According to Google Trends, in 2011, the hype of big data had just begun. In 2015, the hype still exists, yet big data has evolved beyond hype! Companies are using big data to turn a profit in real practical ways. Even companies in different industries, such as retail and manufacturing, are using big data to grow revenue. Big data projects do have reported ROI and positive outcomes, especially for sales and marketing purposes.
Big Data is a Big Deal
Big data is growing at an exponential rate. At least 3 billion people are online, 247 billion emails are sent each day, and 8 zettabytes of data will be created in 2015.[1] In fact, 90% of the world’s data was created just in the last two years.[2] Big data is a big deal. If you do an exact google news search for the term, “Big Data,” you will come up with at least 8 million results! That’s not to mention the nearly 54 million results you will get from doing a regular google search.
Why is Big Data a Big Deal
We recently created a LinkedIn group, called “Big Data for Marketers.” This group will serve as a group for professionals, not only limited to marketers, to discuss the latest trends, their opinions, experiences and insights, on big data [in the context of marketing.] Many people wonder, first of all, “How is big data even used (not to mention in marketing)?” Of course, the main uses of big data will vary from industry to industry; however there are common reasons why companies use big data. According to KPMG, four of the top reasons include: to identify insights that would other have been missed, analyze with greater speed, gain more sophisticated / granular insights, and save costs due to improved efficiency. [3]
[Click the image to view the LinkedIn group: “Big Data for Marketers.”]
For instance, here are two examples of how different industries are practically using big data:
How Manufacturers Are Using Big Data
Compared to two years ago, 90% of manufacturing companies, for instance, are collecting and managing more business information. In fact, even the amount of information they are collecting and managing has increased.[4] The leading area manufacturers are using big data is, surprisingly, in sales and marketing. A few ways manufacturers are using big data include: to make strategic decisions, forecast trends in customer buying behavior, and better plan new products and anticipate industry changes.
Vehicle Manufacturer Use Case
In 2013, we started working with an international vehicle manufacturer in a big data project. The goal was to help them shift from a vehicle-centric marketing strategy to a customer-centric model. One of their core problems was inaccurate and incomplete data which prevented them from clearly defining and understanding their customers. The negative results of this problem included important client relationships being damaged and market growth being hindered. Among other things, we helped this manufacturer establish a 360 degree customer view and provide market intelligence to its dealerships. Consequently, this manufacturer was able to successfully run marketing campaigns and equip its dealers with vital information on prospects and customers.
How Retailers Are Using Big Data
Some of the leading ways retailers are using big data include: improving the cross-channel customer experience, leveraging customer information to create personalized offers/campaigns, and creating new offers and campaigns consistently across channels. On a similar note though, retailers are using big data to understand their customers and “paint” a 360-degree view of each type of prospective customer.
Macy’s Big Data Use Case
Macy’s, for example, worked alongside IBM to provide a 360 degree view of their customers. Macy’s wanted to “focus on each customer” as the company expanded. Not a bad marketing strategy. By integrating all of their data “touch points,” i.e. online forms, P.O.S., social media, Macy’s was able to create a more personalized shopping experience, plus offer specific shoppers tailored pricing and promotions. In fact, this strategy led to a 19.6% growth in online sales for the 2009 fiscal period![5]
The ROI of Big Data Marketing Campaigns
Marketers are increasingly under pressure to justify the effectiveness of their campaigns by proving ROI. In fact, 72% of CEOs report that marketers are asking for more funding but cannot explain what return this will have for the company. [6] Big data gives value to companies in two major ways: savings and growth. According to an Experian report, the average company loses 12% of its revenue due to its own data being bad.[7] This could mean the data is incomplete, wrong, or a duplicate record. When a marketer sends a direct mail campaign to a prospective list and 25% of the list is to wrong addresses, marketers are wasting marketing spend.
Research on the direct ROI of big data is still emerging; but there is ample research on the ROI of effective campaigns big data enables marketers to run. For instance, with a 360 degree view of a company’s customers and prospects, marketers can run email and direct mail campaigns with personalization and segmentation strategies. According to ConversantMedia, personalized media programs such as email campaigns have 56% better response rates and lead to 55% increased sales.[8] In addition, companies with access to their data can identify cross-sell and up-sell opportunities by sending targeted offers to customers who are frequent buyers and recently purchased a specific product.
“Big Data for Marketers” was created to answer the common questions marketers have concerning big data, including the harder questions big data poses to marketers. The group will be an open forum, and even community, for marketers to build upon their understanding of big data in the context of marketing. Join in the conversation! Click here to join, “Big Data for Marketers.”
[3] http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/going-beyond-data-and-analytics-v4.pdf
[5] http://www-01.ibm.com/common/ssi/cgi-bin/ssialias?subtype=AB&infotype=PM&appname=SNDE_OD_OD_USEN&htmlfid=ODC03172USEN&attachment=ODC03172USEN.PDF#loaded