Big data is really just a buzzword, it is said to mean a collection of data sets, including structured and unstructured data, too large to process by conventional methods. The quantity of data being generated is growing almost exponentially and is expected to have increased by 4400% between 2009 and 2020[1]. The type of data is changing too, particularly with regard to the ‘internet of things’ emerging. This can be utilised to provide detailed insights for businesses.
The advent of big data is provoking a huge change in marketing, previously advertising was dreamt up by experts who had ideas of what would work and deals were made on relationships. Nowadays everything can be analysed and tweaked to ensure the most effective campaign for the most people, adverts can be personalised and everything is more precise and formal.This article offers a good view on how big data is changing marketing.
One obvious way in which there is more data available to businesses is through social media. With over 2.4 billion internet users making millions of posts every minute, a business may use this to find insights into their customers. A business may monitor posts directly relating to them, or posts from known customers to attempt to understand their customer base better. There is a wealth of information available which may help a business market more effectively. I have talked in more detail about social media and marketing here.
Arguably the most important aspect of this increase in data is the ability to better manage customer relationships, (CRM). For smaller businesses, the personal touch of being seen to understand customers can be a huge advantage. By analysing the data now available to it, a business is able to communicate with each customer in the most effective manner. From ensuring the use of the best communication channels, to deep personalisation, a business may improve the relationship it has with its customers.
This diagram, below, shows the applicability of big data into CRM. CRM comes from data and without it would be purse speculation, much like now outdated marketing techniques. This offers a useful insight into the process of CRM and how it works, including it’s cyclical, sempiternal, nature.
A key element of CRM is to listen to the customers. If the customers find fault with some aspect of your business, try and fix it. Not only will this benefit other customers, but it may win back the dissatisfied customers; customers who feel listened to are more likely to stay loyal and endorse the business to others.
This infographic details 10 reasons, with examples, of why CRM systems are popular with salespeople.
There is some academic study into CRM, identifying the different stages of an internet based system. This can be used to understand how businesses may begin to use CRM to retain customers and improve the service they offer. The below diagram shows the cyclical nature of CRM and how it may be used effectively. This shows the continued importance of each area of CRM, along with its cyclical nature ensuring it continues.[6]
This article offers a useful list of positive aspects of CRM. As evidenced, there are many positive aspects to the use of CRM. The biggest advantage is surely that of efficiency, a good CRM system will point employees toward the (potential) customers most worth spending time on. Conversely, a CRM system offers a fall-back position where all customer relationships are monitored, to ensure no customers are forgotten. In short, a good CRM system goes a long way to ensuring better customer service for all customers, whatever their needs. Customers are happier and more likely to spend more and employee’s time is spent more effectively.
However, it is worth noting some downfalls of CRM. Most importantly, it may be costly to implement; a CRM system will need to be integrated with other company software, such as email and accountancy software, if the systems do not integrate well, it may prove very costly and time consuming. Secondly, CRM software is not generally intuitive to use, this leads to further cost of training and time spent learning to use the software. However, CRM may well be able to make up for these outlays with improved customer relationships.
References:
Chaffey, D. (2012) E-Business & E-Commerce Management, Pearson. [6]
https://blogs.brighton.ac.uk/mjf16/2016/04/11/the-power-of-social-media-and-word-of-mouth-how-to-spread-the-word-of-your-brand/. [3]
http://www.csc.com/insights/flxwd/78931-big_data_universe_beginning_to_explode. [1]
http://www.inc.com/mick-hollison/5-ways-big-data-will-change-sales-and-marketing-in-2015.html. [2]
http://www.preact.co.uk/why-crm/how-businesses-benefit-from-crm. [7]
https://www.cloudswave.com/blog/infographic-10-top-reasons-why-crm-systems-are-popular-in-sales/#clode. [5]
Verhoef, P. C., Venkatesan, R., McAllister, L., Malthouse, E. C., Krafft, M., & Ganesan, S. (2010). CRM in data-rich multichannel retailing environments: a review and future research directions. Journal of Interactive Marketing, 24(2), 121-137. [4]