“Big data” has become a fairly prominent term in the business community in the last few years, and generally refers to the massive amounts of information being collected on consumers by major tech companies and other firms, which can then be turned into usable reports for specific businesses or other initiatives. And while many small business owners may think this might not be able to benefit their companies, but in reality, there are a number of ways big data can be of use to them.
Today, more than nine out of 10 retailers say that analytics culled from big data initiatives is at least somewhat vital to retaining customers and already about three in five businesses keep their own information on customers or clients, according to a report from American Banker. That, in and of itself, highlights just how important certain kinds of data can be and for this reason, it might be vital for small business owners to look into the ways big data can be of use to them going forward.
One of the best access points many of these companies may have when it comes to tapping massive amounts of information on potential customers is through major financial institutions, the report said. These companies are, in growing numbers, offering small businesses more access to insights into the marketplace that could be used to increase the reach of their companies. For instance, analytics about how much credit card users spend versus those with debit accounts or cash could give companies insight into the best options for streamlining the payment systems they use every day, which in turn might help them to save money over the course of a month or a year.
The reason this might be so easy is that many banks in particular already keep track of payment information for their clients, and taking the time to aggregate that into actionable data for small businesses – while it will likely come with a price tag – will potentially help to clarify some issues for the companies involved, the report said. That, in turn, can quickly translate into real-world dollars that might otherwise be going untapped by small businesses.
“The addenda records on payments are vital and helpful for the accounts payable departments of clients,” Rick Hall, senior vice president and director of product strategy at Associated Bank, told the site. “As you get more electronic, you have the ability to deliver more information and that info is helpful and beneficial: it creates a lower-cost infrastructure from a financial institution perspective and it creates more information and value to the client.”
Other companies can help as well
While financial institutions can certainly provide instructive information to small businesses, it’s important or owners to keep in mind that other companies collect different types of data that can be just as valuable, the report said. Information on customer demographics in their area, or other information that can help them to better understand the ways in which they might be able to better tailor their products or services to what people in their areas generally want or need could obviously be vital going forward.
Of course, when it comes to large amounts of data, companies may also need to do more to safeguard the information they hang onto and try to aggregate as well. Investing in small business insurance options including tech insurance will likely serve to better protect them from the fallout of data breaches when and if they occur.