understand and embrace big data
This is the fourth of five thoughts addressing tends in marketing that all marketers need to understand, and many will need to embrace sooner rather than later.
There is a lot of talk these days about so called ‘big data’. Yes, it is irritating jargon, but big data offers enormous opportunities to reduce costs and increase returns. It is certainly more likely to increase the return on your investment in marketing than intuition will ever do.
Recent research in the United States found that 50% of business executives believe that big data has fundamentally changed their businesses. Further, the growth rate in business expenditure on software designed to collect and process big data is growing at a rate of 10.48% per annum – from $42 billion in 2018 to $103 billion in 2017.
McKinsey Analytics asked business executives why they were using big data. Their research identified three major drivers:
- Decreasing expenses – 49.2%
- Identifying innovations – 44.3%
- Identifying new products – 36.1%
There is no doubt that big data can help with all three. It can also assist with – tailoring the customer experience, improving customer service, and determining an optimal pricing strategy.
‘Big data’ whilst a grandiose expression, essentially refers to information about – volume, variety, and velocity – who is buying how much of what, how frequently, and in what number? It involves the collection, processing, and analysing of customer data such that all aspects of marketing can be changed to better address customer needs.
Keys to maximising the value of big data include:
- Clearly identify the decisions to be addressed
- Design an efficient system for data gathering
- Identify the critical data and only consider that data
- Obtain clean, accurate, and timely data that has credibility
- Access the technology required to efficiently process the data
- Access the expertise required to analyse the data
- Employ complete objectivity in interpretation of the data
- Continually revise the model to suit circumstances
- Think long term and provide for longer term decision making
- Start small and simple and then develop over time
The critical point here is that big data is required if a business is to be truly customer focused. Indeed, it is the secret to the success of businesses such as Amazon, Apple, Google, and Facebook. Further, these businesses have become as big and powerful as they are because they have prioritised big data since the day they were one man shows.
You may be wary of big data, but the time to embrace it is now, if you have not already done so. Start small.
In 2018, understand and embrace big data
Every year – put the facts ahead of intuition and guesswork.
Sources of core statistics – McKinsey Analytics, Hubspot, Statistica, Forbes, Venture Harbour, Debumi, IFP and Ironpaper Insights.
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