To put it simply, data science revolves around gathering large amounts of information and using specific algorithms to extract the exact knowledge needed out of it. To this day, around 65% of businesses admit to using big data to maintain a competitive edge.
Whit this being said, one can only deduce that big data is here to stay. It will become a more and more powerful tool for companies to improve their business processes.
But what’s the real importance of big data in business?
Depending on their field of activity, companies use big data to gather various types of information. However, the core purpose remains the same: better, more efficient work procedures.
Accurate identification of your target audience
Defining your target audience is paramount for the success of any business. If you don’t know who you want to sell to, then it is nearly impossible for you to develop a product that sells.
Big data provides insight about your audience that would otherwise be extremely difficult to find. Examples include demographics, location, and the way they relate to your brand. The best thing is that you can get this type of information in real-time.
Traditional customer research takes a lot of time and only provides information up until that specific point in time. Then, if you need updated insight, you would need to conduct research again. With big data, information comes to you on the spot and can be updated just as fast.
Besides gaining valuable insight about your existing customers, you can also leverage data to profile potential customers. This way, you may be able to discover a new audience that would otherwise have been left out.
But why is targeting your audience so important? To put it simply, it shows you who interacts with your brand and through which channels, so you can tailor your marketing campaigns, improve customer experience, and stay on top of the competition.
James Culver, Business Intelligence Specialist at Pick The Writer, invites us to take Netflix for example:
“They gather information about their customers, to recommend shows that would appeal to them. If they would not do that, it would be extremely difficult for their customers to browse through their huge library. Netflix knows the geographic area, the demographics of its users and the type of content they prefer. This way, when new content is being launched, they know exactly who to suggest it to, to increase views. If you were to like watching documentaries and historical movies, and they would start recommending the newest animation movies to you, you would consider that spam and not even bother to open the notification.”
Improved market trend analysis
This is among the number one reasons why businesses use big data. In simple words, market analysis is conducted to determine whether the market is encountering a decrease, increase or if it stagnates.
If, for example, you find out that your market is decreasing. You can take action, create promotions or develop new products that could give it a kick start. On the other hand, if the market is growing, then you can redirect resources towards the products that are on the rise.
Ideally, every company should conduct a market trend analysis once every 6 months or at least once a year. This way, if you know the market’s direction, you’ll be able to make more strategical decisions. You can either expand your venue or sit back until the crisis passes. By incorporating big data into the scheme, information like this can be available at any moment and in real-time.
Market trend analysis is helpful to determine what consumers need and what their behavior is. It is also helpful in determining which of their products are more suited to the average consumer or which other products need to be rebranded or completely taken out.
Cost fluctuations can also be determined with proper market analysis. It can tell a company if similar but more inexpensive products are available on the market and if they need to adjust prices to appeal to consumers.
Tailored content marketing
Identifying the targeted audience and doing a constant market analysis will lead to improved content marketing. You know who your customers are and you know how the market situation is. This means that you can ask your marketing team to develop content based on that information.
Why is this important?
Because if your target audience is represented by stay-at-home moms, producing content that is related to traveling the world may not be as appealing.
You can use big data to see which type of content appeals most to your customers. You can do that by analyzing which emails, blog posts or videos have generated the most clicks or which content helped drive conversion. You’ll also be able to track the content they are interested in, as well as the type of content they don’t click at all.
Once you determined which marketing solutions work best, you can go ahead and invest in one-of-a-kind and high-quality content. Platforms such as Grammarly, Studicus, Copyscape and Best Essay Education help marketers deliver content that is both well-written and unique.
Big data can provide a range of important metrics that help with building awareness, such as the number of times your brand is mentioned on the web, the number of total social media shares, as well as where your traffic is mainly coming from. This way, you will know which channels are the most successful for generating customers and which one you should stop investing in.
More efficient product testing
When you are working to develop a new product, you need to conduct market research to see if customers have a need for that particular product. Through big data analysis, you will gain access to such valuable information much faster. It’ll ensure the results are as close to the truth as possible.
On the other hand, if a product is launched but has no success, big data will be able to tell how consumers reacted towards it. This will allow you to act fast and correct the errors before the product damages the company’s reputation. You can do something before a substantial amount money is invested in it.
Take Amazon for example. They have used big data to identify how customers buy groceries and how suppliers and grocers interact. This way, they were able to expand their business and invest in creating their Amazon Fresh and Whole Foods segment.
Better decision-making skills
Big data should be perceived as the management’s most trusted advisor and should be included in almost all the important decisions you make. By getting access to such exact metrics, you will be able to set more precise goals and determine the outcomes of any trajectory you might be following.
Performance metrics will also help your staff improve their analytical capabilities and become more confident in the steps they take. When seeing hard evidence that proves a certain action plan is more successful than the other, you will remove the doubt and be able to identify low-risk solutions to face certain situations.
Having access to such important data, you will be able to transform never-ending discussions into simple “yes or no” answers. The data is collected, stored, sorted through, and analyzed. The result can often be compressed into a simple “yes, it is effective” or “no, it is not effective” answer. This way, it eliminates endless meetings and contradictions which are nothing but counterproductive.
The importance of big data in business can’t be denied. It helps with defining your audience, conducting market research, and getting more accurate results. By incorporating big data into your business, you will be able to streamline business processes. You’ll be able to make decisions based on exact information and decide if a product is worth investing in or not. As a result, you’ll be able to eliminate unnecessary financial investments.