In my last post, I spoke about the need for small business to use big data capabilities. In this post, I want to talk about engaging a partner that can unlock the potential of big data for small businesses that don’t have the scale to build an analytics function in-house.
Big Data is big business today and in a trend that reminds me of the Klondike Gold Rush, it has attracted many companies that now offer Analytics as a Service. The problem for a small business looking to use analytics as a competitive advantage is no longer lack of choice but too much choice. The good news is it’s not hard to pick the ACE from the deck.
Let’s say you have a lemonade stand. You start work at the crack of dawn every morning, when the rest of the world is still dreaming, by mixing just the right amount of lemon juice, sugar, water and ice for the thirsty travellers that would pass by your door that day. It’s a lot of hard work but the satisfied expression on your customers face as they take their first sip makes it all worth it.
The only problem is you never can tell what kind of day you will have. On some days business is so good that you are sold out by noon yet on some other days you have to be at it till evening. If only you could plan better, expand and understand what is it that drives demand other than quality which doesn’t vary.
Lately you have been hearing about the power of big data, analytics and prediction and you are considering engaging an analytics partner to answer some of your questions.
So how do you go about finding that ACE in the data space?
ACE stands for Analyse, Conceptualise, and Empower which are the three things that an ACE analytics partner brings to the table.
Let’s look at each of these one at a time:
An ACE analytics partner should be able to do what you can’t afford to do- step away from the lemonade stand.
- An ACE will take in a bird’s eye view of the landscape.
- An ACE will use social media, surveys and buying patterns to understand the voice of your customers.
- An ACE will tell you the global trends that have the power of creating a huge disruption that are sneaking past you unnoticed.
To you, the lemonade stand owner, an ACE will tell you that your usual customers are neighbourhood women who stop by as they return back from their yoga classes and they love the freshness of your ingredients. They also find it very convenient that you accept cash and the price is such that they don’t have to do carry much of it. Whenever there is a soccer game in the neighbourhood schools, you get double the usual traffic. Most of these customers would love to be able to order online and pick instead of having to wait in queues. Though your product is very popular today, your key customer segments is increasingly getting conscious about their sugar intake. And by the way, locally, the council is going to start a construction that will restrict entry to your street soon. Also you haven’t been around that long but the demand won’t be as strong in winters as shown by industry trends.
After Analyse, comes Conceptualise. If Analyse is the bird’s eye view, conceptualising is all about identifying the prey and plunging steeply downwards at a high speed to capture it.
- An ACE analytics partner will tell you which one of the insights that they have given you are Actionable Insights.
- An ACE will quantify the impact of the generated insights- the likely impact and potential opportunity in dollars.
- An ACE will propose actions and recommendations that will help you realise the benefits from identified opportunities
- An ACE will work with you to create a rolling 90 day action plan for acting on the recommendations starting with top 3 opportunities.
To you a lemonade stand owner, an ACE will tell you the upcoming construction that will block access to your street for soccer moms and dads is like to result in a revenue loss of 10%. Not mixing the sugar right in the morning but giving the customer option to choose will increase satisfaction and loyalty by 1% while saving you some cost. The 20 cent increase in price to make a glass cost $1.20 is likely to make it inconvenient for the customer to buy and charging $1.50 is a smarter decision. A hypothetical 90 day plan will look something like below.
Insight Revenue Impact Proposed Action By When Customer trends around sugar consumption -25% Introduce sugar free options 7 days Soccer days bring more traffic +25% Put Flyers in school to increase market share 15 days Upcoming Construction -10% Research Alternate locations, engage school 30 days Impact of winter season -50% Diversification into soup 90 days
After conceptualise, comes empowerment. An ACE needs to empower you, the business owner, because an ACE knows that they will not stay with you forever.
- An ACE will make sure that you know what metrics tell you what success is long before the financial results are in (leading indicators)
- An ACE will create post implementation review templates that will enable you to learn from various actions
- An ACE will leave you with a suite of easy to understand dashboards and visualisations that will help you spot an issue early on
- So how do you recognize an ACE? When you meet an ACE, it would be like meeting a goal mate, a business partner that shares your vision, comprehends your challenges and complements your strengths. Here are a few suggestions to pick an ACE.
- Ask all potential suitors what they know about your business. If an analytics partner is unable to personalise their offering for your business and its unique needs, you can’t expect them to help you understand your customers and make your offering personalised. On the other hand, if you hear them talk and think ‘They totally get my business’, it is a good first sign. An analytics partner will sound like someone who has walked in your shoes and knows how it feels.
- Check the credentials of your potential partner. Who is on their team? What work have they done in the past? Can they share references? You want a healthy mix of the three Es: Education (formal training), Experience (past clients, nature of projects) and Exposure (in your geography and/or industry) on the partner’s resume.
- Request sample work / case-studies. The best visualisations are really easy to grasp and understand and the best case-studies are ones that drive impact for companies similar to yours. If the visualisations and dashboards make you break into a sweat because it looks too hard or complicated, don’t swipe right, keep looking.
- So there. My take on what makes an ACE analytics service provider and how to find one. Don’t settle. Keep looking till you find your goal mate.
Author Profile: Gazal Kapoor is an analytics professional with experience across domains, geographies and industries. She describes a career in analytics as a passionate arranged marriage but that doesn’t prevent her from flirting with writing from time to time.
Gazal Kapoor works full time in Sydney and is a guest blogger for Convergytics.