We have all seen and heard the term “big data” used in the media, by our business partners, by our co-workers, etc. Chances are, if you ask 10 people what “big data” means to them, you will get 10 different answers. In many ways “big data” has become a buzzword that people love to mention, but find difficult to define. As marketers, it is important that we have some level of understanding of “big data,” and how it can enhance our efforts.
I recently heard a description of big data that resonated with me, in large part because it dovetailed with a description I was already using, but was much more definitive. The description came from Bill Franks, the Chief Analytics Officer for the International Institute of Analytics. His description was “processing that took months 10 years ago, and hours 5 years ago now is done in under 1 minute.” I think this description is both simple and brilliant. So not only is data in greater abundance and more readily available than ever before, but the tools used to organize and process the data are more powerful and finely honed than ever before. This applies to data processing software, as well as the computers that run the software.
When you peel this onion back a bit further, 2 major benefits of big data are deeper understanding and additional opportunity. The means and the opportunities are within our reach. It is our responsibility to understand, define and capitalize on the opportunities. While this process is easily defined, the execution can sometimes be more complex. Many times there is so much data available, you don’t know where to begin. You may have heard the phrase “it’s like trying to take a sip of water from a firehose.” This is a very appropriate description if you are just beginning to dive into data and analytics. You can easily get lost in mountains of data.
Early in my experience of working with big data, I made the mistake of essentially asking 2 analysts to “tell me something interesting about our customers.” I received blank (and not very nice) stares. They had no idea how to process that request, as it was vague and undefined. In essence, they had no idea where to start with that one. In fairly short order, I came to understand that you need a plan of action. Define a problem you want to solve, or an issue you want to address. Next, develop a hypothesis that you will test as you work your way through the data. This approach provides an anchor and a starting point, and helps define the search parameters. If your hypothesis turns out to be invalid (and this will happen from time to time), don’t worry. Build on what you have learned to that point, and move forward.
So what can big data do for you? Common applications for marketers include increasing revenue, reducing costs and enhancing the customer experience. For example, one client we work with runs a restaurant e-commerce site. After a basic customer segmentation and market basket analysis, we identified 3 distinct customer segments based on purchase behavior. We then sent segmented offers via email to each group. When compared to a historically strong offer:
- Email open rate more than doubled
- Click rate increased 5x
- Revenue doubled
In another instance, we assumed responsibility for a residential weatherization program that a utility industry client had previously been managing themselves, but were unhappy with the results. We analyzed the customers who had participated to that point, and also analyzed customers who had been offered the program but did not participate. We then modeled each group, and went on the hunt for more prospects who fit the profile of a participant. Along with some minor tweaks to the creative, which allowed for an A/B test, we were able to increase the take rate by 3x.
Through deeper understanding of our customers and our business in general, we can uncover opportunities for growth, greater efficiency, increased customer satisfaction, etc. There can be many obstacles in your path. Sometimes just getting access to the necessary data can be a challenge. You have to persevere, as the benefits are worth it.
Big data can be the bridge to a better place – sales growth, better understanding of our customers, increased customer satisfaction, better messaging, better targeting of our marketing efforts, etc. Embrace the data, and utilize it in ways that make sense for your business. You’ll be glad you did.