The Marketing Power of Detailed Data
It’s easy to focus on the “big” in big data—but the type of information firms can collect from customers may hold even more marketing value. ”Transaction-level data offer marketers a more complete picture of what customers did, and didn’t do, while shopping,” says Boston College Professor Sam Ransbotham. “That sets the stage for understanding and anticipating consumer needs, and even real-time best response.”
With Boston College Professor Katherine Lemon, Ransbotham talked about “The Coming Reality: What You Really Need to Know about Your Customers and Your Data” at MSI’s Regional Knowledge Networking Event on March 18, 2014.
Marketers who want to use customer data more effectively know that they face a high bar. As Lemon put it: “How can you manage and meet customer expectations in a world where your customers expect you to know them as well as Amazon does and to be as responsive as Zappos?”
Part of the answer, says Ransbotham, lies in the detail-level information that firms gather about how customers shop. Currently, many companies are building competencies in describing activity, but advantage will come from deeper analysis. For example, what did people look at and not purchase? Why?
With more and more companies embracing analytics, gaining an edge will be increasingly difficult. “Once everyone is collecting and analyzing data, analytics will be a minimum requirement, not a source of advantage,” says Ransbotham. “Differentiating advantage in the future will come, not just from describing past action, but from embedding analytical approaches into everyday processes and from combining data with managerial expertise.”
Data-based decision making requires managerial skill as much as technical expertise, he points out. “Companies need marketers who can ask the right questions, think about what analysis to run, and then interpret the results to generate useful insights.” That is true whether you are a small retailer or a behemoth like Amazon.
As a professor of information systems, Ransbotham has focused his research on IT security and technology as well as social and mobile marketing. He was recently awarded a prestigious National Science Foundation Career Award for his work on analytics and security data.
More and more companies are embracing marketing analytics, but most are just beginning to realize its value.“While we hear stories of amazing insight from data, most organizations are still in the early stages,” says Ransbotham. “We should not expect home runs, but instead look for solid, steady improvements as organizations learn how to better use information and move data analysis beyond descriptive. It may be initially difficult, but effective customer-data-based decision making is within reach of all organizations.”
Customer Value Management: Optimizing the Value of the Firm’s Customer Base
Peter C. Verhoef and Katherine N. Lemon (2011) [Report]
3 WAYS to GET CONNECTED
Employees of MSI Member Companies enjoy the benefits of complete online access to content, member conferences and networking with the MSI community.
Qualified academics benefit from a relationship with MSI through access to msi.org, conferences and research opportunities.
The public is invited to enjoy partial access to msi.org content, a free e-newsletter, selected reports and more.