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Know thy audience

October 2014

Imagine you could know in advance what each of your customers is going to want, and when, giving you the opportunity to reach them with tailored messaging and promotions at exactly the moment they’re ready to make a purchase. Sounds like the marketer’s Holy Grail, doesn’t it?
 
Welcome to the world of data-driven marketing.
 
What is data-driven marketing?
The amount of data being generated and stored by digital systems is exploding. Google responds to more than a trillion search queries per year,1 and on Cyber Monday 2013, Amazon sold 426 products per second.2 We have e-commerce systems, POS systems, ERP and CRM applications, social media feeds, web traffic logs, in-store video, customer-service recordings, RFID systems, product and machinery sensors—the list of data sources is long and growing all the time.
 
But all that data—which is classified as Big Data—isn’t worth much just sitting there.
 
Only by combing through your data—and cross-referencing it with data from external sources like banks and credit card companies, weather services, telecommunications providers, government agencies, and more—can you unleash its true value, generating insights that can help you maximize lifetime customer value and identify and exploit new market opportunities.
 
How does it work?
Imagine you’re the owner of a sporting goods store. Now imagine a hypothetical customer—let’s call him Bob. Here’s how data-driven marketing can help you reach Bob with messaging and promotions that are more relevant and timely than ever.
 
From historical transaction data, you know that Bob has purchased ski equipment from you in the past—and that he prefers more affordable products to top-of-the-line gear. From social media feeds, you know that he’s planning to spend Thanksgiving in the mountains—and that he’s been asking his friends for ski-glove recommendations. From weather-service data, you know there’s a big storm approaching, one that guarantees major ski resorts will be open for business over Thanksgiving weekend. And from real-time smartphone location data, you know that Bob is in your neighborhood at this very instant.
 
Thanks to cutting-edge marketing technology, you’re able to process all that data, from all those disparate sources, instantly and automatically. As a result, you’re able to text Bob with a special offer for exactly the kind of mid-price ski gloves he’s looking for—just as he’s passing by your store.
 
How can it help my business?
Data-driven marketing can’t do all that quite yet, but businesses of all kinds are already turning to data-driven marketing to supercharge marketing ROI, by:

  • Tracking real-time customer sentiment
  • Optimizing online and in-store merchandising
  • Segmenting customers more finely
  • Optimizing their marketing mix
  • Delivering more finely tailored messaging and promotions
  • Optimizing cross-selling and upselling

Amazon.com, for instance, turns data into gold via its recommendation engine, which drives almost a third of its total revenue.3 eBay uses data to optimize digital merchandising.4 And New York’s Hudson Hotel is collecting guests’ social media data with an eye on improving service and driving revenue.5
 
Increasingly, small businesses are also getting in on the act. The Fruit Guys, a California-based fresh fruit delivery service, uses data to gain unprecedented insight into customers.6 Oberweis Dairy, a family ice cream and milk company based in Illinois, uses data to better segment customers and personalize messaging and promotions.7 And so on.
 
How do I get started?
The simplest place to start for most businesses is your customer relationship management (CRM) data. The right CRM solution will give you a comprehensive view of all your customers and prospects and how you’ve interacted with them to date, allowing you to better segment customers, identify high-value customers, and maximize per-customer profits.8 Providers of affordable CRM solutions for small businesses include Insightly and HP Cloud Services.
 
For more tech-savvy businesses that need to process enormous data sets, an out-of-the-box, on-premise solution can be the most cost-effective approach. For instance, HP ConvergedSystem 300 for Vertica, which was designed to augment existing data warehouses, lets you combine data from a wide variety of sources to generate lightning-fast business insights, affordably and with an implementation time measured in days, not weeks or months.

There’s also a growing array software-as-a-service (SaaS) applications that make it more affordable than ever for any business to get started with data-driven marketing. Examples include:

  • Google BigQuery, which lets you make super-fast, SQL-like queries against massive data sets
  • Search engine and website optimization solutions like those offered by BloomReach
  • Powerful digital marketing systems like HP TeamSite help deliver personalized customer experiences
  • Social media monitoring solutions like BrandsEye
  • Location contextualization services like Factual
  • Data visualization and presentation tools like InsightSquared
  • Merchandising-optimization solutions like Euclid
  • Loyalty program solutions like FiveStars and Punchh

 No matter what your business is, or how big or small, new technologies can help you learn more about your customers and drive revenue. If you want to stay ahead of the competition, don’t wait to get started using them—it’s time you benefitted from the awesome power of data.
 
More on data-driven marketing and Big Data
Boost productivity, reduce costs with Just Right IT
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[1] CMO, Marketers have incomplete view of SMB customers: CMO council, January 23, 2014
[2] The Verge, Amazon sold 426 items per second in run-up to Christmas, December 26, 2013
[3] Time, Future of Retail: How Companies Can Employ Big Data to Create a Better Shopping Experience, August 31, 2012
[4] Mashable, 8 Marketers Doing Big Data Right, May 6, 2013
[5] Advertising Age, Manhattan Boutique Hotel Stows Social Data Through WiFi System, August 4, 2014
[6] The New York Times, Finding Ways to Use Big Data to Help Small Shops, July 9, 2014
[7] Chief Executive, Analyze This!, March 7, 2012
[8] Inc., How to Use Customer Relationship Management Software