When you hear buzzwords such as “big data,” “data mining,” and “data analytics,” you might feel like your small business is at a disadvantage.
After all, how can you compete with larger businesses when it comes to data?
Thankfully, being a small business doesn’t mean you have to miss out on the benefits of big data. One way you can impact your entire operation is by utilizing dark data.
Dark data–the data that companies collect but don’t use–can be extremely valuable for small businesses. In fact, dark data may be even more important for small businesses than it is for large organizations.
Why? Small businesses typically have less data overall. This means that the dark data they do have is usually more valuable since it represents a larger percentage of their total data.
In addition, dark data can help small businesses in many ways. For example, dark data can be used to improve customer service, target marketing efforts, and make better business decisions.
So how can your small business make use of dark data? In this article, we will guide you through understanding and using dark data.
What is dark data?
Before diving into how to use dark data, let’s first look at what dark data is. Dark data is any information a company collects but doesn’t use. This can include everything from customer purchase history to website usage data.
For example, if you run an ecommerce store, you likely collect data on every purchase your customers make. However, you might only use a small portion of this data to improve your product recommendations or track customer satisfaction. The rest of the data goes unused and becomes dark data.
It’s important to note that dark data is not necessarily “bad” data. In fact, dark data can be extremely valuable. The problem is that most companies don’t know how to use it.
How is dark data different from big data?
It’s common to hear dark data and big data used interchangeably. However, there is a big difference between the two.
Big data refers to any data that is too large or complex to be processed using traditional methods. This can include everything from social media data to financial transaction records.
On the other hand, dark data is data that a company already has but doesn’t use. It may or may not be big data.
For example, a large company might have big data that it doesn’t use. However, a small company might also have dark data, even if it’s not considered big data.
Following the dark data trail
Learning what dark data is and how it can be used practically starts with understanding how it is generated in the first place.
There are two main ways dark data is created:
1. Data that is collected but not used
2. Data that is used but not monitored
The first type of dark data—data that is collected but not used—is the most common. This happens when companies collect data but don’t have the time, resources, or knowledge to make use of it.
The second type of dark data—data that is used but not monitored—is less common. This happens when companies use data but don’t track how it’s being used or what impact it’s having.
For small businesses, it’s essential to avoid both types of dark data. Collecting data that isn’t used is a waste of time and resources. And using data without monitoring it is like driving blind–you might end up going in the wrong direction.
The cost of dark data
For small businesses, dark data can be costly in many ways.
1. Wasted time and resources
The first cost of dark data is wasted time and resources. Collecting data takes time and effort. And if that data is never used, all that time and effort is wasted.
For example, what would you do if you had a warehouse full of products that no one wanted to buy? Or products you never intended to sell?
You would probably get rid of them as quickly as possible, right? Whether by removing them to make room for better products, or by finding new and unique ways to sell them, you know that you should do something with those items.
The same is true for dark data. If you have data that you’re not using, it’s taking up valuable space. And it’s costing you time and resources that could be better spent elsewhere.
2. Missed opportunities
The second cost of dark data is missed opportunities. When you have data but don’t use it, you miss out on opportunities to improve your business.
For example, let’s say you have a customer database with information on each customer’s purchase history. If you’re not using that data, you’re missing out on opportunities to upsell and cross-sell to those customers.
You might also miss out on opportunities to identify trends and make better decisions about your product mix. This can lead to lost sales and lower profits.
3. Competitive disadvantage
The third cost of dark data is a competitive disadvantage. In today’s data-driven world, the companies that are winning are the ones that are using data to their advantage.
If you’re not using your data, you’re falling behind. Your competitors use data to improve their products, find new customers, and make better decisions. And if you’re not doing the same, you’re at a competitive disadvantage.
For instance, say you operate a small electrician service. Your competitors use data to track customer satisfaction, identify trends, and find new localized marketing opportunities. Tracking dark data such as customer sentiment can be a great way to improve customer service.
But if you’re not using data, you’re at a disadvantage. You’re not tracking customer satisfaction, so you don’t know how to improve it. You’re not identifying trends, so you don’t know what services or products to focus on. And you’re not finding new marketing opportunities, so you’re not reaching as many potential customers.
In short, dark data can cost you time, money, and market share. It’s important to avoid it if you want to stay competitive in today’s data-driven world.
How to avoid dark data
The best way to avoid dark data is to plan what you’ll do with your data before you collect it.
1. Identify your goals
The first step is to identify your goals. What do you want to use your data for? How will it help your business?
Be specific with your answers. For example, rather than saying, “I want to use data to improve my marketing,” say, “I want to use data to track customer satisfaction and identify new marketing opportunities.”
2. Collect the right data
Once you know what you want to use your data for, you can start collecting the right data. This data should be specific to your goals and be easy to collect and analyze.
If you’re not sure what data to collect, start with the basics. For example, a retailer might want to track customer purchase history, product reviews, and social media mentions.
3. Analyze your data
Once you have the data you need, it’s time to use it. This data should be analyzed regularly to identify trends and make better decisions about your products and marketing.
Dark data can cost you time, money, and market share. But you can avoid these costly mistakes by having a plan for what you’ll do with your data before you collect it.
But how should you use your data? That depends on your goals. But here are a few examples:
Use customer purchase history to create targeted marketing campaigns
Use product reviews to improve your products and services
Use social media mentions to identify customer sentiment and pivot to new opportunities
No matter what your goals are, make sure you’re using your data to its full potential. Otherwise, you’re just wasting valuable resources.
How to get started with dark data
If you’re not sure where to start with dark data, don’t worry. There are plenty of resources available to help you get started. By following the tips and techniques above, you can get started on your dark data journey today.
Check out some related resources:
How a leading fashion retailer is using data to drive growth
POV: Next-Generation Banking
Embracing the future of data with augmented BI
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