Imagine being able to track your luggage through a mobile device. Delta Airlines is the first to provide this facility to its customers, and it became possible thanks to big data. 130 million bags are checked into the airline every year, so they used this information for the benefit of their customers.
Their app has received more than 11 million downloads, projecting them to be a customer-centric company. Southwest followed the same strategy and introduced speech analytics, understanding customer behaviours through big data and growing their customer base and their loyalty every year.
Big data is not just a fancy word you can use in the office to impress your boss; it is a reality that can change the game for your business. The business world has been taken over by a tsunami of big data, opening doors we didn’t know existed.
We can utilize this information to boost profits and make intelligent predictions about the future.
Are you using big data for the benefit of your business?
Here are the many ways you can use it for more profits;
Personalized services:
When you provide services tailored to meet each customer’s expectations, your business wins. You can do almost anything to meet the needs of your user base by using data and insights.
Raw data often looks useless and unworthy to the naked eye, but to the savvy marketer, it provides an unparalleled opportunity. For example, a local business can initiate location-based services or discounts by gathering data from multiple GPS devices present in its vicinity. The closer your customer, the higher their chances of availing greater discounts on your products and services.
Bundle offers:
If it’s difficult to sell one product or service at a time, why not create a bundle pack to make the deal seem more lucrative to your customers? Bundling has been applied to almost everything now; fast food, clothing, jewellery, cable TV, etc. The objective is to sell more to a customer who is ready to pay you.
It is also a great opportunity to cross-sell or upsell something to your warm leads. In Technology, Media and Telecom Markets (TMT), bundling is a little harder. These businesses often merge into other businesses for accelerated growth, affecting customer loyalty.
Negotiated discounts can vary between 40 and 70 percent. If a company sets the bundling discount at, say, 55 percent, many customers will not find it sufficiently attractive. Yet if the bundle discount is 72 percent, for instance, the company will be giving away too much to too many customers.
The key to bundling in these markets is to focus on your value proposition. Stick with products which have a higher margin and a higher potential for success.
Plug and play:
In this model, you can sell the same product or offer to every customer. It is relatively easier to send such offerings to a set of people you picked up by skimming through large sets of valuable customer data.
Customers can trust your offering. It is easy to deliver and can increase the margins for the economies of scale. The downside to this may be that customers may find the offering too common and this may increase their risk of switching to a company that offers better personalization.
Pay for every use:
You can offer a wide selection of products or services to your user and tell them that they can pay only for the ones they use. It offers improved product margins and creates a steady flow of income from users who know and trust your product or service.
However, you must consider the high customer acquisition cost at times to penetrate larger markets. For example, gathering restaurant analytics to save time and increase revenue so data-driven decisions can be made.
Optimize:
Big data can provide your offerings with finesse. But to continuously attract a larger customer base, you need optimize the process continuously. Measure past campaign results and apply the findings to future campaigns.
By simple optimization, Sprint was able to reduce their network error rate by a large percentage. 53 million users utilize their services and the company is able to pull it all off without ever landing into an unpredictable situation.
Commission:
You can create a model where companies can pay you a commission to use your offering or services, and you can give a discount to early birds and referrals. Gather location-based data to offer smarter discounts to nearby users and build strong relationships with your customers. This could also work as a revenue-sharing settlement between you and other parties, helping you increase the value of your business based on key insights from each customer interaction.
Value exchange:
Two companies can join hands to offer value to a common customer in a value exchange system. In this scenario, company A has an established customer base and Company B is introduced as a value-added service partner in that relationship.
As a result, both companies and the customer benefit from the partnership. Big data will help you target relevant customers and increase the return on investment of your marketing campaigns.
Subscriptions:
Sweet little subscriptions will never get old. The customer believes that they pay you a small fee in exchange for a vast variety of services.
Walgreens is using big data to augment conventional medical tools for patient check ups. This helps them assess their patients’ conditions better and provide relevant recommendations too.
Their goal is two-fold; help patients with their immediate health concern and also provide a holistic view on their health to avoid future medical costs.
Customized offers:
Use the pool of customer data to bring customized offers to your customers. The most loyal customers of your business are also the most valuable and profitable, so why not reward their loyalty and provide them with greater value?
Analyze real-time purchases through the pool of data you receive from every customer and think of innovative ways to send offers to customers based on their preferred mode of shopping.
UPS is able to ship 4 billion items through 10,000 vehicles and saves 39 million gallons of fuel by using predictive analysis of taking the fastest route. On-truck telematics help the company deliver efficiently.
Gain feedback:
Customer data is the easiest way to improve your business. Apply analytics to the data received from your customers and identify products or services your customer likes to buy often.
Pricing:
You can use big data to make better pricing decisions. McKinsey found that 75% revenues of a company come from standard products and 30% pricing decisions fail every year. A 1% pricing improvement will lead to an 8.7% increase in profits.
Contextual marketing:
Big data can power your marketing campaign by adding context and artificial intelligence to the equation. Big data analytics can save the day by building scalable systems that bring predictive intelligence to your projects. It increases the ROI of each dollar spent on marketing campaigns. Here is the full contextual marketing playbook.
Last word:
Big data is trending around the world right now because of the potential it offers to businesses. We can finally launch a business model which is based on intelligent predictions from the start. However, you must have the right tools at hand to analyze this treasure trove of data and make it relevant to your business.
If you aren’t already using the power of big data to revolutionize your business, now is the time.