Data – and lots of it – is perhaps the single most important consequence of the shift from analogue marketing to digital marketing over the past 20 years. Marketers today have a wealth of data, much of it real-time or near real-time at their fingertips – including their own CRM, web analytics, ad tracking, and transactional data as well as external data sources such as social media, government databases, 3rd party data sources and market research.
Sure, marketers have always used information such as point of sale transactions, market research, and direct mail responses to inform their decision-making, but today, they have unprecedented quantities of data to draw on to shape their campaigns. It’s not just the volume of data that makes it such a challenge and opportunity for marketers. It’s also the variety of the data – structured and unstructured data from internal and external sources – as well as its velocity – the rapid pace at which data is being created.
Faced with this deluge, CMOs need to think more about how they will put the data to work and less about the underlying technologies. Here are a few of the ways that big data can be leveraged to drive real business outcomes:
More intelligent and granular customer segmentation
Marketers can look for patterns in data that can help them to refine their customer segmentation strategies so that they can deliver more personalised experiences to consumers. With rich data about customers’ behaviour and spending patterns, they can create sophisticated messaging and offers that are highly relevant to granular and profitable market segments.
They can also understand what keeps customers from different segments coming back for more, and ensure they give customers what they want, when they want it.
Because companies such as airlines, retailers and hotels operate on razor-thin margins and serve price-sensitive customers, smart pricing decisions can make an enormous impact on profitability.
With insight into customer behaviour from their own system and pricing data from external sources, organisations can optimise pricing for different customers and transactions. They can thus avoid losing a potential customer by pricing too high while minimising the danger of pricing too low and leaving potential profits on the table.
Get more bang for the media planning buck
With access to well-structured data, marketers can be far more discriminating about how and where they allocate digital advertising budgets. Before spending their money, they can ensure that they’re targeting the right people. The likes of Facebook, for example, can offer targeting options that go much further than the basics of age, location and gender. After they spend their money, marketers can track results by a wide range of metrics; for example, conversions or profitability of customers acquired through different channels and continue to enhance their marketing efficiencies.
Bridging the gap between the offline and online worlds
Data isn’t just about the Internet – the reach of digital also extends into the physical world. In future, marketers can be expected to make more use of geolocation and contextual data (with consumers’ permission, of course) to track customers’ behaviour in their stores and to target them with relevant information on their mobile devices, through near field communication devices (NFC). Even more possibilities will open up as connected cars and homes become a reality – the Internet of Things (IoT) will create new opportunities for data-driven customer engagement. Companies will need to start aligning their business strategies, structures and technology to the customer, the data and speed of personal relevance.