Wednesday, January 16, 2013

Big Data Enabled Approaches to Multi-Channel Marketing

The convergence of social media, cloud computing, mobile access, location-based information and e-commerce is creating an optimum environment for big data analytics.  Marketing provides a natural application for theses analytics as they enable organizations to determine where to spend, and how best to communicate with customers.  However, many organizations are ill prepared for this shift as marketing has historically been about brand marketing, and lack the technical and statistic knowledge now demanded.    Furthermore, companies are organized in a manner that leads to the fragmentation of efforts by different teams.  Tools and data sources are often siloed across channels, brands and regions. 

The evolution of marketing driven by big data will cause a fundamental paradigm shift.  Decision-making will shift from intuition to evidence based.  Organizations will need to mine the digital footprints customers leave across channels through loyalty data, smart phone location data, e-commerce visits, social media reviews.  They will need to add skilled technicians to their ranks to use technologies such as R and Hadoop to build predictive models to improve customer experiences, and personalize relevant content.  Customer information will need to exist across channels to enable real time insights, and retailers will have to rethink their strategy to optimize their in-store and mobile experiences.  Applications will evolve to provide recommendations as opposed to solely analytics. 

This evolution will increasingly become integrated into a company’s competitive advantage.  Data will be used not only to understand how to get customers to purchase more, but to understand how to improve customer’s satisfaction, identify at-risk customers with a high probability of defecting, and understand why customers are terminating their accounts.

These factors are leading to rapid growth in IT spending, as well as dramatic job creation.  The market for big data technology is expected to grow at a CAGR of 40%, from $3.2B in 2010 to $16.9B in 2015.  Leaders in the space include IBM, EMC, HP, and Teradata.  According to Gartner research there is going to be approximately 4.4 million IT jobs created globally to support big data by 2015.

The results that can be driven by these changes are dramatic.  A recent report by the IDC provides a few examples:

Without adding additional sales staff, a major enterprise software vendor added 200 million euros to its revenue line.
A major sports and entertainment website boosted subscription revenue by 45% without increasing its marketing spend.

One of the web’s most popular financial services sites drove tens of millions of dollars in revenue with its change to its customer experience roadmap. 


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