One of the most overlooked tools of local commerce success is Big Data and how to use it to improve sales and customer satisfaction. For most of us though, Big Data is a well-known term that has very little real world meaning to us.
Do a google search and you’ll find tons of articles on the subject telling you it must not be overlooked, that it’s important, that you have to leverage it, but what does all this mean exactly? We’re here to tell you.
The term Big Data is derived from the idea of being able to analyze large sets of data in order to reveal trends, patterns, interactions and behavior. Essentially, Big Data is the key to accessing the Voice of Customers (VOC) without actually talking to them.
What Can it Reveal?
- Issues with your merchandising strategy. If a large percentage of users skip over critical content areas of your site, you can rework your displays and watch for results.
- Reasons behind a low conversion rate. Find out where conversion fails in the purchase process. Is it at shipping, registration, or at some other point. If a large group dropped out when prompted to choose a shipping method, you can send a targeted promotion offering discounted shipping. If the pain point is registration, you can implement a guest checkout option.
- Social sharing behaviors and patterns. Maybe your users share your offers on social media sites, but your conversion rate at Checkout is still low. You may consider implementing a better social login system that allows those users to sign in with their social accounts.
These examples are just some ways that Big Data can optimize your customer’s experience. Now that we have a few examples in action, here are a few key impact areas for using Big Data in general:
Identify Your High Value Customers
- Which customers are making frequent purchases?
- Which are currently active?
- Which ones make purchases that bring you the highest profit?
By analyzing the data, you can hone in on the group of customers most likely to be loyal to your brand and most likely to respond to your offers. HINT: Do not sacrifice one metric for another; instead, try to intertwine the three. This will reveal the high value, high retention customers who are most likely to refer you to their friends and family. These guys are worth your marketing efforts.
Study Your History
History holds the key to the future, especially where Big Data is concerned. By studying historical patterns you can discover how to optimize the future. Take this example from a 2010 study (old but relevant) conducted by Deloitte. “Through intensive customer data analysis, one retailer… learned that new customers who remained active beyond their first year were five times more likely than others to remain customers for multiple years. This retailer set off on a journey to identify the ‘first year’ behavior patterns of customers [from years prior] … so they could influence ‘first year’ customer behavior to increase the likelihood of long term retention. They found that certain product categories and mixes of categories within market baskets were highly linked to long term retention. Armed with these and other key findings, the client developed a set of predictive models that were applied to ‘first year’ customers… Customers found to be lagging in their interactions were treated with marketing strategies designed to stimulate retention-driving behaviors. Conversely, those with higher quality and levels of interaction were not offered marketing treatments or discounts. This strategy allowed the retailer to focus scarce marketing resources where they would count most.” Excerpted from Understanding customer retention in the retail industry (2010, Deloitte).
Collaborate the Data – Don’t Isolate
There are dozens of software programs and solutions that report some aspect of data that must be considered and reviewed by your team, whether this is related to customer service, marketing emails, analytics, or even inventory management. With Big Data platforms (often referred to as “Business Intelligence systems”), you can connect these departments and allow the system in real time to crunch through the data to better understand how each change and/or movement affects your business. For example, if you implement a new marketing email for a new local offer, you’ll be able to use these Business Intelligence tools to analyze the ripple effect across your customers and how those ripples affect other aspects of your company, beyond marketing and immediate profits.
Insert Voice of Customer
Don’t Rely Solely on Data. Data is a huge treasure trove of information, but don’t neglect the actual voice of customers. Keep communication open with customers and the people who are in contact with them and use this information in conjunction with the data or, in some cases, instead of it.
Enjoy Data-Based Decisions
One of the key aspects Big Data is that it allows you to make insightful data-based decisions removing the guess-work. It opens up previously unknown areas of business to reveal how users are trending over time. Sometimes the largest solutions to problems come down to simple human behavioral patterns that Big Data can make accessible to you. Improve your site by making informed decisions from here on out. Start with Big Data.