Big Data is Changing the Way Companies Understand their Customers
Big Data, which allows massive amounts of unrelated data to be analyzed, has heralded unprecedented and complex insight into customer behavior.
Previously, companies would collect customer data for the specific purpose of customer relationship management (CRM), but the scope in terms of data types was limited to the CRM system being used.
Today with Big Data, however, companies do not need to specify the types of data they want to collect about customers in advance. Instead, companies can use data analytics software to access large amounts of data from their own collection and other available sources.
An example may help to explain the emerging trends in Big Data, and understand how it is affecting businesses. For instance, a nationwide, limited-service restaurant’s corporate office may want to better understand consumer choice and how it may impact the volume of their business.
Without Big Data, the restaurant chain would have to rely on the aggregate purchasing history of its customer base to determine what customers want. Further, the most granular set of data available would be to separate the purchasing history by geographic location, possibly by state.
Big Data Helps to Identify Cross-Sectional Trends
Big Data, on the other hand, can improve the amount of data available and help highlight cross-sectional trends. In addition to the purchasing history data, the restaurant chain can cast a larger net of data. The restaurant could collect data from social media and examine the consumer behavior pertaining to food preferences and ingredient fads over the last six months. Data from Facebook and other services that allow users to “check-in” at locations would be invaluable for such an exercise.
Additionally, the restaurant could access data from the government on trends in the market about the performance of competing restaurants, while correlating data gathered on new food offerings from those competing restaurants. Moreover, urban and rural density data from the government could be transposed with the locations of the individual restaurants to predict traffic. The restaurant chain could also perform a survey over multiple mediums including direct mail, email, SMS, web-based, and one-on-one interviews.
Big Data Provides Deep Insight Into Trends Directing Consumer Behavior
All of the varied data points would be located in a different software program, file, or in the case of the government data, on the cloud. Without Big Data, the restaurant chain could not collect the data into a single database and analyze the data. The main problem is that the data is stored in different formats and with different methods that make matching the data impossible with traditional tools like Microsoft Excel.
Big Data, however, merely needs access to the data to perform analysis. There is no need to compile data; rather by leveraging massive amounts of computing power it is possible to mine the data for trends and analysis. The restaurant chain, therefore, could use Big Data to access the targeted data and analyze the information in such a manner as to understand the current trends and issues that are directing consumer behavior.
Big Data is providing businesses with a new set of tools to understand their consumers, while also providing an avenue to improve other efficiencies. The topic of Big Data is explored fully in the “Emerging Trends in Business Communications” white paper.