Big data is very much a buzz word at the moment. The amount of information stored as data is increasing exponentially;every five years an organisation's data grows ten fold, and some people are referring to this as a data explosion.Now people are waking up to the opportunity that lies in all this data to answer questions that drive business, and make a difference to the bottom line. Questions like; who are our customers? How do they find us, and why do they buy from us?
The first thing to note is that raw data is rarely fit for analysis. Because data originates from so many different sources; your website, your call centre, your transactions, surveys, the list goes on - it needs to be centralised and,where possible, integrated. ETL (which stands for Extract, Transfer and Load) tools are great for this; they extract the data from the various systems in which the data is siloed, transform it (the cleaning process that may involve transposing, filtering, joining, applying rules and calculations), and then load it into a data warehouse where user scan begin work to report on it and find insights.
For a while now people have been harnessing the power of predictive analytics; the concept of using historic data trends to forecast future behaviour. However, a forecast is useless to your business unless appropriate action is taken to leverage the predicted opportunity, or avoid a predicted risk. Hence the arrival of prescriptive analytics;the act of assigning an action before a forecasted event takes place.
An example of this would be a customer who has subscribed to one of your services but has historically demonstrated a tendency to allow their renewal to lapse. The data tells you this, and your system warns you a month before the customer is due to renew. Now you have tested a few different approaches with this sort of client, and the data shows you that having one of your sales reps personally call the client has the best success rate. Therefore, this becomes the prescribed action, and an email instructing the sales rep to call the respective client is automatically sent out.
Big data definitely presents an opportunity for companies to get a better understanding of their customers, and tailor a more personalised experience for them. However, due to the complexities involved in managing all this data, there are few companies who currently leverage this resource to the greatest extent possible. Those organisations able to do this soonest stand to gain a lot through differentiating their customer experience, and thus gaining competitive advantage.