According to Nate Burke, CEO of Diginius, a propriety software and solutions provider for ecommerce businesses, data should not be all an SME relies upon when making important marketplace decisions.
As any small business owner knows, and continues to be told, digitalisation is a given. As the pandemic and various other shifts in the market have shown, online sales and lead generation channels cannot be ignored any longer.
However, small businesses are adapting. We are seeing more and more businesses set up shop online, and consequently, there is more data being collected on competitors, customers and markets than ever before.
Having all this information to hand may seem like any small business owner’s dream, as they can now make insightful and informed commercial decisions based on what others are doing, what customers want and where markets are heading.
Instead, there is a line to be drawn on where data is required and where your own expertise and judgement can provide greater value.
Navigating the online complex
Whether you are an established business in the physical world that is growing accustomed to the digital one, or a new enterprise based solely online, it is likely you are facing various challenges and complexities that seem to be hindering your progress.
Fortunately, the vast amount and wide availability of data is making the lives of small business owners easier. Equipped with the right knowledge and tools, better informed decisions can be made faster and administrative or monotonous tasks can be streamlined and automated.
So, undeniably, the power of data is unmatched. And with an abundance of data collection opportunities available online, and with an increasing number of businesses taking them, the potential and value of such information is richer than it has ever been.
For small businesses, there are many uses for all this data too. For instance, data on wider market trends and consumer behaviours can help you focus your efforts and limited resources on only the right channels and tactics.
Over the recent Christmas period, for example, data was clearly suggesting a preference for ecommerce, with marketplaces such as Amazon leading the way due to greater convenience and price advantages.
Businesses that recognised and understood the trend could better prepare for the digital shopping season, placing greater emphasis on their online marketing tactics to encourage purchases and allocating resources to ensure product availability and on-time delivery.
Similarly, search and sales data can be used to understand changing consumer needs, and consequently, what items businesses should be ordering, manufacturing, marketing and selling for the best returns.
For instance, understandably, in 2020, DIY was at its peak, with increases in searches for DIY facemasks, DIY decking and DIY garden ideas. For those who had recognised the trend early on, they had the chance to shift their offerings and marketing in accordance, in turn really reaping the rewards.
So, paying attention to data certainly does pay off. And thanks to smarter and more sophisticated ways of collecting data online, such as cookies, and through AI and machine learning technologies, the value and use of such information is only likely to increase.
But of course, to leverage the value of data to such an extent, it takes investment in the systems you have in place and in team members’ knowledge and expertise in order to collect, input and interpret information accurately and meaningfully. Without, the data and insights will be of little use, and even as damaging as not utilising such information in the first instance because they do not provide a complete view of what is supposedly being measured.
Drawing a line
But for businesses that simply do not have the resources available to freely put towards this level of investment, there is a silver lining.
Although there are clear benefits for data, particularly in lessening the administrative burden of certain tasks thanks to automation, as well as taking some of the risk out of the decision-making process, an approach that is entirely data-driven is not the best either.
This is due to how effortless data collection and analysis is becoming. As a result, we can only expect more businesses to be doing it, meaning its ability to offer each individual company something unique is also being reduced.
So, businesses need to look elsewhere for their edge. And interestingly, this is where a line should be drawn and human judgement should be used in order to set them apart from the competition and differentiate from what everyone else is doing.
It makes perfect sense when you think about it. Your business is unique for a number of reasons, but mainly because of the brand, its values, reputation and perceptions of the services you offer. For a small business, aspects of these are very often the reason you have opened your doors in the first place, and the reason many customers choose you, so they should not be lost among all the numbers and patterns on the screen.
Sometimes, these intangible aspects are much more difficult to measure and monitor through data collection and analysis, especially in the autonomous, number-driven format that many platforms utilise.
Here then, there is a great case for businesses to use their own judgements, expertise and experiences to determine what works well and what does not. For instance, you can begin to determine consumer perceptions towards a change in your product or services, which quantitative data may not be able to pick up until much later when sales figures begin to rise or fall. And while the data will eventually pick it up, it might not necessarily be able to help you decide on what an appropriate alternative solution may be, should the latter occur.
Human judgement, however, can listen to and understand qualitative feedback and consumer sentiments which can often provide much more meaningful insights for businesses to base their decisions on.
Again, this is one of the selling points of a smaller business ‘ the closeness and connection you can have with your customers is something not all bigger competitors can replicate. And in many cases, customers respond much more favourably to a personable offering, which is just as invaluable as any meaningful data and insights.
So, when it comes to competitor analysis, using insights generated from figure-based data sets and performance metrics is key to ensuring you are doing the same as the competition. But if you are looking to get ahead, you may want to consider taking a human approach too.