Five years ago, IBM published a blog post for its enterprise clients telling them how to avoid drowning in data. If it was overwhelming then, you can imagine how bad the problem has since become: today’s businesses have so much data from social media, point-of-sale (POS) devices, IoT and digital marketing that they don’t know what to do with it. According to recent statistics, 73% of the data companies have is never even used.
On the one hand, this is a bad thing for obvious reasons. On the other hand, data at this scale creates an almost infinite number of opportunities for revenue generation. And it’s not just limited to Fortune 500 companies: thanks to digital marketing tools, small-to-medium sized businesses (SMBs) have just as much access to “big data” as their corporate counterparts.
But what can they actually do with it? In this article, we’ll answer that question, and we’ll start by establishing the value of data.
What is data worth?
Privacy laws emerging in the last few years – such as GDPR and CCPA – have tried to stem the booming market for customer data used by advertisers and businesses to sell a product. The need for such legislation goes to show that in the digital economy, data is the most valuable form of currency: but just how much is it worth?
In 2013, Kickstarter user Federico Zannier managed to net over $2,000 for a bundle of personal information including his social posts, web history, geolocation over time, and more. Although this anecdote goes to show how much some are willing to pay for a joke, the value of data is not that easy to measure. Instead, understanding its worth means understanding the ways it can be used.
The fundamental goal of marketing can be broken down into two parts: first, it aims to connect consumers with the products and services they are willing to pay for. Second, it aims to convince the uncertain that a product or service is worth paying for.
Big data gives businesses the information they need to do both: hence, the right data is extremely valuable. It enables them to find, convert and retain more leads, advertise more effectively and make the most of every campaign.
7 Ways to Use Big Data
- Optimize your website – a business can incrementally improve its website, raise conversion rates and retain more visitors using data from thousands of web sessions. The most common way to do this is A/B testing, which allows a business to deploy alternative versions of the same web content to find the best performing design. The resulting graphs, heatmaps and charts are useful for understanding what works and what doesn’t, informing future design and branding decisions.
- Raise social media engagement – every social media platform has an analytics function which businesses can use to determine which posts work best, and how to earn higher engagement. Social media is also a rich source of demographical information which businesses can draw on for market research. Facebook – in addition to revealing the average and gender of a brand’s audience – will also reveal common hobbies and interests.
- Generate better ad campaigns – digital advertising platforms give businesses a rich feature set for narrowly targeting a certain audience based on thousands of personalization factors. Additionally, most platforms offer testing features which a business can use to generate accurate ROI predictions and find the most effective version of a campaign.
- Improve open rates – while email is still a highly effective form of digital marketing, low open rates and spam filters can hamper the success of a campaign. Popular email suites like Mailchimp allow businesses to test different versions of the same email based on headers, formatting and content, revealing what it takes to land in front of a customer and garner positive reactions.
- Get crowd-sourced feedback – asking a question is often the easiest way to find an answer. With polls and surveys, a business can collect feedback from its customer-base to inform future decisions. If the pool of respondents is low, it can even reach out to a broader group of targeted survey-takers using survey platforms and micro-tasking websites like Amazon’s Mechanical Turk.
- Find better talent – with a talent gap across many industries, recruitment is hard these days, especially there are many positions to fill. With an Applicant Tracking System (ATS), businesses can not only streamline the hiring process, but also find patterns to identify ideal candidates which can help weed out less suitable candidates. Data for ideal candidates can also be plugged into hiring sites and social media to find potential partners.
- Manage customer relationships – customer relationship management (CRM) software is probably the most common way that large organizations extract value from data. CRM will track interactions with customers and prospects over time, help businesses prioritize support cases and identify opportunities for repeat business. Data from CRM is invaluable for understanding what customers want and how to serve them better.
Cutting Through the Noise
The term “big data” has a cold feel to it, evoking the inhuman forces of digitalization and corporate interests. In spite of that connotation, the previous examples show that big data is anything but inhuman: it enables businesses to cut through the noise and reach customers exactly where they’re at.
For small businesses trying to stay afloat in the busy and overcrowded world of digital marketing, data is not only the key to revenue generation: when used strategically, it is also the key to maintaining quality of service and an authentic connection with their target audience.
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