Big data is big power. Whether you’re running Donald Trump’s re-election campaign or leading Netflix’s marketing strategy, data has never proven so fundamental. So much so that some economists today claim it’s the most valuable resource in the world, kicking oil, gold, and diamonds to the curb. So what makes big data a billionaire’s best friend?
Knowing your customer
Collecting huge amounts of data on your customers—or potential customers—has never been easier. Thanks to apps like Facebook, Instagram, and Twitter, billions of people around the world reveal their habits, routines, and likes and dislikes on a daily basis. All of this information and more is collected and stored by data analytics firms, which then pass on and analyze said info to companies that can afford its hefty price tag.
The benefit of accessing such data is that it allows businesses to observe trends in customer behavior and better understand the modern-day client. This leads to more tailored marketing strategies, which target customers in the most relatable and effective way possible, boosting both customer acquisition and retention. It’s simple—the better you know your customer, the better you know what they want from you.
Once you know what a customer wants, all there’s left to do is speak their language. As Justin De Graaf, Director of Data Strategy and Precision Marketing at Coca-Cola, told ADMA, “We want to focus on creating advertising content that speaks differently to different audiences. Some people love music. Other people watch every sport no matter what time of year. Our brands are already visible in those spaces, and we’re working hard to use data to bring branded content that aligns with people’s passions.”
Innovation and improvement
In the new world of hyper telecommunication, it’s never been easier to study customer needs. Big data allows a company to track its own products, the products of its competitors, and customer feedback. In simple terms, by analyzing what’s selling and what’s not, and pouring over millions of customer reviews, companies can devise an action plan to develop new products or upgrade existing ones.
If a company is looking to enter an already crowded market, for example, then analyzing data is absolutely key. After acquiring Whole Foods in 2017, Amazon leveraged big data to understand how customers buy their food and how suppliers interact with the grocer. They expanded online delivery of groceries into dozens of Whole Foods stores, cut prices, and offered discounts to Prime members.
Such decisions would have been influenced by data showing that Whole Foods had a reputation of being too pricey and that customers preferred to have their groceries delivered to their home. Two years on, surveys have found that Whole Foods’ value perception has “improved meaningfully.” Meanwhile, Amazon is still opening new Whole Foods stores and increasing its deliveries.
Managing the supply chain
Big data also lets companies operate smarter supply networks. A huge amount of data goes into ensuring the right products are restocked in the appropriate volumes at outlets or stores. This includes reports from clients which detail, among other things, their warehouse inventory and sales figures of said products. By analyzing this information, the company can predict its production and shipment needs to a T. This is highly cost effective as it means retailers are sent the correct products in the correct volumes and at the right time.
For instance, companies can use GPS data, alongside traffic and weather data, to improve their delivery routes. UPS uses On-Road Integrated Optimization and Navigation (ORION), an internal route optimization system, to do exactly this. ORION works with online map data to work out miles and travel time, calculating the most cost-effective routes. This not only saves UPS 100 million miles per year—which equates to 10 million gallons of fuel and 100,000 metric tons of carbon dioxide emissions—but it also offers customers a more personalized and efficient service.
The bottom line
Embracing the power of big data and technology is an essential investment in the twenty-first century. It allows businesses to gather insights and uncover trends so that they can make the best business decisions and save money at the same time. From optimizing marketing strategy and profiling customers, to developing new products and increasing supply chain efficiency, there’s no doubt that big data does wonders for today’s businesses.