Chris Lamoureux / May 21, 2019Big data can be a powerful tool if wielded correctly. Consider that the big data market generated $35 billion in 2017, up from $28 billion in 2016, and is expected to reach $70 billion by 2022.
In other words, many organizations recognize the value of big data and are investing to this end. Unfortunately, it seems that there are still quite a few holdouts who don’t seem to understand where the true value of big data lies.
Many companies collect ridiculous amounts of data only to do nothing with most of it. They have terabytes on top of terabytes of data languishing about collecting virtual dust. They then wonder why nothing comes of their big data efforts.
The key to using big data effectively is to go beyond collection and into in-depth analysis to generate invaluable insights. In fact, often it is wiser to collect less data that’s more targeted to dealing with a specific problem or achieving a named objective than to collect all data indiscriminately.
But you might be wondering why you should go to the effort of collecting big data, let alone spending resources on analyzing it. Below are three reasons why big data is definitely something you should be paying attention to.
Companies that shifted their business model to a data-driven one say that their profits have increased between 8 and 10 percent.
Big data can help you gain a far better understanding of your customers and what they want. These insights are invaluable because they can lead to increased customer retention, increased customer expenditure, improved customer service, higher customer loyalty, and much more.
When you understand your customers, you are better able to deliver exactly what they want. This is a competitive advantage that cannot be ignored.
Companies that shifted their business model to a data-driven one say that their profits have increased between 8 and 10 percent.
Organizations that rely on big data often experience a 10 percent decline in costs. This is due to a variety of factors, including increased efficiency and productivity.
It also helps that decisions are based on fact rather than a gut feeling. This can often lead to significant savings, especially when it comes to increasing customer satisfaction.
For example, if you are having a problem with customer retention, your gut feeling might be that your customers are defecting to the competition due to price. So, you try to improve customer retention by adding more value and offering discounts.
However, you see little improvement in customer retention. If you had turned to big data and data science, you might have discovered that price had nothing to do with it.
Instead, customers were displeased with your customer service team. In other words, you could have saved some money and invested in improving your support service, which would have had the desired effect.
Failing to embrace big data could cause your organization to lose its competitive edge and even end up going out of business, which is something 79 percent of enterprise executives believe. Furthermore, 83 percent of executives stated that they implemented various big data projects to gain a competitive advantage.
The benefit of big data in generating a competitive advantage is that it provides you with actionable insights based on fact. Like in our example earlier, instead of wasting time on strategies that won’t work, you’ll be making data-driven decisions that will have the desired results. You’ll be ahead of the competition simply because you are listening to what customers are telling you.
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