Article

Tapping big data to improve the customer experience

We will have 40 trillion gigabytes of data by 2020. What are we going to do with it?

January 22, 2014

By Jeff Sippel

Chief Technology Officer, edo interactive

We have a 40 trillion gigabyte problem. As a 2012 IDC study revealed, the universe of Big Data will double every two years and reach 40 trillion gigabytes by 2020. As much as 33 percent of this data will contain valuable information, but only if we're able to analyze it.

The sheer amount of data is just one reason why companies today are having such a hard time extracting the right data for analysis. Recently, Monetate found that 95 percent of data within organizations remains untapped. Particularly with large organizations, so much of the available data is siloed — it's there, but it might as well be on the far side of the moon.

The Monetate survey also reports that 39 percent of marketers say they can't turn their data into actionable insight. Data analytics is a painstaking process that all too many organizations are simply putting off for another day.

A problem that’s worth having

That said, Big Data's value to marketers and brands whose goal is to improve the way they connect to the consumer is unprecedented: Companies that invested in data analytics reported a 49 percent increase in revenue growth compared to those that did not. And 35 percent of marketers say that data has improved customer engagement through personalization.

Whether organizations are prepared or not, Big Data is our future.

Using Big Data to get personal

Traditionally, marketers did their best to target customers by putting out messages or deals that would be generally appealing to a majority of its consumers. The irony of Big Data is that the information explosion has allowed us to connect with customers on an acutely personal level.

Let’s just take one obvious example: coupons. Five years ago, a company develops a coupon and emails it out to its customer opt-in list. Given the customer information they had available, the marketing team did its best to make that coupon as appealing as possible to as many people as possible — in other words, to its typical, average customer. The downside of this approach is that very few customers are truly average, and as such you are missing that big chunk of your customer base.

But it doesn't have to be this way anymore. Big Data allows us to analyze and understand consumer behavior on an individual level. In an ideal world, this means designing 10,000 different coupons for the 10,000 customers in your loyalty program. With the right data, marketers can stop trying to shape consumer behavior and instead align themselves with it.

Making the most of your data

Companies who want to implement data-driven campaigns should start with this goal: find a way to use the data you already have to help interact with your customers on a personal level. Before they can accomplish that goal, there are a few things to understand:

There is no such thing as bad data:Too many organizations view their untapped data as if they have to prove its value before they start storing and analyzing it. This is the wrong way to look at Big Data. Often, data only becomes valuable when you can store a lot of it, and combine it with other sources.

So many details are available:Has your consumer opened an email containing a coupon? What time of day do they view it? Do they tend to open and redeem offers in a specific product group? Do they like viewing emails on their desktop or on-the-go? Do they have your mobile app installed? In a silo, each of these data points may not be valuable, but together they can help you craft smarter marketing that will engage customers in the channels, times and formats they're most comfortable.

Find the right people:One of the biggest obstacles keeping most organizations from their Big Data potential is simply a lack of the right scientists and analysts who can exploit it. The good news is that there are more and more of these professionals every day. Go get them. They key is finding people who can both describe the business problem and wrangle the data in a way to find an answer. Often this means finding someone with skills on one side but passion on the other — and recent college graduates are particularly adept at learning to bridge this divide.

Customers are ready: 2013 saw smartphone adaption eclipse dummy devices, and mobile activity across web, email, and entertainment usage continues to increase. Marketers need to shift their thinking, as omnichannel approaches will continue to be required to reach the best customers. The winners of 2014 will be able to understand and support their consumers to adapt to their needs and channels.

Big Data brings organizations a great opportunity to better relate to customers. But it will take a data-focused team to navigate through the overwhelming snowball of data to focus on creating programs tailored to specific customer behavior. There's no better time than now to begin shifting to data-driven communications for your customers.

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