• by Joe McFadden , May 30, 2013

A vital aspect of the big data movement is it provides real opportunity to gain insights from customer interactions and drive organizations to real system and process improvements. 

“We should look to big data for inspiration — and combine it with our ability to distill those revelations into testable customer experiences,” wrote Scott Brinker in a recent article on SearchEngineLand.com. 

Every marketer’s brain is ingrained with the mantra – know your customer. With the advent of big data, there are more opportunities here than ever previously thought possible. From a retailer’s perspective, effective use of big data can positively impact the customer experience and engender loyalty because it allows the sellers to personalize offers, treatment and responses. 

More data allows for more closely targeting customers based on needs, purchase history and countless other demographics and pieces of historical data. With all this available data, it’s no wonder we are seeing the increasing popularity of personalization technology that enables companies to target customer interests more precisely creating a mutually beneficial environment of value-added personalized service for the customers and increased sales opportunities for the marketers.

This individualized or personalized advertising is pervasive among online retailers and other online advertising companies. Web site visits, navigation patterns, purchases by subjects, patterns, timetables, etc., are being used to deduce consumer preferences and habits and target relevant sales, offers, products and partner offers. Anyone who has ever shopped on Amazon or eBay or watched a movie on Netflix has witnessed this firsthand. 

There are other valuable channels through which marketers can individualize sales pitches. Contact centers, a strategic customer engagement channel, are another important avenue for personalization technology. Contact centers are no stranger to effective use of data. They have historically utilized disparate data from across multiple channels and sources to intelligently route callers, determine contact history across channels, determine best offers, expose performance issues, lower costs and predict outcomes based on analytics. 

With the onset of data consolidation in the cloud from multiple data sources and channels, there is tremendous potential for personalization in contact centers. The opportunities here can be quite different and more dynamic than with online purchasing, because they rely on personal, one-to-one interaction. 

When marketers get personalization right, it creates an environment of value-added services driven by the company knowing and understanding the customer. In turn, customers feel more loyal to a company that is looking out for and serving its needs. 

There is big value in Big Data. However, it does not come without substantial challenges. Companies must integrate systems with which they can capture and correlate data across multiple consumer touch points, channels and timelines, piecing it together from disparate sources to create a big picture.

In a December 2012 article in Harvard Business Review, Denish Shah and V. Kumar summarized their analysis of the customer data sets of five Fortune 1,000 companies during periods ranging from four to seven years. The research confirmed “the average profit from customers who cross-buy is higher than that from customers who don’t.” However, they “discovered that one in five cross-buying customers is unprofitable.” We can infer from their findings that consumers respond to offers relevant to their immediate need. They are perceived as a value-added service and build loyalty, but personalization may need to be broadened outside of the company’s realm of products. 

Clearly, the advantages of big data are great. With the cloud-based data repositories available today, consolidation from multiple sources is now possible. Companies can see the good and the bad interactions and then apply insights into which actions, offers and responses make sense as next steps for their customer.