Practically every marketing executive is hard at work brainstorming new ways to apply big data to his or her existing strategies. Companies want to improve their advertising campaigns and sales pitches by considering more information about their prospective customers, and data mining is a vital first step in that process. For the most part, companies have a long way to go to fine-tune their approach.
The key area where marketers must improve is personalization. Companies are gathering plenty of information about consumers, but all too often, it lacks specificity. Companies have uncovered observations about broad swathes of the population - they can tell you that 13 percent of middle-aged men drive this car, or that 29 percent of teenage girls use that smartphone, but they can't dig deeper to discern particular insights about individual people.
This is the next step in the big data movement. Anyone can find data, but those who find the most precise data will win the race. Jonathan Gordon, Jesko Perrey and Dennis Spillecke, three marketing partners at McKinsey and Company, recently published a study finding that personalization in marketing delivers five to eight times the ROI that typical outbound marketing campaigns do. Sales often increase by 10 percent or more when companies make an effort to improve personalization.
Positive effects of personalizing
One major plus to come out of personalized marketing is specialized shopping recommendations. The same way an online store like Amazon saves shoppers' histories and uses them to come up with future suggestions, more retailers can do the same. By gathering specific data on each shopper's past, companies can nudge people in the right direction toward spending more money.
Looking into shoppers' spending histories may seem somewhat invasive, but it's better in the long run than making blind guesses in the marketing process. According to ZDNet, consumers will approve. Kelly Kennedy, senior vice president of enterprise sales at Infogroup Targeting Solutions, noted that people are "fine with sharing personal details, so long as it earns them something."
The alternative to using personal data is going after consumers blindly, sending spam emails and making cold phone calls. That approach doesn't benefit anyone. For marketers, it's a waste of their time and money, and for consumers, being badgered can be off-putting.
Data quality is vitally important in today's marketing climate. Equally essential is data specificity. Marketing is all about collecting and using information, but vague generalizations won't get anyone anywhere.