Big Data is the latest buzz word to hit boardrooms around the country. But it really is more than a buzzword. Teradata eCircle’s recent survey showed that data-driven marketers are more than twice as satisfied with their marketing programs, versus those who don’t make decisions based on data-led insights. But what exactly is Big Data and how can it help marketers shape their strategy?
What Is Big Data?
I’ll let you in to a little secret here; I hate the phrase Big Data. It’s too Big Brother; it sounds too scary and, well, big. In reality, Big Data is nothing new. It’s simply about joining the dots of relevant data sources to solve the issues which are causing the biggest problems in a business. Whether it’s local market data, customer data or communications data, every company out there has at least one data source at its fingertips. Some organisations have been identifying and using their data in one way or another for years, but Big Data is about doing it better and using data to positively impact the customer.
In today’s connected world, businesses everywhere are under enormous pressure to better understand, engage with and respond to their customers. This requires the effective use of data to gain easily actionable insights. Just knowing what a customer bought is not enough; businesses need to be able to understand and anticipate long-term consumer behaviour, have a rounded of view of where customers are spending their money when they’re not shopping with you, and then quickly implement appropriate strategies to drive improved customer engagement.
It’s no longer about the number of customers in a company’s database, but how well businesses know them and tailor products and services to meet their needs. This means going beyond simply using data to segment customers and provide them with the information and services that seem most relevant to them, through the most appropriate channels.
It means turning your business model around so that everything you do, across every channel, every day, is driven by the needs of your customers. This not only gives them confidence in you, but makes it easier for them to make the decision to buy from you. It’s no longer about loyalty; it’s about customer engagement. And Big Data can help to achieve this.
Making The Most Of Big Data
The use of Big Data should also go far beyond pricing. Fundamentally, any marketing activity should address a real customer need that can only be established by analysing data. A number of marketers fail to consider their customers’ needs and preferences and only focus on price as the main determinant of marketing campaigns.
The popular UK high street retailer, Woolworths, eventually collapsed because the company didn’t fully understand what its customers wanted. Whilst the company featured products at low prices, it couldn’t find a balance between price and quality of either the product and customer experience, which ultimately led to the business failing.
There are many well-known retailers and restaurants with whom no self-respecting person would make a purchase without first ensuring they had a voucher for 20% off, or a free starter. The marketing dream of using discounts to drive loyalty has become a nightmare; it’s built an expectation amongst consumers that there’s always a discount to be had. If one retailer won’t give them the discount they expect, they’ll walk down the high street or search online to find a retailer that will. As I said before, loyalty no longer features in this brave new world.
It’s also important to consider customer activity outside of the company. For example, how often do customers shop with competitor brands, and are they spending more money with these competitors than your company? Joe Bloggs may seem like a top-performing customer if he’s spending £200 pcm with Supermarket A. But what if we were to find out that he also spends £300 pcm with Supermarket B?
This significantly changes our perception of Joe Bloggs and his level of engagement. It also throws up some interesting challenges: why is he spending more elsewhere and how can we tap into that headroom to boost revenue? By partnering with an analytics company which has access to top-quality third party data, marketers can analyse customer behaviour at both a brand and sector level, providing the extra insight needed to give a 360 degree view of their customer base.
Big Data is therefore about more than simply driving marketing campaigns; it should also be used to make business-critical decisions. This could be changes to store opening hours, location and layout, all of which could encourage Joe Bloggs to spend more with Supermarket A.
The Explosion Of Big Data
Whilst the benefits of using Big Data may be clear; the main challenge for marketers is the explosion of data and how to collect it. The rapid emergence of payment methods, such as mobile wallets, together with new technologies, have revolutionised a business’s relationship with its customers.
Long gone are the days when loyalty cards were the only way to identify and collect customer data. Today, products and services are researched, discussed and purchased through a wide variety of channels, including tablets and smartphones. Digital channels have also added a whole new dimension to the mix, with new streams of ‘live’ data and feedback now directly available to marketers through social media.
With a whole host of channels and data streams to contend with, this can seem a daunting task for marketers. Many make the mistake of trying to bring all of this data together all at once. However, what they should be doing is taking the time to understand what their version of Big Data looks like, picking an area of focus and putting the appropriate energy and resources to delivering against it.
Amazon is a great example. The company uses a very simple data model but uses their data strategically to great effect. It doesn’t have stores or a loyalty scheme, instead it uses the vast amount of customer browsing, purchase and payment data to personalise the online shopping experience for each individual shopper. Data is stored and then used to select products based on a customer’s past purchases and viewed items. This is a highly effective way of using Big Data to analyse the lifestyles and preferences of customers, which consequently leads to continued successful sales.
Embracing Big Data
From improving customer engagement to analysing marketing campaigns, Big Data is changing the game for marketers at an impressive pace. The future is about intelligent customer engagement. It’s about marketing to and engaging with the individual; to do that, marketers need to understand what makes their customers tick.
In today’s economic climate, when keeping a business flourishing is a challenge in itself, it’s more important than ever that brands effectively use their data to get to know their customers. The better marketers understand their customers, the more successful their marketing campaigns will be and the quicker they’ll be able to learn and adapt.
Big Data is only going to get bigger. Marketers need to take steps to implement Big Data into their marketing strategy now, or risk falling behind those that do.