As we gear up for our 2012 Customer and Marketing Analytics Summit this week in San Francisco, here is a post by guest blogger Jason Rushin on a topic which is getting a lot of attention, and causing a lot of pain and confusion, for marketers and other line-of-business professionals involved in building customer loyalty.
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“Big Data” is the latest technology term to reach the height of over-use. Besides being promoted by a multitude of vendors and tech publications, it’s even being covered in mainstream publications such as Forbes and the Wall Street Journal. Heck, even National Public Radio’s Morning Edition had a recent segment on big data! All of this attention and the associated claims for how it will change the world have brought some justified scrutiny – Gartner’s most recent Hype Cycle for Emerging Technologies has it entering the “peak of inflated expectations”.
So, is it all just hype? From a business-to-consumer perspective, should marketers be concerned with big data? And what even is “big data?”
Let’s answer that last question first. Big data, according to wikipedia, is simply defined as “a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools.” Basically, it means that, as a marketer, your collection of customer, transaction, revenue, web, email, and other data becomes too big and diverse for your current tools to handle.
TODAY’S DATA IS INHERENTLY “BIG”
In this era of digital everything, nearly every marketer has access to more data than they can reasonably handle. A single web visit by a single customer can result in thousands of data points across items viewed, locations, durations, browser, referral, clickstream, frequency, etc. Couple that with device, payment methods, demographic data, product attributes, not to mention data across your other channels, and any retailer is quickly drowning in data.
If you’re a typical marketer and you use Excel as your day-to-day data analytics tool, you’re either already overwhelmed or you have to summarize data to a level which eliminates any ability to act upon the details that are contained in it. If you have marketing automation and CRM tools, you can do some analysis, but it’s a struggle to connect your different data sources and there’s limited ability to dig out insights and then act on them with targeted campaigns aimed at specific customers.
This is where the big data hype meets the big data reality: While big data is a real challenge for marketers, your ability to act on your data is what really matters. Your big data might be a few million data points across a few databases, while a mega-retailer’s big data might be a few hundred billion data points across dozens of systems and data sources. Either way, it’s a roadblock to your effectiveness.
FROM ANALYSIS TO EXECUTION
Your first step with handling big data is addressing the challenge of deeply understanding your customers. Marketers need solutions that can bring together multiple data sources and answers questions such as:
- How can you logically group and assess your overall customer base?
- What makes different customers valuable or expensive, loyal or not?
- Which customers do you need to focus on to improve retention, increase purchase frequency or maximize order value?
- Which customers provide the blueprint for the type of new customers you want to acquire?
Furthermore, you need the ability to take those insights and turn them into action. Having a great insight is worth little if you can’t turn it into a marketing campaign or you can’t specifically target those customers who exhibit those behaviors.
TAKING THE NEXT STEP
Big data may be an over-used and hyped-up term, but that doesn’t make the concept any less relevant. It just forces marketers to be more careful when choosing how to leverage the wealth of data that exists. Taking that initial step of pulling data together, assessing your customers at several levels of detail, and acting upon your first set of insights is where marketers should begin. From there, you can collect results and begin to use these to refine campaigns and determine the best follow-up customer interactions.
Those complex, IT-focused, big data technologies that talk about their benefits in “feeds and speeds” as opposed to business value are ones to avoid. Unless, of course, you’re ready to hire a few PhDs, get IT involved, and wait months for your first insight to be available.
Instead, look for a solution that’s focused on rapidly providing business-level insights, can be used directly by marketers, and can feed those insights to your marketing automation system.
References:
- Gartner Hype Cycle definition
- “Gartner: Big Data, Smart Devices, Cloud Computing, Maturing As Technologies, BOYD Rises” (CMS Wire, Aug 17, 2012)
- “5 Ways ‘Big Data’ Is Changing the World” (Entrepreneur.com, Oct 7, 2012)
- “Stay Close to Clients With ‘Big Data‘” (Wall Street Journal online, Oct 19, 2012)
- “Predicting The Future: Fantasy Or A Good Algorithm?” (NPR.org, Oct 8, 2012)
- “Marketers Continue To Struggle With Big Data” (Forbes.com, Oct 5, 2012)
- Definition of Big Data (wikipedia.com)
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Jason Rushin is an independent consultant with over 15 years of software technology marketing, product management and business development experience. Jason has his own blog at www.13plymouth.com and tweets using the handle @jrushin.
