The digital age has leveled the playing field for most businesses. Through online marketing, small and medium businesses (SMBs) could suddenly compete for attention with big corporations.

As data becomes more important, using it to improve business processes becomes more challenging. In terms of impact on continuity, the ability of SMBs to meet these challenges in the digital age increasingly becomes a matter of survival.

Key Takeaways

  • SMBs fail to prioritize data analytics to drive their decision-making, missing on valuable insights that can improve their revenues significantly
  • The lack of effective data collection, interpretation, integration, and automation are significant barriers holding SMBs back from digital transformation
  • When SMB owners realize the immediate and long-term value of data, it paves the way to becoming competitive in the digital age

Many Factors Can Inhibit SMBs During the Digital Age

Social media, email, and websites were all SMBs needed to reach out to their target audience, essentially replacing big-budget sales and marketing campaigns at pretty much zero cost.

On the downside, with everyone having an equal shot at the same opportunities, competition for eyes became fierce, so it began to boil down to personalization and target marketing. Data became the ammunition businesses could use to maximize conversions by personalizing their customer messaging, and consumers began to expect no less.

So, why are SMBs having such a hard time coping with digital transformation? It all boils down to the data. The data helps SMBs compete with the big players in their market, and they have access to the same data coming in as big companies.

However, SMBs typically place little value in investing in resources or technology for digital transformation when they’re busy putting out fires in their businesses. Failing to take a long-term view on the value of data is the primary reason SMBs are being held back in the digital age.

Below are five reasons that data doesn’t work for small businesses as well as it should.

Small Businesses Have Trouble Gathering Data From Different Sources

Data volume has been a real problem for SMBs, not because there’s so little of it, but because there’s too much. For small businesses with limited data storage and resources for analysis, it’s important that they can use the data they collect.

Data is divided into unstructured and structured data. If you have a website, maintain social media pages, and send emails, the data you collate from those are mostly unstructured, meaning they’re not categorized or analyzed easily.

If you send out online polls or deal with spreadsheets, you receive structured data that a computer can easily process.

However, most of the data your small business has access to is unstructured data and putting all that data together takes a lot of work, especially if you do it manually. To gather data efficiently, you need data analysis software.

Such software collects information from different sources on one platform and generates reports you can refer to for use in sales, marketing, or operations.

data analysis software
Source: IBM

If you have an e-commerce website, for example, the software gathers relevant data from visitors who buy and don’t buy. Then, it analyzes the data, provides you with insights, and makes forecasts you can use to maximize sales.

It’s Hard for Small Businesses to Interpret the Data

Another difficulty for SMBs is understanding how they can use or analyze their data to benefit the business. Data analysis software is only as good as the data available, which means you need to know how to choose the data to feed it.

When configuring the software to collect data, you need to ensure they’re from sources that provide you with the kind of insights you can turn into actionable ones for improving your performance. You also need to track the right metrics and use them to make data-driven decisions.

The easiest way to do that is to hire a consultant or data scientist to make the right queries and interpret the data, but most SMBs don’t have the budget for that. Here, comprehensive data analysis software can save the day. However, you should still understand the features you want incorporated into your software.

For example, you want software to carry out data mining and uncover trends in your social media marketing. You might also want one that can create heatmaps that help you understand those parts of your webpage that are getting the most attention from visitors.

create heatmaps
Source: Contentsquare

These analytics tools can be in one suite or separate software. As long as you can interpret the data into a usable form, you’re good.

Small Businesses Find It Hard to Integrate the Data

The most practical thing for any business is to have one system for collecting and interpreting all the data. That way, everything dovetails neatly. However, while 67% of SMB companies spend quite a bit on data analytics, they use different tools for various aspects of their sales, marketing, and operations.

For example, you might use both Facebook Analytics and Google Analytics. The insights from these tools are potentially valuable but fragmented. Without a unified analysis, you won’t get the most critical information needed to create a cohesive digital marketing strategy.

Additionally, most SMBs use more than two tools, making it challenging to integrate the valuable insights they generate into a unified whole.

To ensure data integration, SMBs need to get management buy-in for data management investment. This would require investing in both software and people to create the infrastructure to merge all data streams into one. You need to spend time and money in ensuring the proper management of data from sales, marketing, and operations.

Small Businesses Are Slow to Automate Their Analytics

Another thing holding SMBs back from digital transformation is the lack of effort towards automating data analytics. As SMBs gather more data, it becomes harder to extract the relevant information a business needs in real-time, even with software and an integrated data infrastructure.

The most common challenges for SMBs include data cleaning, repetitive analysis, and regular report generation. If there’s a need for human input in collecting and analyzing data, it slows the process down and takes up valuable human resources.

You can address that issue through automation software, available for almost all facets of a small business. Marketing automation software, for example, can automate everything from sending out social media posts to return-on-investment (ROI) reporting. You can set and forget it and reap the rewards without having to do anything manually.

Marketing automation software
Source: HubSpot

Some SMBs Can’t Adopt Analytics Rapidly

As with most disruptive technologies, the effort required to integrate data analytics and automation into existing systems is often one of the biggest barriers to adoption. While SMB owners know that data is important, it’s not a priority for them because they don’t have the resources to spare.

You might be reasoning it out this way: data collection and analytics can help me optimize my business. However, I should make sure I have a business to optimize before I even think of investing in them. This is a classic example of missing the forest for the trees.

What you might not see is that data has immediate value for your business if you know what you need and how to process it. You can generate more revenue through data analysis because it helps you improve your sales and marketing strategy and increase your customer engagement. Instead of thinking of data analytics as “nice to have,” consider it a critical part of your business process.


SMBs have benefited from the digital age because it made them more accessible to customers and vice versa. However, it’s critical for SMBs to take advantage of this access by transforming how they do business.

One of the most critical phases of this transformation is data analytics and here, sadly, most SMBs continue to use antiquated business practices. This failure to embrace change is what holds them back in the digital age.

The ironic thing is that investment in data analytics software doesn’t cost all that much nowadays. Many analytics tools are available in free or lite versions designed explicitly for cash-strapped startups and SMBs like yours.

It’s time to rethink your priorities and plan for digital transformation through data. If you commit resources toward building an efficient data management system, you create a bank that keeps giving to your business.

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