Using Big Data to Boost Customer Retention

Last Updated: March 5, 2014By Guest AuthorTags: analysis, customer segmentation

The increasing importance of Big Data is spearheaded by the need for firms to know as much as they possibly can about current and potential customers so that they can have the highest possible chances of regularly retaining customers. Customer retention is a highly important part of business success regardless of one’s industry.

The term “Big Data” refers to enormous quantities of data on any imaginable subject. In relation to marketing, Big Data could refer to statistics on customer shopping and purchasing habits. Nowadays, Big Data that’s pertinent to an ambitious marketer could detail a wide variety of different factors, including where a customer is buying, how a customer is buying, when a customer is buying, where a customer is buying, and what kind of platform is being used when it comes to customers making online purchases.

The Telecoms.com Annual Survey

According to the Telecoms.com Intelligence Annual Industry Survey, customer retention was one of the most significant benefits of Big Data among a list of various additional factors including segmentation. A significant majority of survey takes- a group of individuals including both operators and respondents- ranked customer retention with at least a six out of seven in terms of how significantly facilitated it is by Big Data.

Operators can set a comprehensive and expansive process of tracking down business opportunities into motion by simply putting big data to use. However, it’s worth noting that- while there is currently a great deal of interest in Big Data- a more cautious attitude towards Big Data is being seen lately due to the wariness over data breaches and privacy scandals including the Target data breach and the NSA scandal.

Nevertheless, the Telecoms.com Survey showed that using Big Data for both optimization and network planning is currently commonly perceived as highly important. Marketing authorities advise that operators expect to spend about 20 percent of their budget for IT matters on grasping the potential of Big Data during 2014.

The Important of Catching on to the Big Data Trend

Other recent studies and reports regarding Big Data have even gone so far as to say that fully understanding and taking advantage of Big Data could make or break the career of an upcoming management professional. According to a study conducted by Circle Research, a company specializing in B2B market research, over three quarters of European marketers have already made noteworthy investments in Big Data, and they have justified this by calling attention to the deep understanding it provides to them regarding the characteristics of their client base.

Not only is Big Data showing its influence in terms of the marketing investment practices of key players in a variety of industries, but it is also noteworthy in terms of decision making at many firms and organizations. According to the same study by Circle Research, 69 percent of marketers rely on Big Data to determine the overall structure of commercial approaches. The vast majority of marketers- 90 percent- have predicted negative consequences for those marketers who do not learn what Big Data can teach them now to stay ahead of the curve.

Drew Nicholson of dnx has noted the significant shift that Big Data has brought to the world of marketing. Whereas marketers have typically focused their efforts on creativity and drawing clients in with attention grabbing features and offers, Big Data is changing marketing into something that’s a bit more mathematical and analytical than social and intuitive. This shift has necessitated a new kind of training for marketers who wish to be at the cutting edge of modern marketing potential.

About the Author

Kate Baker is a blogger and marketing consultant specializing in the financial sector. She has been blogging for www.niallspayday.co.uk to provide budgeting advice to consumers for the last few years, and she has also been working with Chenango Bank in Syracuse as an account manager and investment consultant.

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To achieve better sales and profits, most companies could be doing more to cultivate business from their existing customers. However, enthusiasm for customer-retaining strategies must not endanger sound customer-getting efforts. How companies balance the two is the big question. To intensify reaching old customers while still seeking new ones, for many firms, will mean changes in market analysis, planning systems, management incentives, and marketing and/or operations organization. In the rush toward growth, consumer marketers have tended to regard success as stemming from obtaining new customers while unwittingly minimizing the importance of satisfying old ones. It is time for more companies to distinguish between their getting and retaining functions, to assess the balance between them, and to remedy any deficiencies in customer retention. This process requires management to value the potential of current customers and to treat them in special ways to get them to keep coming back. Several major elements should be part of the new marketing mix for customer retention: Product extras Keeping customers frequently requires giving them more than the basic product that initially attracted them. Product extras for individual customers over time can play a sales-expansive role. Reinforcing promotions Product promotion works better when aimed at existing customers. If a marketer knows who these customers are, benefits can be obtained by giving them reinforcing communications. Sales force connections The sales force can play a decisive role in the customer-retention function. At a retail or service counter the salesperson is the focal point of the company's strategy and is the firm to the customer. Post-purchase communication A company must anticipate that some customers will encounter either minor or serious problems after purchasing. If the firm is not ready to hear and correct these difficulties, the customer may not repurchase or may cancel the the relationship. Whether company or customer is at fault, standby post-purchase activities can be instrumental in saving these customers.

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