Tap House Grill

Ask many small-business owners if they’re incorporating “big data” and you may get some blank stares. Some say the growing volume of information on things like customer patterns on social media is just too costly to make sense of.

Yet that is about to change—and dramatically, says Steve King, an expert on small-business trends and a partner at Emergent Research of Lafayette, Calif. The author of the recent Intuit 2020 Report, “The New Data Democracy: How Big Data Will Revolutionize the Lives of Small Businesses and Consumers,” (view the PDF) Mr. King believes in big data as a game-changer for small business in 2014.

“There’s so much hype about ‘big data’ that it can be intimidating for the small-business owner, especially when people start talking about ‘terabytes’ of data,” he says. “Because it’s so hyped, we’re finding small-business owners saying that it’s too hard for them or it’s too expensive or ‘It’s just not for me.’ But because of that, they’re leaving big opportunities on the table.”

One of the lowest-hanging fruits is customer relations management software, or CRM systems. “You might pay just $10 or $20 a month, and it allows you to pull information on customers and their contact information and purchase history in one place,” Mr. King says.

More small businesses also will harness Google Analytics, a free tool that provides analysis of Web traffic.

“People want to be engaged with your restaurant, so why not give them what they want?”

— Scott Ward, Restaurant Chain Owner

Scott Ward, 54, owner of suburban Chicago restaurant chain Tap House Grill, is already a believer in big data. He says he’s seen the effects of targeted marketing to communicate with his customers.

Mr. Ward hired Eateria, a restaurant email and social media marketing company founded by Ola Ayeni of Naperville. Eateria helps restaurants quickly build a customer base and generate repeat business by collecting emails and mobile phone information from current and potential customers. The data also can be synced to Twitter and Facebook accounts.

Mr. Ward says he was surprised at how quickly Eateria grew his customer “subscriber” base for his five restaurants, from just a few in 2011 to more than 20,000 subscribers today. Mr. Ward says the marketing efforts are a big reason behind a 12 percent increase in sales to $11.3 million last year over 2012, a significant jump in the restaurant industry.

“People want to be engaged with your restaurant, so why not engage with them and give them what they want?” he says. “Some business owners don’t want to spend the money for these programs, but I think it’s just ridiculous not to.”

Still, data sets aren’t always as easy to analyze and collect as email and mobile phone information. Larger volumes of data—such as detailed demographics on customers and their buying patterns—may take the expertise of a data professional or accountant, says Dan Heiser, associate dean of the Driehaus College of Business at DePaul University.

“The barriers to doing big data well are still significant for many,” he says. “You need to have people with the right training, and you need to invest in the tools to handle it. But I think we’re at a point where it’s really going to start to grow.”

http://www.chicagobusiness.com/article/20140111/ISSUE02/301119997/time-to-buy-in-to-the- big-data-hype