Embracing a big data mindset
Florian Zettelmeyer discusses how companies of any size can get more from their existing data
When industry observers discuss big data, the focus is typically on the magnitude involved: the huge volumes of data being generated every day or the computing power required to turn information into insight. It's no wonder that some middle-market companies have determined that harnessing big data is well beyond their reach.
As with many emerging business trends, technology is a vital component — but it's not the only factor.
Companies that seek to extract value from their data simply by investing in more computing power will be missing the opportunity, says Florian Zettelmeyer, professor of marketing and a specialist in data analytics. Instead, executives must understand that the obstacles they face in generating more customer insights arise not from the increasing amounts of data but from shortcomings in their approach to data analytics.
Before the big data era, companies such as Reader's Digest and Capitol One developed successful business models by using data analytics to drive effective customer segmentation. What do these businesses have in common with the Amazons and Facebooks of the world?
Zettelmeyer says it's the "big data mindset"— essentially, the pursuit of a deeper understanding of customer behavior through data analytics. The big data mindset encompasses four elements:
- DESIGN MARKETING PROCESSES WITH DATA IN MIND. By designing all marketing processes with measurement in mind, companies can ensure they have access to relevant information when they need it.
- ENGAGE IN RESEARCH AND DEVELOPMENT EVERYWHERE. Companies that promote a culture of testing throughout the organization can gain tremendous insight into consumer trends and user behavior.
- USE PREDICTIVE ANALYTICS. Businesses are increasingly able to identify customer patterns and generate targeted offers, often before customers are even aware they have a need.
- CHALLENGE CONVENTIONAL WISDOM. Since data analytics can provide definitive answers, there’s no excuse for using the status quo as a default.
Companies such as Amazon and Facebook are high-profile examples of companies reimagining what's possible with big data, Zettelmeyer is quick to point out that having access to hundreds of millions of customer records isn't a prerequisite for companies. The big data mind-set can drive insight whether a company tracks information on tens of millions of customers or has just a few hard drives of data.