The idea of big data continues to carry great promise. Marketers can use insights gleaned from it to improve the customer experience, boost customer interaction, increase revenue, reduce costs, and even identify breakdowns in infrastructure and the sales funnel. But far too many marketers are stymied by big data instead of capitalizing on it.
In 2016 marketers must learn how to leverage big data. In this Q&A, Absolutdata CEO Anil Kaul explains why he thinks many marketers haven’t been able to use big data to gain a competitive advantage and what they can do about it.
Big data is a term that’s often overused. First, define big data.
Big data has been known for its volume, velocity, and variety. This is the most venerable and well-known definition. But with the advancements in technology, big data is now different from that of the past; big data helps to analyze data that companies once ignored because of their technological limitations. The bottom line is, whatever the disagreements over the definition, everybody agrees that big data is a big deal and will lead to huge new opportunities in the coming years.
You mentioned Gartner’s finding that 85% of Fortune 500 organizations will be unable to exploit big data for competitive advantage. Why is that?
Right now, marketers aren’t able to leverage big data completely. All are trying, but there’s tremendous deficiency of competency, data management and cleaning, IT infrastructure, etcetera. Some companies are on the cutting edge with exceptionally sophisticated marketers, while others haven’t yet migrated. On average, it’s not great. CEB recently published a study that indicated that marketers rely on data for only 11% of decisions regarding their customers. This reflects the fact that marketers aren’t really leveraging data in a comprehensive way, which suggests that the few companies on the leading edge can really translate their proficiency into differentiating results.
Big data is challenging everything marketers knew about marketing. The big-idea concept that was romanticized in Mad Men isn’t enough anymore. A new marketing discipline, rooted in science and the big data goldmine, is vital. Mad Men meet Math Men. Big data simultaneously erodes the effectiveness of traditional marketing while creating massive new opportunities for businesses to build competitive advantage through better segmenting, targeting, and promotion. In the past, marketers were a little more art than science. The scale has tipped and science is an essential foundation and basis for deriving insight. The insight has to be exploited, which is where the artistry often comes in. The scientist tests, measures, and determines the effectiveness of the art. Data is the missing link between marketing actions and results.
What opportunities with big data should companies look for in 2016?
2016 will be an exciting year for big data. Sophisticated demands [from consumers and customers] mean the pressure to innovate here will remain high in 2016. Consumers, for example, will increasingly expect retailers to offer highly customized buying recommendations at the right time through the right device, followed through with seamless and secure e-commerce transactions. Data blending potential in every area from automotive telemetry to medical science to national security is enormous, and we’re only at the beginning
Machine learning will gain momentum; the Internet of Things will get real and bigger. In fact, the IoT will create anywhere from $3.9 trillion to $11.1 trillion in economic value by 2025. The data-as-a-service model will be a reality soon. Some companies will be packaging data-streams-as-a-service as a new business model. Others will look to package and sell their data, too.
What makes big data valuable to a company?
Big data is the new, new thing that will help some companies leapfrog others to become best in class. Big data—when integrated with older enterprise sources—can broaden 360-degree views of customers and other business entities, such as products, suppliers, and partners.
Big data can unlock significant value by making information transparent. There’s still a significant amount of information that’s not yet captured in digital form; in other words, data on paper or information that’s not easily made accessible and searchable through networks. Plus, big data allows ever-narrower segmentation of customers and, as a result, hyper-personalized campaigns, products, and services.
Marketers can use big data to develop the next generation of products and services. For instance, manufacturers are using data obtained from sensors embedded in products to create innovative after-sales service offerings, such as proactive maintenance to avoid failures in new products.