Make sure your company is taking advantage of these powerful tools.
- Big data consists of the information businesses collect about prospective and existing customers.
- CRM software can help companies gain insights and understand their customers better based on the data collected.
- Using robust CRM tools, even small businesses can leverage the power of data to make informed decisions.
- This article is for small business owners who want to use data to increase sales and improve customer retention.
Big data is everywhere. Whether it comes from the web, business applications or deep inside machine logs, big data is helping all types of businesses grow as they become more strategic and profitable.
As a small business owner, you’re probably thinking, “What does big data have to do with me?” After all, big data sounds like another complicated — and expensive — buzzword created for companies with significantly more time and resources. But if you use certain types of business applications, you too can reap the benefits of big data, even on a small business budget. One prime example is customer relationship management (CRM) software, which offers actionable data right at your fingertips.
What is big data?
Big data refers to the massive amount of information businesses collect from online and offline sources. These sources include websites, social networks, mobile apps, software, documents, computer logs, sensor networks and more. This explosion of data, however, isn’t necessarily significant because of its size but because of what it can do.
Although it is often described in terms of the five V’s — volume, value, variety, velocity and veracity — there’s more to big data that makes it such a big deal, said Javier Aldrete, senior vice president of product at ActivTrak.
“The benefit of the big data movement [is about] driving action and value out of data by applying algorithms and predictive models to solve specific business problems,” he said.
Simply put, big data delivers all types of intelligence that help businesses make better decisions.
What is a CRM?
A CRM is a system businesses use to manage how they work with current and prospective customers. It is used primarily by salespeople and typically takes the form of CRM software, which provides a centralized location to store, view and organize customer information.
While CRM systems were developed to help sales representatives be more efficient and spend more time selling, they have become a reporting tool for tracking the health of sales pipelines and accounts, Aldrete said.
When used correctly, a CRM benefits small businesses in several ways.
Benefits of CRMs
CRMs make small businesses more profitable by helping them close sales and fostering customer relationships.
“The small business CRM user will have a wealth of information to arm themselves with when approaching a prospect company with a new proposal,” said Mike Salem, vice president and group head of cybersecurity at IHS Towers.
This information includes the benefit of knowing the right people to contact, such as decision-makers and gatekeepers, to improve the chances of winning a contract with prospects.
“A CRM solution empowers the sales team with a tool that will help them close deals,” Salem said.
CRMs also give companies a “bird’s-eye view” of which prospects, industries, company sizes and other targets are most profitable, Salem added.
“They can better focus their efforts based on what the CRM system tells them [and] guide [their salespeople] into the direction that will yield the highest potential profitability,” he said.
Furthermore, CRM systems enable businesses to understand customers better, establish trust and deliver excellent customer service.
“We’ve all had this experience: The second time we call into a company to buy a product or get support, we talk to a different person than the first time and we need to reeducate the new person about our business or problem,” said Larry Augustin, managing director at Augustin Ventures. “It typically doesn’t lead to a good experience and we, as the consumer, feel that the vendor doesn’t really understand us.”
“CRM solves that problem,” Augustin said. Because CRMs collect and store customer information from every interaction, they allow employees to deliver a consistent, high-quality experience every time they engage with a current or future customer, with the goal of solidifying customer relationships and loyalty in the process, he said.
All of these benefits are based on information from the CRM software, which can seamlessly unite data from many sources from within or outside the organization. This provides a holistic view of every customer to every employee in real time.
How do big data and CRMs help small businesses?
Big data and CRMs are connected in that a CRM extracts value from big data. This helps employees understand the who, what, where, when and why before they connect with customers, Augustin said.
There are many types of data small businesses can find through their CRM. For instance, staffers can sort through insights that help them attract and sell new clients, Salem said. Examples of such data and their uses include the following:
- Company names and details, with the right contact people and decision-makers within the companies noted so salespeople know who to target.
- Social media information — like company news — to keep salespeople up to date on prospective and existing clients.
- Historical records of all interactions with the prospect or client, making the relationship more personal.
- Saved history of all the projects, opportunities and proposals discussed with the prospect, allowing employees to understand the prospective client’s needs better and prepare improved and more customized proposals.
- Revenue projections, based on upcoming opportunities and their potential to be converted into profitable projects so leaders can create sales forecasts.
Having this much data at your fingertips can sometimes be overwhelming for small businesses. The key is to gather only the data you need the most and to use the reporting tools within your CRM software to analyze it.
What is little data?
The enormity of big data can require massive amounts of resources that small businesses simply don’t have. One way for smaller companies to achieve the same beneficial outcomes is to look at “little data,” which contextualizes big data within the scope of small business capabilities.
“Today, there is exponentially more information available about every single customer,” Augustin said. “The goal, in my opinion, is to create little data out of the big data around customers.”
Unlike big data, little data can be found in readily available sources that don’t require any additional investments. One example is how CRM can be used to “listen” to what customers are saying about a brand.
“A company could pull data from Twitter or Facebook to hear what customers are saying about their service, product ease of use, billing methodologies, etc.,” Augustin said. “This customer feedback can be analyzed to then revise or improve a product or service.”
CRM systems — and the artificial intelligence functions within them — are vital tools for helping small businesses manage their data.
Companies can also segment and qualify leads using information that can be found on the internet, Augustin added. In doing so, small businesses with limited marketing and sales resources can use smart filters and segmentation tools in their CRM to identify the best prospects.
In some cases, small businesses don’t even need to mine for little data using external sources, Aldrete said.
“We’ve found that many companies are only scratching the surface of the business benefits hiding in the data they already have, which we consider to be little data,” Aldrete said.
When companies think of big data, they often imagine a risky, multimillion-dollar, resource- and time-intensive information technology investment, but that doesn’t always turn out to be true, he added.
“The fact is that business benefits hide in all data, so the size of the data doesn’t really matter,” Aldrete said. “Whether you have big data or simply transaction and customer data, what matters is the business outcome you are trying to achieve and how you process and analyze that data.”
Leveraging CRMs to gain actionable insights
Combined with CRM software, actionable data — big or little — is accessible to small businesses everywhere. Today’s advanced CRM tools can help small business users by providing only the most essential data they need when it matters the most, Augustin said.
“By cutting through the noise and making little data out of big data, smaller businesses can level the playing field and compete with their larger counterparts in an increasingly competitive global market,” he said.
The following Sara Angeles, from 2023 provides their research perspective. HERE