Five ways to collect business data

Collect your small business data

In this article you will learn:

• Why you should be collecting data

• The different types of data

• Five ways to collect data

• How to analyse the data you have collected

By collecting data, businesses are able to gather information and statistics about different areas of their operations. This information helps them make better decisions, more quickly. It can also help them find areas to improve (by making better products or improve distribution, for example), how to attract more customers and most importantly, how to keep them.

What types of data should you be collecting?

The aim of data is to provide a clearer picture of your business. You may have an idea of who uses your product or service and why, but data can give you even more information around this. It could tell you when customers buy your product, for example, which would help you market it more effectively.

To achieve this, businesses need to focus on different types of data:

Internal data lets you know how your business is performing, especially financially. This data can be gathered from your customer records or point of sale information. For example, if you are running a hairdressing business, you might want to track how many times your customers visit your salon in a month, quarter or year and what their average spend is.

You could also look at customer surveys to find out what your customers think of you, or you could examine cash flow reports to see how much money is coming into the business and how much you are spending.

External data is information about the environment or context where your business operates. This lets you know more about industry trends, what your competitors are doing and how your target market is behaving at a certain time. Although social media is a source of internal data, it can also be a source of external data if you measure how often your business is mentioned vs your competitors or how often customers use your business' hashtag vs that of your competitors. It's important to research credible sources of external data for your industry.

Marketing data is all about your customers. It tells you more about how customers are interacting with your business: do they read your social media posts, for example. This data allows you to tailor your marketing messages more accurately, so that you are more likely to reach your target audience. Market research is an example of marketing data.

How to analyse data

Before you even begin collecting data, it’s important to formulate a goal: why do you need this data, and what business problem are you hoping to solve with it? Back to the example of being a hairdresser: are you collecting data from social media to give you a better idea of the styles your target market prefers? Once you are clear on your goal, decide how you will collect the data and then how you will measure it. Once you have collected your data, use tools like Excel or Google Sheets to break down the information you receive. You may choose to represent this information on a pie chart or bar graph to make it easier to visualise.

Tip: It's a good idea to make sure that your staff can all use the tools you’ve employed. This ensures that your business embraces a data-driven culture.

How to collect data

There are several different methods for collecting data. For example, imagine that you wanted to gain a better understanding of your customer – or, to be more precise, how your business attracts first time customers. You could collect this information from asking customers themselves. There are a number of ways you can do this:

Interviews and focus groups allow you to spend time with your customers, asking them questions that will help you get to know them better. For example, you could get a group together, and ask them what would make them buy your product or service.

Surveys include digital or physical questionnaires about things like buying behaviour. Here, you could ask multiple questions related to why customers choose your business, or why they don’t.

Transaction tracking can be gathered form point-of-sale platforms, and lets you know how, when and where people buy your product. This lets you know what products are purchased and when.

Observation, or watching your audience, lets you see how people experience your product or service. Imagine, for instance, you run a sweet shop: you’d watch your customers come into the shop, look around the shelves and then make their purchase. This would provide information about what they like and don’t like, and how easy it is to navigate your store.

Social media monitoring is useful because it is cheap and easy to set up social media platforms. These platforms let you see what type of people interact with your product. Keeping track of your page impressions and the time spent on your platforms or website will provide this information, again letting you know what attracts potential customers.

A final thought

Remember to keep your data safe and secure. Cybercrime has become a real threat for businesses, and if your data fell into the wrong hands, it could be used by competitors to undermine your business or, worse, result in huge financial loss or even closure.

What can you do right now?

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Key Takeouts

Collecting data may help you make better decisions that allow you to run your business more effectively.

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