Last month I took part in a panel discussion in Chicago on the topic of Big Data and how it drives customer engagement. The moderator, Erik Severinghaus, founder of SimpleRelevance, added his thoughts about the panel and what Big Data means for small business in this space a few days ago. Today I wanted to look at Big Data from a different angle; specifically, how Big Data allows companies like edo to go from “average best” customer solutions to “specific best.”
I’ll explain what I mean by that shortly.
A 40 Trillion Gigabyte Problem…
But first, it’s important to remind ourselves about the enormity of the task at hand. Indeed, as a 2012 International Data Corporation study revealed, the universe of Big Data will double every two years and reach 40 trillion gigabytes by 2020. Just like our physical universe, we’re only able to reach the tiniest fraction of it. IDC estimates that by 2020 as much as 33 percent of those 40 trillion gigabytes 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. For instance, a recent survey from 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 for all the good it’s doing.
Even once the data is accessed, there remains the problem of what to do with it. The Monetate survey 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.
…That’s Worth Having
That said, Big Data’s value to our efforts as marketers and brands whose goal is to improve the way we connect to the consumer is unprecedented. The Monetate survey underscores this rather important point:
Companies that invested in data analytics reported a 49 percent increase in revenue growth compared to those that did not.
Those same companies also reported a 30 percent higher ROI than companies that did not invest in analytics.
35 percent of marketers say that data has improved customer engagement through personalization.
Whether organizations are prepared or not, Big Data is our future.
From Average to Specific
Which brings me to my original point: As Big Data champions, our goal at edo is to complete the shift from “average best” customer solutions to “specific best.” 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 prints a coupon and emails it out to its customer opt-in list. Given the customer information they had at the time, the marketing team did its best to make that coupon as appealing as possible to the most customers – in other words, to its typical, average customer.
The downside of this approach is that you are knowingly ignoring a big chunk of your customer base. But not anymore. Big Data allows us to analyze and understand consumer behavior on an individual level. In an ideal world, this means we can design 10,000 different coupons for the 10,000 customers on our email list (or, more likely, mobile app).
Furthermore, we as marketers can stop trying to shape consumer behavior; instead, we can align with consumer behavior. So, rather than send a morning coupon to a customer, we send that coupon when we know that our customer will be in a specific location at a specific time. The former method has the customer modify his behavior to match the coupon’s offer; the latter modifies the offer to match the consumer’s behavior.
That’s what I mean by shifting from “average best” to “specific best.” It is a 1-to-1 interaction between the brand and the consumer.
Getting to Specific Best
At edo, this is our goal: To design a system that allows our companies to interact with their customers on a personal level. But for most of the industry, we’re far away from realizing that goal. At the panel, I mentioned a few things that still need to happen in a general sense:
There is no such thing as bad data: Too many organizations view their untapped pile of data as if they had to find the diamond in the rough. This is the wrong way to look at Big Data. Every bit of information is valuable, if you’re asking the right questions.
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.
Paradigm shift: In the end, there needs to be a paradigm shift throughout the industry in how we view customer interactions. As Mary Meeker found last year, consumers spend 10 percent of media time on mobile devices, but mobile ad sales only account for 1 percent of total ad spend. There’s still a disconnect between consumer behavior and marketing awareness.