It seems that marketers really are waking up to the tremendous value of mining customer data, if the results of a recent report by management consultants McKinsey are anything to go by.
Big data, advanced analytics and customer engagement get top billing in the McKinsey Global Survey report, which highlights the potential revenue boost of targeted customer engagement through digital initiatives.
Respondents to the McKinsey survey say their companies are increasingly using digital technology to engage with customers and reach them through new channels. Fifty six percent of companies are making digital engagement of customers a top strategic priority, and linking this to high projected returns.
And to do this, companies are turning to detailed data analysis to:
- make personalized information and targeted offers accessible online
- use advanced customer targeting to advertise
- run experiments on websites to test the effectiveness of messages and offers.
Senior Management Involvement and a Dual Approach
The critical importance of this drive for customer engagement is underlined by the increased involvement of C-level executives, with 31% of CEOs now personally sponsoring digital initiatives, up from 23% in 2012. Thirty percent of respondents say their companies have now appointed a CDO (Chief Digital Officer).
The approach to these digital initiatives is two-pronged: companies are increasingly mining existing customer data to create targeted offers, then deploying advanced analytics to test effectiveness and refine their targeting.
Analytics tools are now seen by a majority of respondents as a critical priority, with the focus on improving processes and increasing revenue. Big data is being used to improve decision making, R&D processes, and budgeting and forecasting.
The McKinsey report clearly demonstrates that marketers are realizing that targeted digital initiatives create a better customer experience, and are crucial to their ongoing success.
Driving Innovation, Gaining Insight, Creating Competitive Advantage
These findings confirm the growing trend that’s been identified by Gartner, who say that big data is “a disruptive phenomenon destined to help organizations drive innovation by gaining new and faster insight into their customers.”
There’s clearly some way to go, as Gartner’s research shows that 85% of Fortune 500 companies will be unable to exploit big data for competitive advantage for at least another two years.
But it’s critical that they do so. Gartner stresses that harnessing the power of information allows companies to drive growth. Data analytics allow them to predict future customer behaviors, trends and outcomes.
Gartner also highlights the key role that enterprise information management will play, as big data gets bigger.
Big data: a rich seam of revenue
The McKinsey Global Survey findings mirror trends that we have seen. More and more companies are now using big data to develop customer insights and enhance customer experience, and are using advanced analytics to target digital initiatives.
It may be only in the early stages, but already the benefits of mining big data are becoming obvious. Clearly this is a rich revenue seam that companies will continue to exploit in the coming years.
Title image courtesy of Xanya69 (Shutterstock)
Editor's Note: Read more from Simon in 3 Reasons Your Mobile Web Content is Failing and What to Do About It