Data is the business world’s new oil says Auckland businesswoman Carmen Vicelich; precious, often untapped, and flowing thick and fast through the foundations of every company.
Vicelich says data is simply information. Data tells a story about customer preference, sales success, demographic, motivation. It can be as perfunctory as financial records, or as insightful as the details of where your customers choose to shop and which television channels they watch.
“It can be game-changing,” Vicelich says. “A business that understands its customer data has such an advantage.”
Vicelich is managing director of Data Insight; a business servicing New Zealand’s growing demand for data mining and analysis. Vicelich established the business 18 months ago with just two staff. Today, Data Insight employs 26 and is a finalist in the Business Strategy category of the 2014 Westpac Business Awards.
Vicelich is chair of the Marketing Association of New Zealand’s Data Advisory Network. She says some small business owners believe data is a tool solely for those with deep pockets. And it’s true that some complex data can only be extracted with a level of technology which places it well outside the average small business’s reach.
But Vicelich says well-aimed data projects – even those with modest budgets and straightforward goals – can get information which has the capacity to be ground-breaking for a small business.
Information regarding a business’s customer base is both hugely valuable and relatively easy to access. Who buys this product? Where do they live? Do they a drive brand-new BMW or a second-hand Subaru? Do they have young children or an empty nest? What is their ethnicity, their income, their favourite hobby? A customer profile helps a business figure out how best to appeal to its customers.
How do you get this information? Ask for it.
“Most people don’t mind giving you information if they know it will provide relevance and value for them. They will tell you where they live, for instance, if it means they will receive discount vouchers and they’ll tell you they have four kids if it means you might send them free movie tickets for the family.”
One of Data Insight’s most straightforward projects involved profiling donations to a charity. Through the project it emerged that – contrary to assumptions – the charity’s most generous benefactors were low-income South Auckland families in rented accommodation.
“Sometimes you don’t know what you don’t know,” Vicelich says. “Instead of a best guess, data gives you proof.”
Geo-spatial profiling is another easy target for businesses making their first foray into data mining.
If you have a shop, how far do your customers travel to get to you? If you were considering opening a new shop, or mulling over locations for a new salesperson or franchisee, geo-spatial data could assess potential communities, looking for similarities to your customer profile, and pinpoint exactly where the greatest potential might lie.
Such information saves money, Vicelich says, by improving the odds of success. Business managers are increasingly embracing the potential for data-driven, evidence-based decisions.
“Data is like the new oil, but you need to extract it, refine it and make something meaningful from it.
“The whole subject of data can seem overwhelming, which is why it can often be ignored by small businesses, but it doesn’t have to be.”
She urges small businesses to allocate a little money in future budgets or business plans for investment in data analytics and insight. Specialists can come in to a business on a contract basis and set up systems for long-term data collection, or business owners can take their information to an agency or business specialising in data for analysis.
“It doesn’t matter where you are today. If you don’t have any data, get in touch with an expert and figure out how you can capture some in fairly simple ways to improve your business results. We’re now in the data age.”