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Updated Jan 03, 2024

How Data Analytics Impacts Small Businesses in 2024

There are a ton of uses that can make small businesses smarter, productive and efficient.

Mark Fairlie
Mark Fairlie, Senior Analyst & Expert on Business Ownership
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When Salesforce launched its browser-based CRM software in 1999, the data analytics age for SMBs was just beginning. For many such businesses, Salesforce might have been the first piece of software that constantly monitored and recorded what employees were doing and whether or not they were hitting their KPIs. The amount of data it recorded and the ease with which reports could be created meant that, for the first time, owners could see exactly how well individuals, teams and the entire company were doing.

Today, most business apps, whether they’re accounting software or human resource information systems, record every action and change in real time. These apps create massive volumes of data, which they can share with data analytics platforms. 

Data analytics platforms provide SMBs with detailed insights into all aspects of operations that they can use to cut costs, improve profitability, and identify inefficiencies. Below, we look at three major trends affecting SMB data analytics and how SMBs use data analytics today.

How can SMBs use data analytics?

Data analytics are employed in many ways, but here are the four most important uses for SMBs:

Improved closing rates

One of the main applications of machine learning for small businesses is using it to track customers throughout the different stages of the sales cycle. Small businesses can use data analytics to determine a particular segment of customers that are ready to buy (and, more importantly, when they’ll be ready).

Better customer services

As we covered earlier in this article, data analytics can greatly improve customer service. We discussed one of these in our RingCentral review. This platform records all phone calls, email and live chat conversations over the past 90 days, analyzes them and then presents its results as a word bubble. This visualization is an effective way for supervisors to check for trending issues among customers.

Applications like the word bubble give you a greater level of insight into common issues customers are having that can be leveraged to ensure that customers have an amazing experience with a product, service or brand.  

Identifying and responding to trends

On a macro level, small businesses can use data analytics to identify overarching patterns and trends. For instance, if numerous customers contact a business asking the same questions, it might make sense to create an online knowledge base that addresses these questions in depth. 

Some of the best call center software packages can now analyze incoming calls for content and provide you with suggestions on what to put in your knowledge base. In effect, this new part of your website could hypothetically increase sales as it addresses common questions that potential buyers face or help strengthen a brand’s unique selling point (USP) — all made possible through data analytics.

Better understanding customer behavior

Data analytics provides detailed analyses of customer behavior, and these insights allow business owners to learn what motivates consumers to buy their products or services. 

Small business owners can use this valuable  information to identify which marketing channels to focus on in the future (i.e., save on marketing spend while increasing revenue at the same time).

Data analytics on a budget

The insights from data analytics help reduce how much a business spends on marketing and product development. Rather than funneling big money into multiple marketing strategies that only get minimal results, small businesses can harness data analytics to concentrate on a few that are proven to generate high-quality leads.

The great thing about this technology is that it doesn’t have to cost an arm and a leg. Here are some very affordable resources that can provide small business owners with a wealth of information:

  • Google Analytics and Clicky offer website reporting with free and premium versions. They’re ideal for learning about where your traffic is coming from, which marketing strategies are most effective, how visitors explore your site, potential friction points and more. 
  • Wolfram Alpha is a computational intelligence platform that also comes in free and paid versions. It allows you to compute expert-level answers using their signature algorithms, knowledge base and AI technology. 
  • Microsoft Power BI is a powerful platform for generating visualized business data on everything from gross profit and revenue to store/warehouse demand and turnover. With a Pro option that costs $9.99 per user, per month, it’s an affordable option for most small businesses. 

There are many analytics tools available that can generate data for nearly every aspect of business imaginable, that are either free or inexpensive.

Bottom LineBottom line
No-code and low-code plug-in platforms reduce companies’ need to hire specialist programmers and coders to grab the data from whatever internal or external sources are used.

Data analytics will keep transforming business

About one in four companies are now driven by big data analytics, reported Zippia. The trends mentioned here indicate a swift evolution of data analytics and demonstrate their power to transform multiple aspects of operations. 

Whether it’s mimicking the knowledge acquisition of the human brain through machine learning and deep learning or capitalizing on unused dark data to gain a competitive edge, the new era of data analytics has intensely practical applications that businesses should notice. 

Additional reporting by Luke Fitzpatrick.

Mark Fairlie
Mark Fairlie, Senior Analyst & Expert on Business Ownership
Mark Fairlie brings decades of expertise in telecommunications and telemarketing to the forefront as the former business owner of a direct marketing company. Also well-versed in a variety of other B2B topics, such as taxation, investments and cybersecurity, he now advises fellow entrepreneurs on the best business practices. With a background in advertising and sales, Fairlie made his mark as the former co-owner of Meridian Delta, which saw a successful transition of ownership in 2015. Through this journey, Fairlie gained invaluable hands-on experience in everything from founding a business to expanding and selling it. Since then, Fairlie has embarked on new ventures, launching a second marketing company and establishing a thriving sole proprietorship.
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