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This excerpt is from the Innovation Excellence. To view the whole article click here.  

5 years ago
How Big Data Can Help Your Business Thrive

 

Anyone looking to run a successful business cannot ignore demographics. Once your target audience has been established, it behooves marketers to determine your core customer’s age, gender, race and income level. While it’s important to retain existing customers, it’s also critical to identify who your “average” customer is, but why is that?

Big Data Matters

If you truly want to make an impact on your company’s bottom line, you need to know what type of people are interested in it. Being privy to this information will allow you to preempt their needs and meet them head-on through strategic targeting.

One example of this exists in the gaming industry, where effectively marketing their product towards those customers who would be most interested in their product. An unfocused marketing campaign that targets a very general audience would be ineffective, and can cost a company thousands in lost marketing dollars.

So where do they get this information? Information aggregation services employ analytics experts, or data scientists, who interpret customer behavior from reams of raw data. With this information, changes can be made with the aim of maximizing revenue. In one case, a game manufacturer was able to double its revenue to over $100 million dollars through simple tweaks to game design that targeted common customer characteristics.

The important thing is to pay attention to your customers and make the appropriate changes, and that’s what makes “big data” so exciting: it can be extremely lucrative, regardless of your specific business niche.

The Growth of Big Data

With the explosive growth of social media and the Internet in general, marketers began to realize the power of harnessing both to increase brand awareness. Later, they discovered that they could learn a lot about their customers’ spending habits and interests by monitoring their online activities.

However, with over 9,000 tweets sent per second, it can seem impractical to dedicate time to understanding and interpreting customer behavior through such a vast amount of data. Even Google had attempted the enormous feat of indexing tweets back in 2011, but ultimately failed.

Even worse, some financial officers may be cross to budget for social media departments due to the department’s inability to provide a tangible ROI. In fact, many social media departments are shut down entirely due to not having set goals. If the department can’t prove that it’s making a difference in returns, it doesn’t have a chance of survival.

And that, sadly, is where many companies get it wrong. You can’t simply jump on the social media bandwagon and specifically assign a team to do just that. Rather, an integrated approach that utilizes all facets of big data would effectively cover all of your bases and provide you the valuable insight to make informed decisions.

Psychographics Fill in the Gaps

Where demographics cover the basic physical traits of a customer base, psychographics go one step further by observing customer behavior. In essence, it takes into consideration the customer’s social identity and modifying marketing efforts to meet that identity. Where demographics can be lifted from readily available tools, psychographics are not.

The basic goals of psychographics are to retrieve customer insight by:

  • Getting to know them
  • Observing their behavior.
  • Asking questions.

As the previously mentioned game manufacturer clearly displayed, customer behaviors were observed, studied and met with relevant changes to game design that netted double their normal revenue.

Even better, the natural steps that come from studying psychographics also generate brand loyalty. When a company takes proactive steps towards connecting with their customer, the latter will feel more valued and will likely recommend the business to their friends and family.

Word-of-mouth recommendations are also very powerful at creating brand awareness and helps companies avoid the old school and inefficient method of “cold calling” potential customers.

Examining and acting upon what motivates your customers will generate more accurate leads than simply pandering to what’s shown in a demographics spreadsheet. Just because your customers share the same age group or income level doesn’t mean that they have the same interests.

Instead, find out what motivates them and where they interact most.

This excerpt is from the Innovation Excellence. To view the whole article click here.

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