Big Data And SaaS Will Become Relevant For Small Businesses In 2013

Editor's note: Chris Luo is VP of marketing at FiveStars. Previously, he ran small business marketing at Facebook and acquisition marketing in Asia-Pacific for Google AdWords. Follow him on Twitter @chrisluo.

Over the past few years, most of us who work at mid to large-sized companies have seen our productivity multiply because of big data and SaaS applications. But small businesses have not experienced the same benefits. Rather, they have been left in the dark, trying to understand what drives their business and make adjustments. In 2013, this will change.

I witnessed first-hand the impact of big bata and SaaS on enterprises when I was a senior marketing manager at Facebook leading their SMB marketing team. My team and I accessed vast amounts of data that covered who my customers were, how they behaved on our site, and how much they spent on our advertising products. The data was accessible to us through an in-house data warehousing layer of our Hadoop clusters, called Hive, which made querying Facebook's massive quantities of data easy.

Visualization and exploration of this data was also fast because of in-house tools, as well as various commercial tools like Tableau. Moreover, when our team wanted to drive new trigger-based marketing campaigns based on these data insights, we could do it quickly with minimal help from outside teams using cloud-based email and marketing automation tools that were integrated with our internal data.

What's possible today is dramatically different from what was possible when I was a junior marketing analyst at Capital One in 2001. At that time, we accessed data on servers by querying relational databases using SQL, but the amount of accessible data was an order of magnitude smaller. Visualization and exploration mostly happened in Microsoft Excel. In order to launch a single marketing campaign, we had to work with multiple departments over several weeks.

But many local businesses are still using cash registers or are operating POS systems that run on Windows CE. E-commerce shops can use Google Analytics to understand how visitors to their sites are behaving but have little insight on how Facebook and Twitter drive sales. While companies like Constant Contact have made email marketing easy for small businesses, the limited integration of email lists with point-of-sale or website data has made it impossible to drive relevant behavioral trigger-based campaigns.

However, we are starting to see changes. The convergence of big data and SaaS is finally coming to small businesses, and we will see their impact accelerate in 2013. The impact will be similar to how enterprises have been affected, but there will be a few important differences.

Access. Greater access to data for small businesses, who are often local businesses with physical locations, will not necessarily be about processing huge quantities of data but rather about capturing and integrating disparate sources of data. Some of this data had previously not been recorded at scale or seen in one place. As an example, companies like Euclid Analytics are enabling small businesses to access data on foot traffic and time per visit, when previously this data was manually calculated and sampled. For small e-commerce shops, SumAll is pulling data from multiple social media sites, Google AdWords, Google Analytics, and various e-commerce platforms and putting them in a single dashboard.

Visualization. Visualizing data will also be important for small businesses, and companies like InsightSquared are creating beautiful online dashboards for small sales-driven companies. But they aren't building tools for deep exploration, because small business owners simply don't have the time for this. They need insight at a glance, and the winning companies are relentlessly seeking to improve their dashboards to drive immediate insight. Small business dashboards will drive beautiful insight.

Automation. Small businesses are also going to be able to do the behavioral marketing that large companies regularly do today. However, it will be even cooler because it won't be based on just web visits or email opens, but also on customers' repeat visits to their physical stores or customers coming to the store for the first time. My own company, FiveStars, is calling this future trend "loyalty automation." It will be marketing automation for local businesses.

This year is going to be a year of dramatic changes for small businesses because startups are finally giving them access to previously inaccessible data, delivering actionable visualization of data, and driving loyalty automation. It's going to be an amazing year!