Everyone, it seems, is talking about big data (we’re even doing so on The Decision Factor). Why not, there’s a lot of untapped business value in big data. However, a lot of the hype focuses on how to access that data. Again, understandable—it’s a massive beast. But many companies seem to be stuck in analysis paralysis, focusing on an academic discussion of technical approaches for accessing big data rather than concentrating on where they can derive business value from big data today.
So, I thought I’d focus this blog on three simple business opportunities you can use to get started with big data: make unique, real-time offers; challenge the status quo; and operationalize all that data.
Make Unique, Real-Time Offers
Retailers are a good example for this one. They produce massive amounts of data and are motivated to capture their customers’ attention while they’re already in the buying mood. There are many areas where tapping retail data in real time provides business value, but one of my favorites is at the cash register.
I’m a customer shopping at my favorite store. I bring my purchases to the register, where the cashier rings me up. The system compares my current shopping basket to my purchase history and profile in real-time, identifies that I’m not buying pants to go with my shirts as I’ve done in the past, and creates a personal offer for the cashier to present to me. So, the cashier mentions a new pair of pants they just received and provides me a personalized offer for 25 percent off if I buy one today.
Another good one is perishables. With perishables, you don’t want extra stock any more than you want to run out of stock. Big data done right lets you monitor your sales in real time and make inventory adjustments before there’s an issue:
- Eliminate the promotional price for a fast-selling item to maximize profit before you run out
- Move goods from store A to store B intraday, so goods are where they’re selling best
- Offer a spot promotion for a slow-moving item, and so on
Challenge the Status Quo
The danger of traditional reporting and analysis is it can become a self-fulfilling prophecy if you only look at internal data. Your sales data, for example, may show that vanilla yogurt is your best-selling flavor. But does this really mean that’s the flavor with the greatest customer demand, or does it mean that your company simply manufactures more vanilla?
One yogurt manufacturer asked this question and leveraged big external social data to answer it. They discovered that pineapple is the hot flavor, and people were only buying more vanilla because the store was out of pineapple. As such, they increased their production of pineapple yogurt to drive more sales. This customer example, by the way, was highlighted nicely in Rani Goel’s big data post on March 29.
Use big data to challenge the status quo, validate assumptions, and extend your analysis beyond your four walls—this is probably one of the biggest benefits of big data.
Operationalize All that Data
The previous use-case examples focuse on the benefits from analyzing big data. However, sometimes the answer is really obvious and doesn’t require a lot of analysis and decision making—you just want to act. You want to take that information that’s staring you in the face and generate leads. Immediately.
One paint manufacturer I know uses social media to survey customers about the colors they like and integrates that data into their CRM system. Of course they mine the resulting big data into more intelligent decisions, but they also tap it to drive processes. For example, whenever someone comments that they’re looking at different colors to paint their room, that information generates a lead in the CRM system that can then be followed up.
In this instance, it’s not about decision making as much as it is about collecting, parsing, and automating the process.
So what does all this mean? Simple. Stop thinking about “can I do this” (you can!) or “which solution should I use,” and start looking at where in your business you can gain the most value from big data.
- Look at your internal sources (Where are you generating reams of data?)
- Ask yourself what business advantages would be gained if you could analyze data down to the fine details—in real time
- Examine the decisions being made within your company and whether they’re biased by only looking at internal data (think the yogurt example)
- Explore how you can capitalize on the big data outside of your company and automatically embed it into your business processes