A successful marketing strategy is based on an accurate customer profile. Hence, marketers are always attempting to capture even the minutest details about their customers. A complete customer profile helps companies to design and improve their products and services in a way that best suits their customers’ needs.
Traditionally, business managers have relied on marketing research, customer surveys, CRM systems and feedback forms to gather data on consumer behavior. However, the internet growth, proliferation of social media and the use of smart sensors in consumer devices have all opened up a large number of digital channels that can offer valuable information about customers.
The Growing Importance of Big Data
Today, the massive explosion of data sources is already taken into consideration for building a complete customer profile. Companies are spending huge budgets on implementing big data tools that offer valuable insights on consumer behavior. According to International Data Corporation (IDC), worldwide expenditure on big data and business analytics (BDA) is poised to hit the $187 billion mark in 2019.
However, it is important to note that big data not only helps to improve marketing efficiency but also helps to enhance the value delivered to customers. The big data obtained from various structured and unstructured data sources promises to enrich customer experience and increase customer loyalty.
Big Data: More than Customer Insight
Today, customization is regarded as a great value-adding strategy, and big data will be playing a key role in driving it. Marketers can obtain comprehensive consumer data in real-time and use it to customize their offerings per individual customer needs. Every customer desires personalized attention, and big data provides the much-needed opportunity to marketers for connecting with their customers one-to-one.
The need of the hour is to use consumer data for delivering customer benefits rather than merely increasing profits. Delivering value-added services ensures long-lasting customer relationships and increased customer loyalty. The loyalty, in its turn, helps businesses to achieve sustainability in the age of appalling competition.
Adding Value with Big Data
Marketers heavily rely on big data to reduce the costs associated with their market offerings. It is important to realize that the price of the product is not the only cost incurred by the customer. There are a multitude of other costs like purchase, usage and post-usage costs that affect the overall customer experience. Even before they buy the product, customers are often seen spending their resources on searching for the right products and services in the marketplace.
In such a scenario, it is a good strategy to deliver value by reducing a customer’s cost of inconvenience and save valuable time at the search stage. This type of value addition is actively exploited by online vendors such as Amazon and Netflix who use big data to accurately recommend products and services that will appeal to their customers. According to eMarketer, 55% of American internet users ranked Amazon as the best online platform for personalized customer experience.
Realizing Value by Eliminating Risk
There are companies like TripAdvisor who reduce the cost of risk by listing the quality ratings of various hospitality and tourism service providers. Aggregating diverse data sources will enable companies to help their customers not only to select the right products but also to pick the right combination of products.
For example, a company specializing in agricultural products can correlate data related to soil, crops, climate, plot sizes, farmer types and environment to come up with optimal combinations of seeds and fertilizers. This empowers farmers to buy the right combination of agricultural inputs that are most suitable for their particular farms.
Big Data for Higher Customer Satisfaction
Big Data has helped online retailers to get a 360° view of their customers by integrating their transaction data with browsing data. Such data insights help marketers to improve overall customer satisfaction by identifying the pain points that affect the shopping experience.
For example, big data analytics and dashboards enable businesses to identify and eliminate server issues that are often responsible for shopping cart abandonment. In addition, fashion retailers can analyze shopping habits to understand interests and aspirations of different customer segments. By accurately predicting trends, designers can match their products to their customers’ desires and thereby improve the level of customer satisfaction.
A case study: General Motors’s Big Data initiative
It is clear that value-added services can be delivered by aggregating widely dispersed customer information to reduce the costs and risks of these services. General Motors (GM) has set a good example by harnessing the power of Big Data to help their customers maintain the health of their vehicles and eliminate the risk of a sudden vehicle breakdown.
In order to deliver the promise of Big Data, GM has implemented a sophisticated Vehicle Health Management (VHM) that uses wireless technologies to collect large amounts of data from different electronic sources within the vehicle. The sophisticated system analyses the complex data to predict future failures on the basis of the abnormalities detected. For example, early rectification of an abnormality found in a starting system will definitely eliminate the problems and inconvenience caused due to a dead battery. GM’s big data system then sends out subscription-based alerts to customers for taking necessary corrective actions.
Big Data to Ensure Customer Safety
Apart from gathering insights about the on-field vehicle performance, GM’s VHM correlates sophisticated data with their customer records to prepare safety reports regarding a customer’s driving habits. Customers can access these online reports to obtain customized guidelines for improving their driving habits. Simultaneously, GM uses the data to introduce further enhancements in its systems for offering improved products and services. GM’s pioneering initiative to harness the power of big data has had a profound impact on the customer’s lifetime value.
The Road Ahead
According to the study by IDC, the datasphere will continue to expand, and about 20% of the entire data universe in 2025 will comprise of critical data. By realizing the growing potential of big data, more enterprises will be able to enrich customer experience. However, the power of big data can only be truly utilized if there are proper enablers to facilitate the aggregation and utilization of dispersed customer data.
It is important to deploy a well-planned data framework along with data curation to break down the organizational silos that separate data sources. Data that resides in organizational silos is useless if it cannot be easily combined with other datasets within and outside the organization. Finally, organizations will need to put the right people and policies in place so that their customers can take advantage of big data.