Here’s a number you don’t hear every day: a quintillion. That’s a 1 followed by 18 zeros; a billion billion; a million trillion. As immense as a quintillion is, IBM (IBM)estimates that each day—every day—the world creates 2.5 quintillion bytes of new data. By comparison, all of the earth’s oceans contain 352 quintillion gallons of water; if bytes were buckets, it would only take about 20 weeks of information gathering to fill the seas.
For businesses, managing the ocean of data is frustrating. An Oracle (ORCL)study released in July of more than 300 executives in the U.S. and Canada indicated 93 percent believe they’re losing revenue opportunities by not being able to leverage the information available to them. Pete Elliott, director of marketing at systems integration specialist Key Info in Woodland Hills, Calif., helps companies of all sizes deal with the “oceans and oceans of data” spawned by posts, tweets, likes, links, images, videos, comments, texts, blogs, click tracks, and even digital sensors in shipping crates, among other things. The more data there are, Elliott says, the more his clients of all sizes want access to it—and quickly.
Let’s clear up one big misconception about Big Data now: It’s not just for big businesses. Data analytics is just another tool to increase revenue and maximize profitability. For any size business to stay competitive, it’s imperative to get a handle on its data because its counterparts are likely already doing the same with theirs. The glut of data available today is of no use if it’s not in a form that can be easily accessed and understood. As new software increasingly allows for better collecting, sifting, and sorting—turning data into information and information into insight—it can offer significant competitive advantages.
IBM’s vice president of enterprise marketing management, Yuchun Lee, suggests a very simple starting point: a company’s website. “Where there’s traffic online,” Lee says, “there’s opportunity for Big Data.” That’s true regardless of whether e-business is the business or if the site is simply a marketing tool. The trick, says Key Info’s Elliott, is to “make it as simple as possible—start small, test, and expand your efforts.”
My consulting firm recently did a straightforward analysis that went beyond traffic. We correlated one small client’s media spending, Web traffic, customer inquiries, and purchase data to discover the relationships between each of those metrics. We also tracked overall results to increases or decreases in advertising spending as well as the effects of lag time between media buys. That understanding has given us the ability to improve the effectiveness of the company’s media investment by as much as 9 percent over the coming year.
Data can also have a significant impact on customer satisfaction. Ryan Hollenbeck, senior vice president of marketing at Verint Systems (VRNT), an analytics company in Melville, N.Y., tells the story of a client that used software to look for patterns in call center conversations. The client discovered (to its horror) that it was unintentionally misleading some customers with its advertising. Another client used speech analytics to analyze the conversations of customers who were terminating their accounts, then used key words and phrases to identify other at-risk customers. Reaching out to these at-risk customers, the client reported that it saved some 600 accounts and more than $12 million in revenue in the first year of the program.
Perhaps the most exciting application of Big Data is in helping organizations anticipate the future. Just as police departments are increasingly using historic data to predict where and when crimes may happen, companies are using customers’ online behavioral data to project how new products will perform. For marketers, social media’s initial promise was brands’ ability to interact with their fans in real time. Now its bigger value may lie in analyzing those conversations to determine customer sentiment, identify product improvements, head off nascent public relations crises, and understand evolving needs and perceptions. As Hollenbeck puts it: “The conversation and dialogue that takes place on social mediums may very well translate into a tremendous potential focus group.”
Getting a handle on the potential of Big Data requires you to get your feet wet. Invest a little time and money learning about software services that work online and don’t require buying servers or hiring engineers; Key Info’s Elliott suggests sophisticated analysis through cloud-based applications will be available for as little as $1,000 in the not-too-distant future.
Decades ago, when most business was conducted face-to-face, companies could get to know their customers in a personal way. Today, leisurely conversations are being replaced by instantaneous connections online. Organizations that fail to recognize these new paths of relating to customers, and fail to take steps to collect, analyze, and understand their proprietary data, are swimming blind.