I recently had had a candid conversation with the DGM (Marketing) of an established Indian cement company few days ago. He told me that to be successful in marketing and sales, you need to have the “mapping” skills. Puzzled by this term, I requested him to elaborate on this. His advice was that in order to understand a customer, one should fully analyze the customer’s needs, capacity and preferences before approaching him for a deal. This would give us a huge edge over the competitor. So wouldn’t mapping be largely beneficial for us if we can extend it to competitors, markets and the public apart from our usual customers? Indeed.
For many companies, maintaining database of such sorts is a herculean task. Even if it is there up to date, gaining insights from it to make meaningful decisions is not that easy. And considering the number of customers/competitors and the amount of data they generate every day, data driven decisions are not easily decided upon.
Think about customer data businesses collected fifteen years ago- Point of Sale transaction data, coupon redemption and responses to direct mail campaigns. Now think about the customer data collected today- Click through rates, Browsing behavior, cookies, social media interaction and geo-location data. How do you manage all this?
In comes the Big Data, the boom of the decade. Increasing storage capabilities, faster processors and easy availability of data- all together support a level of decision making that is more accurate and timely than anything previously attempted – big-data-driven decision making. Because marketing decisions are increasingly becoming data driven, big data is here to stay. It is complemented all the more by internet.
In the year 2012 alone, Internet users generated 4 Exabytes (4 x 1018 bytes) of data, served by more than one billion computers and one billion smartphones. In parallel with growing penetration levels, the average time users spend online is also growing constantly. In the US, usage has risen from an average of ~5.2 hours a week in 2001 to ~19.5 hours in 2012!
Think of the untapped information out there in the open.
The reason for the internet helping big data grow is because of its unmatched role as a gold mine of customer intelligence. Consumers devote hours every day on the internet and leave behind large amounts of information about who they are and what they seek. Their daily visits reveal their online interests, the opinion of their communications, the purchases they do, and so on. While these consumer actions signal to what goes on in the real world; on the internet, this data can be collected, recorded, and analyzed. This opens the gate for the use of big data and advanced analytics.
But big data alone won’t help you do better marketing. It is not only the data and its processing that is important. Rather, it’s the insights and findings derived from big data; and the decisions that are made using them. That makes all the difference.
By combining big data with a marketing management strategy, organizations can make a substantial impact in these key areas:
- Customer engagement- Getting to know the customers well and engage them
- Customer retention and loyalty- Know the influencers that affect a customer’s preferences to make them loyal to you
- Marketing optimization- Do optimal marketing spending across multiple channels (though Multi-Touch attribution is still in a nascent stage), as well as continuously optimize marketing programs through testing and analysis
The last point brings out an important link between marketing actions and results. For years, marketers couldn’t prove their decisions with the numbers. Data enables them now. Not only does data enable marketers to be more effective and efficient, but it provides them the platform to be able to prove it.
But there are quite a few challenges related to the effective use of big data for marketing. That is because most analytic systems are not aligned to the marketing data, processes and decisions. The following seem to be the main challenges for marketers now:
- Knowing what data to gather- Data, data everywhere. More is not manifestly better. It has to be the right data
- Knowing the tools to analyze- Right tools can help you aggregate and analyze data aptly, depending on its size, characteristics and your end objective. Sometimes, even spreadsheets are good enough
- How to reach impact from insights- How do you generate insights? How do you use them to make good decisions?
To overcome these barriers, marketers can take the following approach:
- Strategy first, data next- The use of data needs to sync up with the corporation’s strategies. Start thinking about data in the context of a specific strategy of your firm
- Deliver consistently- Have a big vision, but deliver meaningful results regularly
- Develop resources- Decision scientists do exist! Data analysts are not enough; people should also have the skill to connect your insights to your business. I worked in an analytical firm where generating insights was not enough. Assessing the recommendations, impacts were also calculated and delivered to the client.
Advertising prowess isn’t enough, it is incumbent on the marketers to take the lead in leveraging big data. Adapt and thou shalt be successful!