Today we are gonna baseline and compare the estimations of the minimum price tag of data analytics and management consulting from the perspective of a small business (SMBs) owner.
Ok, let’s imagine a small business in New Jersey who’s into men’s clothing & accessories called Urban Men. Urban Men sells most of its products via its e-commerce website. Their products are exceptional and have been picking up noticeable traction among men around the U.S. At this stage, their looking to grow the business further.
John the founder of the brand knows a few things about their customer base, yet there are many uncertainties.
They know that their customer base is growing, but not quite sure about the main demographic profiles of the customers. He knows the brand is gaining traction outside of the Garden State, but not exactly from where. He also knows that he wants to launch another ad campaign, but he is unsure what the most efficient way to do this is. This is where data analytics and management consulting usually comes in.
At present, there are four main ways that John or any SMB could approach for a solution:
*Traditional consulting (i.e. McKinsey, Deloitte, a local boutique consulting agency)
*Outsourced analytics (i.e. Data Outsourcing India, Data Entry Outsourced, EDICOM)
*In-house hiring (i.e. an in-house analyst), not an approach
*Self-serving Analytics tools (i.e. Google Analytics, Qlik, Tableau, Zoho)
These four options all fundamentally solve the same problem for John or any SMB: they help remove the uncertainty that comes from investing money is not just an ad campaign but many more crucial business decisions.
Ok, they are quite reliable. These consultants have a lot of experience in different industries and are expected to deliver results. Moreover, a big plus is that the project will be a short term engagement so It’s relatively low-commitment compared to hiring a full-time employee. But wait, it does have its cons, according to interviews and online research, it is possible that John will be charged roughly $50–100/hour minimum if John’s really lucky. So if the project lasts a week, that’s around 40 hours of work. In total, the project will cost roughly around $2,000–4,000. Then there are other matters to look into such as availability of the consultants, quality of their work, the impact they could create etc.
Minimum Price Tag ~ > $2,000–4,000 per project
Outsourced data analytics
Talking about the pros of outsourcing, the price is highly dependent on the scope of a project, a smaller project would roughly be in the thousands of dollars with a lower price floor compared to traditional consulting. As in the case of traditional consulting, the project will be short term so it’s relatively low-commitment.
Cons: Outsourced analytics can vary widely in quality so research is important. Also, many outsourced analytics services are typically carried out in places like India, China or other emerging countries. In these cases, the language and cultural barrier should not be underestimated, trust me the struggle is real. This could potentially introduce friction between John and the data analytics service provider. Also, the uncertainty in quality if outsourcing to international firms and the uncertainty in ROI and value added to the business are vital factors that need to be considered before giving the green light.
Minimum Price Tag ~ >$1000 for one week.
Here’s the fact, hiring an in-house consultant would always be on call and would be more familiar with your business than an outsider. You only have to provide training about the context of your business and industry once, minimizing the friction of delegating tasks (compared to working with a consultant. Butttt, searching for a good analyst is very time-intensive, then hiring one is a big commitment. On the other hand, it isn’t worth keeping a full-time analyst during the offseason for John or any SMB in that case. With a minimum salary of roughly $60,000, an in-house analytics specialist would be as much of a luxury as hiring a personal chef.
Minimum Price Tag ~ > $60,000 for one year (avg. ~$1150 a week) plus benefits and taxes
Self-serving data analytics Tools
So we gave you a complete picture of the approaches that John could take with regards to analyzing his analytics. Now let’s see how John could benefit from self-serving data analytics tools such as Qlick, Google Analytics or Zepto.
Ok, this might be a bit complicated than it sounds. While it may seem like a data tool is the best solution, coming to that conclusion is fairly complex due to how data tools are sold, deployed and used. Moreover, in addition to the huge variance in price tag and functionality of data tools, they also have a lot of hidden costs, which causes several main issues:
Buying a self-serving data tool locks you in. Self-serving data tool companies today typically function with a subscription or SAAS (software as a service) model. There are a complex installation and implementation process which may require IT consulting for the change management (the whole purpose of self-service tools is lost). Due to high friction around moving data from one data system to another, switching tools is extremely costly in terms of time and money. If John goes through all of this effort to get a tool and, after three months, realizes that it was the wrong tool for her business needs, the high switching cost of finding a new tool can be paralyzing.
Furthermore, most data analytics tools require a degree of expertise to deploy and use. Many tools can create sleek dashboards and charts, but the biggest problem that John would have is how to turn his dashboard metrics into business insights and an actionable marketing strategy. Even if he sees a clear trend, it’s uncertain whether the tool would give him the confidence needed to make sound conclusions. Because data is inherently messy, looking at graphs does not equal gaining actionable insights.
Data tools require some level of technical skill in order to properly interpret every graph, p-value, and z-score. Thus, the value of the tool for empowering Sam to perform in-house data analytics is entirely dependent on Sam’s data expertise.
For now, let’s assume John doesn’t realize this second issue because it’s a hidden cost and buys an appropriate tool like Tableau Professional that currently costs $840 a year. Then there are other issues that he needs to consider as well, such as
*Time to research a tool
*Time spent asking for quotes and comparing prices
*Time and/or money (if hiring technology consultants) to deploy and integrate the tool with the business and existing data infrastructure
*A high level of uncertainty of ROI due to the fact that most of the data analytics tools lack the expertise to correctly interpret the data
*Inflexibility since many tools lock users in for at least a year
*Time (2–3 weeks) taken to switch tools and deploy the new system
*Training in-house talents with an out-of-the-box tool seem to be the easier option on the surface, but hidden cost and hassle can jeopardize the whole purpose.
Minimum Price Tag ~$849 a year per user ($70 a month)
While a product like Tableau is the best solution best for John’s price range, this is also the option with the greatest amount of uncertainty due to the high commitment and the expertise requirement.
That’s the whole concept on what Zepto is built upon, building a low-commitment and cost-effective platform that assumes the user has no prior training or knowledge in data analysis.
As a human-centered data software company, we’re not looking to make another data visualization tool for the sake of generating fancy charts and dashboards.
We want to be simple yet empower the untrained users while also having high impact in growing a business using data; we want to start by guiding users like John and other SMB owners through the analysis of Zepto data step-by-step, delivering powerful data-driven insights with the help of AI and Machine Learning that only Zepto can give, and providing a rationale for each insight.
Imagine having an app, with thousands of similar analyses and business cases under its belt, telling John who and where his best users are, and how the algorithm reached that conclusion.
Compared to these other choices, this would clearly be his best option, giving his actionable business insights with low risk, high certainty of impact, and at a price point that’s affordable to small businesses, oh, also with just a price tag of $69 per month! (Sign Up for a free trail)
This is our vision to make data analytics accessible to every person and every organization.