Entrepreneur, Growth Hacker and Marketer
Modern-day marketing has changed drastically over the past decade. Back in the day, when companies wanted to tweak their advertising, they would have to sift through their sales data, click-throughs and general behavior of their audience.
But big data has changed all that. It's changed the way that businesses market to their customers, which in turn, helps companies increase their profits. According to a BARC research report, businesses surveyed that use big data saw a profit increase of 8 percent, and a 10 percent reduction in overall cost.
There are numerous ways you can use big data to adjust your business model for the better, especially as it pertains to advertising. Here are examples of how companies are using big data today, and how you yourself can use it to boost your sales.
Predict products that customers may want to purchase.
How often have you looked at your Amazon recommendations and thought, “Wow, I could really use that!” Chances are, that reaction happens fairly often considering that Amazon uses big data to figure out exactly the type of products you’ll want to buy in the future.
The retail giant -- which hit a net worth of 1 trillion dollars late in 2018 -- gives its customers insight as to what factors go into determining those recommended products. In this context, Amazon cites a variety of data points to figure out what its customers want. Those factors include:
When customers make purchases
How customers rate their purchases
What customers with similar buying habits are purchasing
Obviously, the last factor is the most important one as pertains to big data. Amazon is able to correctly determine what kind of products you want to buy based on customers with buying habits similar to yours.
Similarly, you can use this kind of data to make predictions for your own customers. When you see a sales increase, you’ll start to notice trends. For example, Amazon noticed that people who buy TVs tend to also purchase a TV mount -- which the retailer began to upsell in the hope that customers would buy them together.
Amazon “frequently bought together” example
Image credit: Amazon
Get an edge against operational risks.
Back before the world was connected via technology, issues of fraud were few and far between. But now that so many of us are connected in one way or another, sometimes an entire business can be compromised in just a couple of keystrokes.
Operational risk is particularly high in financial institutes. Scammers are constantly trying to evolve schemes to take advantage of both people and companies. As big data has evolved, however, financial institutes have realized that they can use this information to stop scam artists in their tracks.
Banks, for instance, are now using big data to monitor their transactions on a “front-to-back” business line to help eliminate fraud at all levels. They look at information about who is sending/receiving money, how often those people engage in this behavior, where they live and how much money they are sending.
This type of technology can be helpful for any business, not just banks. As data is collected, trends emerge and anything that deviates from “business as usual” triggers a digital sticky note on that transaction. This makes it easy for companies to identify fraud when it occurs and to keep their operational risks at a minimum.