In a famous study conducted over the course of 20 years, political science writer and professor Philip E. Tetlock discovered that when it comes to intuition, the results are about as accurate as flipping a coin.Although his research is quite fascinating, it’s a dagger blow for marketers who like to work off that hunch or ‘gut feeling’. In marketing, intuition has always been treated with a dose of healthy scepticism. And that’s become especially true in our digital world, when just about everything customers do can be tracked and analysed.
The result is ‘Big Data’, the term given to the copious amounts of information that reveals trends and patterns in customer behaviour that can inform highly targeted and personalised marketing strategies.
This week we explore the emergence of Big Data, and how it makes marketing magic out of maths.
The Age of Big Data Has Arrived
I’m the first to admit that ‘Big Data’ is one of the industry’s latest buzz terms. Seems everyone is talking about it, studying it and analysing it. But what exactly does it mean? And how does it differ from just regular data?
Angela Stringfellow from NGDATA says that big data is essentially the accepted term for the myriad of new information marketers can now gather that reveals insight into customers, ranging from transactions to web visits. Whereas we once only had surveys and anecdotes, we now have reams of real time information at our fingertips.
“Big data refers to the massive amounts of data that businesses typically collect from their own business processes and from their customers through different means,” she says.
“When leveraged intelligently, big data can reveal incredibly useful trends and patterns that can lead to huge improvements in a company’s various business strategies, including but not limited to, its marketing strategy.”
Big Data In Action
In a relatively short time, Big Data has spawned its own industry. Companies offering Big Data collection and analysis are sprouting up worldwide, and they’re thriving. That’s because companies recognise that big data reveals powerful insights about customers that can transform the way you market to them.
Last month Forbes reported that the Royal Bank of Scotland had amassed a staggering 800-person strong analytics department, all charged with the task of combing data that can eventually be used to help them restore the disconnect that’s developed between customers and banks, informing a strategy that will ultimately lead to a better customer experience.
Data gurus SAS revealed that Verizon Wireless has partnered with NBA team the Phoenix Suns to use fans’ phone data to reveal where people attending the team’s games live, what percentage of game attendees are from out of town, and if they visit nearby fast food chains for dinner. Such insights are invaluable to the Suns’ advertising and promotions efforts.
Meanwhile, Wal-Mart has added ‘semantic search’ capabilities to its website, offering customers relevant search results while shopping online. The number of shoppers completing an online purchase has grown by 10-15% since the semantic search was introduced.
The Marketing Benefits Of Big Data
Customer engagement: Big Data offers insights into who your customers are, where they are, what they want, how they want to be contacted and when.
Customer retention and loyalty: Discover what influences customer loyalty and what entices them to keep coming back to your business.
Marketing optimisation and efficiency: Big Data reveals pattern and trends that reveal marketing tactics that work, and those that don’t. Because Big Data is based on testing, measurement and analysis, it helps you be more precise with the money and resources you allocate to certain marketing tactics and invest in the strategies that work.
Developing new products and services: With a wealth of information about customers habits, behaviours and preferences, companies can develop new products and services targeted to specific segments of their customer base and meet needs that were previously unidentified.
Improve business processes: Big Data delivers information that is applicable across your company, from front line staff, call centre representatives, CMOs and the C-Suite. This information allows you to make improvements at every level of your business to make it more efficient and responsive to the specific needs of your customers.