There has been much attention and debate around the subject of Big Data. For some, the collection and utilization of vast databases of user information is a controversial and touchy subject. However, there can be no doubt that for targeting advertising and customer service the benefits of Big Data can be used to improve the customer's experience and to deliver them the quality content they actually want to see.
Big Data not only helps you bring in new customers, but it also allows for the collection of customer intelligence, which can be utilized to improve customer retention. Let's look at five ways that using Big Data can help improve customer retention.
1. Understanding the Customer's Needs and Desires
Collecting customer intelligence allows businesses to understand what their customers like to do and purchase. By analyzing what sort of products, services or media the customer consumes a business can better target and hone what the customer is looking for. For example, by observing what kind of multimedia the customer consumes a data engine can make suggestions based on what they might like, what other people with similar tastes like, and present the customer with the most relevant, targeted options tailored to their unique taste. Such systems have been widely implemented on some of the most popular websites on the Internet. The 'suggestion engine' is a powerful tool for Big Data. It helps to improve customer retention by constantly displaying to the customer the parts of a product catalog or the services available which are most relevant to their interests. This allows for a site to immediately provide relevant information to the user's unique needs without the user needing to navigate through the search themselves.
2. Handling the Paradox of Choice
Online stores and businesses have the benefit of being able to handle vast databases of hundreds or even thousands of items. While having a vast selection is a great way to expand your potential market and engage more users, having such a huge amount of products offered can sometimes become confusing to the user. By collecting data about which products are being viewed and purchased, and correlating that data with other customer intelligence, Big Data can work to effectively reduce the Paradox of Choice. Instead of being overwhelmed by all the possible options, users can be directed to exactly what they are looking for - sometimes before they even knew they were looking for it!
3. Specialized Offers, Sales and Discounts
Tracking how your customers are using services or buying products allows businesses to target those specific users with offers and discounts tailored to their individual tastes based on their past history. It can also allow a business to utilize customer metadata information like their location, or social data about what their friends like, to offer better deals and potential savings to the customer. If a business hosts an event in a specific location, or multiple locations across the globe, knowing where your customers are located geographically allows sending specific, targeted promotions for your event to only those users who are within driving distance, for example.
4. Reducing Spam, Increasing Relevancy
How many times have you opened your e-mail only to find a bunch of ads for the junk you don't want? Customers dislike spam and, frequently, any form of advertising can get chucked into the spam filter. Sending out ads on the Internet can, therefore, be a perilous endeavor; if a customer identifies something as spam they might block further communication from that source, or become disgruntled with the company that sent them the 'spam'. By collecting large amounts of data on your customers, not only data about purchase history but also sometimes customer metadata (age, location, gender, occupation, etc.) as well as social data and web browsing habits, you can utilize a variety of techniques to make sure the content delivered to the user is something they find useful or enjoyable. This significantly reduces the potential for a customer to perceive the ads as spam.
5. Engage New Potential Customers and Suggest New Things to Returning Customers
The vast nature of the Internet means that frequently it has to be navigated without any sort of road map or guideposts. Web surfers are confronted with the option of summoning virtually anything they can think of within their browser. With so much content available, it's impossible for a user to even understand what all of their potential choices are. Big Data allows businesses to effectively target where their content needs to be displayed, especially if used in conjunction with Business Intelligence software. This helps users to discover what they were looking for as well as find new content they may have previously been unaware of. By generating content suggestions, Big Data algorithms help users navigate the vast web of potential products and services available to them. This has the desirable effect of educating customers on the options available to them while simultaneously keeping those options relevant and interesting to each unique individual.
It should be noted that these are just five ways that Big Data can improve customer retention and this simple list merely scratches the surface of the vast array of methods this data can be used to improve your business. By effectively utilizing Big Data via savvy business intelligence processes, companies are constantly improving their user experience. The multitude of possibilities for customer acquisition, retention, and service is increasing by the minute!