Introduction to Big Data
The voluminous amount of data from online business transactions, search engine and social media activity has created large storehouses of highly detailed consumer data. The data contains useful marketing information such as what websites a user visits, how long he stays on that site, what types of products and services he purchases online, when he is online, the product reviews he reads and what he searches for. This massive amount of aggregated information, is generally what computer and marketing analysts refer to as big data.
Big Data as a Marketing Tool
The power of tapping into big data as a marketing tool is still in the early phases of adoption. Several challenges exist with implementing it as a feed into marketing campaigns including available tools, expertise, and problem associated with working with the raw data formats from their wide range of sources.
Fortunately, these barriers are being cleared daily and firms are discovering the huge potential in applying big data as a marketing tool.
In this article we discuss 5 ways that companies are making use of big data to increase sales, customer retention and market expansion.
Ideal Customer Profile
Ideal customer profile (ICP) refers to the demographic sweet spot of the users of a business' products and services. Obtaining this information has been challenging because the pieces which tie together to create the metric are often times very widely dispersed.
In a successful big data marketing effort, Avis car rentals was able to use big data extraction techniques to discover areas in which their engagement with prospects needed to be strengthened, to improve their social media marketing and to target an age range that their competitors had a weak presence in. Ultimately this resulted in a 30 percent success rate increase in their internal customer contact strategy baseline.
Evaluate Marketing Campaign Success
Most online marketing campaigns require high amounts of effort to create and maintain engaging and fresh web content. After the campaign is up and running and with so many intervening factors that can affect online sales, it can be nearly impossible to trace a successful tactic back its original source.
Content scoring technology merged with big data techniques yields highly valuable information in the form of very granular result sets revealing the results of individual aspects of online marketing campaigns that can provide marketing professionals with this information.
Increase Customer Retention
The lifetime value of a customer includes how much that customer will spend added to the value of their referrals. This includes their tendencies to increase the size of their purchases, and higher loyalty and spending habits of those they refer. Marketing to acquire a new customer can cost several times above the profits of a lost customer. Because of this high expense, it is a business priority to retain customers for as long as possible.
Big data can provide firms with knowledge about their customers interests, habits and spending trends, allowing them to target these customers with personalized campaign efforts and value adding incentives, resulting in higher retention rates.
Locate Untapped Markets
Big data enables marketing professionals to mine large and otherwise unmanageable data sets to find new market segments based upon real time customer online activities which relate to their core business offerings. Conversion and web page bounce rates can be compared with demographic and sales data to better understand what prospects' actual needs are how they can be met through online sales strategies.
The ability to know in advance with a high degree of certainty how a group will respond to a marketing campaign is the panacea of every marketing discipline.
Tools that combine big data with traditional in house marketing models to study marketing campaign successes are producing both higher returns on and lower costs of customer acquisition investments.
Predictive lead scoring is returning as high as 250 percent ROI, a figure recognizably higher than traditional campaign strategies.
Every business can benefit from integrating big data into their marketing campaigns. The large range of benefits to businesses include:
- Identifying new marketing opportunities
- Higher customer retention and conversion rates
- Identifying successful campaign tactics
- Improving ICP identification
- Understanding how a campaign will perform before it is launched