistency and updates from the outset. These data management issues are critical: after all, you too may be a large enterprise one day.
By focusing on more effective data management, SMEs can achieve unprecedented levels of efficiency, competitiveness, and customer focus.
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