In this guest column IBM's Rod Smith tells how Big Data helps a business interact with its customers and takes much of the guesswork out of getting on the right track:
A local florist thinks about expanding into multiple locations. A small deli owner hopes to open a restaurant someday. Every small business conceives an idea with the dream of making it big. With the right resources, technology and information, some small businesses can make that a reality.
The questions facing owners of growing business are always same. How do I get started? What can I afford? How do I get one step closer to my customers and know exactly what they want and when they want it?
The digitization and networking of nearly everything is presenting new opportunities for small businesses.
Smart phones, GPS devices, embedded sensors - all connected by the mobile world - are generating massive amounts of data and revealing new types of information. Each time an individual tweets, posts a comment on Facebook, blogs, or checks in on FourSquare, a record is created leaving a digital footprint that provides meaningful information about the individual's buying habits, likes, dislikes, social interactions, and more.
This mountain of data - also known as Big Data - is a treasure trove for businesses of all sizes that want to target their customers more effectively. These businesses now are able to do more than guess where their customer will spend his or her next dollar. They can actually predict their buying habits based on data and then target them with the right products and services. So how do small businesses take advantage of all that Big Data has to offer?
When it comes to smaller businesses, there are a number of existing tools that they can use to find out how their products are being referenced, what their customers are talking about and looking for, and even where they might look to find the right partners who can team with them to expand.
From a geographic standpoint, smaller businesses can use location based online tools to find out if customers in certain areas have specific interests. So if a small convenience store with two locations finds that customers in one are far more likely to pick up a copy of the New York Times on the way to work versus customers in the other store who only reach for the local newspaper with their morning coffee, that storeowner can adjust his inventory based on those preferences - making his customers happy and his bottom line healthy.
Just recently, we saw the negative response to one bank's fee structure changes. It's likely that if they had monitored the online chatter among their customers, they would have known far earlier about the negative sentiments and so would have been able to react much faster.
Social information such as this is readily available in the stream of Tweets and Facebook posts that surface every single second. There's great potential for businesses of all sizes to utilize these social channels to gauge customer sentiments about hot topics.
There's also great opportunity for new business models to emerge. One example is a 9-person firm in Israel that manages an online site that uses analytics to aggregate thousands of social media feeds to provide their audience with a single view of information, research and opinions on various medications on the market. They do not promote one drug or treatment over another. They simply provide a single view of related data for consumers to read what other patients have experienced - in their own words - so they can make their own decision.
No matter the staff size, annual revenue or number of offices, Big Data can be a big advantage for small, medium and large businesses - if they have access to the tools that can help them link relevant information sources while finding useful insights that are buried deep within.
One business that figured out a smart way to make big data work for them is LaVan & Neidenberg, a Florida based law firm that serves 20,000 veteran and Social Security customers. Like many smaller businesses, LaVan & Neidenberg, a company of 120 employees, is applying advanced technologies such as analytics to tackle complex data related challenges and ultimately drive growth.
The firm found they needed a better way to keep up with mounting paperwork as the number of veterans filing disability claims began to rise. Data stored on disparate systems resulted in processing delays for customers. This time-consuming, manual process hindered the firm's ability to analyze and respond to benefits claims within an acceptable period of time. To fix this, LaVan & Neidenberg chose a social software and analytics solution.
They now can process claims 66 percent faster because all critical information is available in one place, so they no longer have to spend hours sifting through paperwork and digging through a client's paper file to make sense of claims. Results have been staggering for this small firm. They've more than doubled their client base in just one year, resulting in an 80 percent increase in their gross revenues.
All of the information that's now available can help smaller businesses, especially, be more focused. It's less about hunches and more about data these business owners can rely on and use to make better decisions based on real insights pulled from the plethora of data out there.
This can help the owner of a smaller business understand the truly important characteristics of their business. In many ways, it's no different from an employee at a large enterprise using data mining tools, except that for smaller business owners, the data they need is often free and the tools that can help them analyze it is very accessible bringing them a step closer to understanding their customers better.
Big Data enables small businesses to have new conversations with their customers. And, emerging global social networks are taking them beyond their geographical boundaries - often overnight. Big Data can help small businesses make their problems smaller, paving a path for them to capture new opportunities and succeed.