During the recent National Retail Federation Conference in New York City businesses both large and small were focusing on how to make big data translate into increased profits. Trend lines are clear. Businesses with systems in place to identify and implement marketing plans from key data sources will see sales increase by an average of 15% over companies in the same segment. This means, with an economy growing at less than 3% annually, they are not just finding new customers; they are taking customers away from competition. They are gaining critical market share.
An astonishing trend from big data analytics is how quickly marketing and management decisions change. Instead of a 12-month campaign-planning horizon, count on adjusting plans every three months. This applies to every business type, not just fashion and food. In a business as stable as home improvement and hardware, big data drive ad campaigns on a month-to-month basis.
Big Data helps business drill down to the ultimate objective, “The Segment of One.” Every time a customer or potential customer has an experience, (you are not still thinking customer service are you?) with your company through a website or in person purchase, big data can simultaneously direct that customer toward more products and services. But here’s the kicker. Big data application offers suggestions and ideas not just on what you are promoting this month, but what the customer may anticipate they will need next month. And how do you anticipate customer needs? By mining Big Data of course.
Here is a real world example. Cruise ships now give passengers the option of wearing a bracelet that lets the ships computer know almost everything you do while onboard. This is done to anticipate passenger’s needs. If they go to the gym for an hour then offer an appointment for a massage. If they do the midnight buffet, then let them know the pharmacy is open 24 hours. If they sign up for a port of call archeological tour, then let them know about the next cruise offering more of the same.
But of course some of our customers will not let us put ankle bracelets on them. In this case, we have to build our own process in which to collect data and anticipate needs of our customers. The more sources of data you can use to collect data then the higher success rate you will have with your marketing efforts. In fact, if you have three independent sources of data (referred to as triangulation) pointing to the same product of service, then your chances of successful marketing are extremely high.
Remember, Big Data’s ultimate objective is to identify and anticipate customer needs. Big business have large departments with Data Scientists and Business analysts pouring over mountains of data. Small business owners have much data in house too. On line software packages combines your existing data with other key databases to identify and project customer-purchasing trends. However, most small business already have the most important component of data analysis and that is a close relationship with your customers. Combining some knowledge of big data analytics and applying it to your existing customer relationships will keep you competitive and protect if not expand your market share. For more information about transformational business practices contact your local Small Business Development Center.
Written by: Steve Newton, UGA SBDC Business Consultant