How to Use Big Data to Create Value for Customers
Updated: Jul 23, 2022
The power of big data and analytics in the field of sales and marketing is no alien concept to anyone who has been following the trends in the space. The benefits of using data to generate leads, pursue them and convert them into full-fledged clients are enormous and have thus, been used across industries. Although efficient targeting and marketing strategies can be designed using data, it does not create a lasting impact on the performance of an enterprise. What needs to be done is create value for customers to retain them.
Why should big data be used to create value for customers?
When companies predict and capture the next purchase or lead, they are essentially growing their customer-base further by acquiring new ones. However, it does not ensure that the existing customer-base stays loyal to them. This would help the companies to retain their market position and share in a more effective way. Targeting and winning more customers can give organizations an advantage only in industries where competitors are lagging.
In most industries like retail, insurance, travel, banking, and even manufacturing, most competitors have equalized and leveled their predictive capabilities. Hence, predicting the next purchase cannot help a company grow by bounds as much as strengthening the current customer-set will. Data can be used to answer more strategic questions about long-term customer stickiness, loyalty, relationships, product and customer portfolio optimization. Some questions that enterprises need answering from the data available are what a customers’ lifetime value is, what will prevent them from switching onto the next market player in search of a better price or what will help a customer stay loyal to the services provided to him.
It is observed that companies that are relevant to the customer typically place high importance on customer satisfaction. They design customer-centric strategies and hence, use the data available to create services and goods that satisfy the customers and in turn, provide an edge to the company over its competitors.
For instance, Amazon, the e-commerce giant uses its customer data extensively for designing customized product recommendations. With a net promoter score of about 70%, the company has set an example of how to make use of the data in a way that is useful and important for the customer. Customers will be willing to provide their data if they see higher benefits than the costs involved in the process. Furthermore, if companies can give confidence to their customers that the data will be used to provide better services and goods to them and not against them, consumers will be willing to share their own details.
How can data be used to create value for the customer?
Customers will feel secure if the risk and costs that have to be endured by them can be minimized. Enterprises must use data to analyze the risk for a customer and make him aware of the same.
For example, e-commerce forums like Amazon inform the user about the ratings of service providers and sellers in order to reduce the chance of losses or risks they might face in a transaction. A lot of customers search for more specific answers to questions like what
Such questions can be answered by crunching big data about customer and product affinities,
transactional trends and competitor data.
Data present in silos might not be able to present insights as is. However, when aggregated, it can provide useful insights for both the customer and the company.
Let us consider a company that sells farming equipment, services, and aids to small-scale farmers. In such a scenario, data from individual farms and farmers will not be able to help anyone take any decision. However, the data once aggregated from multiple farms in various areas, operating under the diverse soil, climatic, and environmental conditions can yield more effective and useful information about the optimal inputs for each individual farm. This would help the farmers make more informed decisions about what crops to grow, what conditions are most feasible for a certain type of yield and what is going to help him maximize his earnings or profit. It will also help the company provide more customized solutions, services, and goods.
Data, when used to create recommendations for customers, is the most valuable for them.
Customers feel secure and important for any industry when any kind of data is being used to empower them and not exploit them. Hence, companies should use data to not only target and acquire new customers but also empower existing customers, improve the services and goods provided to them and also help them minimize their losses and risk.
Wish to create value based insights for your business using big data? Contact Datahut, your big data experts.