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Analysis

The Skinny on Big Data

Teams that extensively use customer data analytics across all of their business decisions see huge profit improvement and a greater ROI. We teach you how to not drown in the sea of data

Lauren Dowdle
October 19 2017

The term “big data” gets thrown around so much that it’s nearly up there with “growth-hacker” and “optimize.”

While dropping the term may give you some marketing street cred, you’ve got to truly understand how to use big data if you want your customer retention efforts to be successful.

What Is Big Data?

Typically, when someone mentions big data, they’re talking about gathering data from a variety of sources, both inside and outside of their company. This data is then used to learn more about a particular aspect of your business.

That may seem a bit vague, but that’s because there’s so much data out there and countless ways to use the data. While marketers collect and use the data in different ways, one thing is clear: You best be doing something with big data if you don’t want to be left with the deer-in-the-headlights look.

“Without big data analytics, companies are blind and deaf, wandering out onto the web like deer on a freeway.” — Geoffrey Moore, author and consultant (@GeoffreyAMoore)

You can collect the data through your customer relationship management (CRM) platform, social media pages, email marketing campaigns, website and analytics tools. The more information you can gather, the better.

Teams that extensively use customer data analytics across all of their business decisions see a 126% profit improvement over those that don’t — and 132% more return on investment (ROI).

But collecting customer data is only half of the job: You’ve got to put the information to good use. Data doesn’t do you any good just sitting there gathering dust.

Check out these ways you can use big data to boost your customer retention rates:

Create Customer Personas

One of the best things you can do with big data is to craft buyer’s personas. Not only does it help with retention, but it’s also a great tool when it comes to marketing to your leads.

The persona should include information like the customer’s location, demographics, occupation, title, goals, struggles and behavior patterns. You want to know what makes your customers tick so can meet their needs before they even realize they have them.

Once you’ve built their persona, start targeting them with personalized offerings, content and updates you know they’ll appreciate.

Track Loyalty Program’s Efficiency

We all know loyalty programs can be a great way to keep customers coming back for more, and that’s not going to change. Consumers belong to an average of 13.4 loyalty programs, so for yours to be successful, it’s got to stand out from the rest and give them what they really want.

If a loyalty program is based on getting customers to only serve your interests, it’s going to fail. It has to give them something of value for it to work, and then the benefits to your business will follow. To figure out what it is they want from a loyalty program, turn to your big data.

Use the information you’ve compiled to see what they’re interested in, what it takes for them to make a purchase, what they value and the type of rewards they’d enjoy. You can find that out by looking at their purchase history, survey responses, social interactions and customer notes.

You can also analyze the data you have on your top-performing customers. What do they have in common? And how can you use those findings to recreate that same level of loyalty with your other customers? You need to figure out what’s working (and what isn’t) with your loyalty program to recreate that success.

Give your company’s level of loyalty a checkup by tracking this data:

  • Redemption rate: This metric looks at how many of your customers are using the points they’ve earned through your loyalty program. A good rate is 20 percent or higher.
  • Net promoter score: An important part of loyalty is if your customers will recommend your products or services to their peers, and your NPS will show you how likely (on a scale of 1-10) they are to spread the good word. Your promoters and loyal customers will be the ones who give scores of 9 or 10.
  • Repeat purchase rate: See what it takes to make customers repeat purchasers by looking at your data. Are they buying after you run a deal, when they reach a certain level on your loyalty program or when you email them a product update?
  • Customer lifetime value: To figure out if your loyalty program is working, you need to have a starting point to judge it from, and that’s where CLV comes into play. You’ll be able to track if your customers are becoming more loyalty over time.

Learn what has worked in the past so you can do more of that to engage your customers.

Stop Churn in its Tracks

Predictive data is a great tool for spotting potential churn before it happens. It helps predict which customers are having or might have issues with your product or service, allowing you to reach out to them at just the right time.

You can use an algorithm that looks through current and past customer data to find ones that are similar to current customers, and take proactive steps to make sure this one has a different outcome.

Because we all know what happens to those who don’t learn from history.

Big Data, Big Retention

There’s no lack of data out there on your customers — hence the term “big” data. Anyone can collect the data, but it’s the ones who can decipher its meaning and take action on the findings that are going to be successful.

Don’t let the amount of data out there overwhelm you. Figure out your goals, be as specific as possible, and find the data that will help you track and improve those metrics. Once you find your winning formula, you can leverage your findings to boost your retention.

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Lauren Dowdle

Lauren Dowdle is an award-winning writer and magazine editor based in Nashville, Tenn. Her nearly decade-long writing career has covered everything from landscaping to marketing — plus being interviewed by Jay Leno and winning a backhoe-operating contest. When she’s not behind the keyboard, you’ll find her spoiling her four furry babies and exploring the city with her husband.

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