Big data was little more than a theoretical concept just a few years ago. Since appearing on the scene, spending on big data has grown in the high double digits; according to Gartner, spending on big data grew to $13.1BN in 2012. Companies large and small are increasingly looking to harness big data in order to lower the costs of acquiring, converting and retaining customers. Big data refers to a data set so large and complex that it stands just beyond the ability of most analytic tools, methods and instruments. The definition is fluid—there is no magical number that qualifies as “big data”—because technology is always evolving. As long as there are more ways to collect data, and as long as computer processing power and storage capacities are growing, there will be big data.
Big provides greater insight into a given phenomenon (i.e. customer acquisitions) that informs investment decisions over marketing and other resources.
Big data also allows for real-time monitoring, simulations and relatively inexpensive experiments. Tracking, analyzing and responding to customer behavior in real-time allows organizations to fine-tune how they interact with prospects and customers nearly instantly. At the same time, this same data allows for testing hypotheses and the rapid introduction of new services, offerings and promotions with relative ease.
Finally, big data provides a complement (not a replacement) for human-based decision-making. The art of management is to make informed decisions with imperfect information. Big data helps close the gap, but with every answer, there are always more questions, and automated data analysis will never be a substitute for good judgment. Companies that understand this and leverage big data can achieve better ROI and stronger customer retention than companies that fail to grasp these implications. All of these factors underscore two undeniable facts about data: It is here to stay, and firms that leverage the power of big data enjoy greater growth and profitability than those that do not.
About the Kabardian Group: We help clients achieve profitable growth. Short, simple and to the point. Our clients include companies large and small and at every stage of their development, including start-ups. www.kabardian.com