We know Big Data presents terrific potential for marketing. Current thinking, however, may be holding brands back from enjoying its true potential.
As in Matt Assay’s recent piece for Marketing Tech, we’re urged to use tracking and Big Data analytics for targeting and optimisation. But actually, the biggest opportunity lies beyond targeted advertising. It lies in Big Data-powered conversations, between the customer and business.
These conversations will go far beyond brands wading in on social media, providing ‘customer service’ or provoking ‘engagement’. This is about making sales, through perfectly efficient transaction.
While tracking, targeting and data-driven optimisation minimise waste in advertising, Big Data technologies, applied differently, will let marketers eliminate waste altogether. This is Vendor Relationship Management; a new approach to marketing, enabled by Big Data technologies that put the consumer in the driving seat of their brand relationships.
Businesses that are first to create successful propositions in this space will realise a big competitive advantage.
When we talk about Big Data, we usually think of huge data sets gathered from records of consumer behaviour: data describing the products we buy, the places we visit or the media we read, watch, listen to and interact with. The application that marketers typically think of for this Big Data is targeted advertising. We watch what people do and then estimate what they want. Think Tesco Media (A.K.A. dunnhumby): a 1,900-employee “customer insight” business with personal data describing 350m consumers globally.
That’s the Big Data story of the past 20 years but it’s due to change. This type of Big Data and this application of it are limited. There will always be a discrepancy between what a prospective customer wants and the marketer’s best guess of that.
The true potential of huge data sets in marketing will be realised only when we stop watching consumers and listen instead to the intentionally broadcast expressions of what they want. When we stop targeting consumers and instead use Big Data to respond to specific requests quickly and intelligently.
In his 2012 book, The Intention Economy, Doc Searls presents the argument that advertising is wasteful and an over-inflated industry, due to shrink. He’s not wrong. Even with the advances we’ve made in tracking and ‘personalisation’, people are still annoyed by a barrage of useless messaging.
We recently surveyed online consumers in the UK. We asked about their experiences of and attitudes towards advertising. 60% of our 300 respondents said they receive more offers and promotions now (April 2013) than the same time last year but almost half (48%) said these messages generally weren’t relevant.
This situation, of increasingly pervasive, often irrelevant advertising, presents a big opportunity for businesses that are willing to pursue the alternative. The same technology (digital media and interfaces, ubiquitous connectivity and mobile devices) that results in Big Data-powered targeted advertising can also bring us Big Data-powered conversation, negotiation and sales.
The ‘conversation’ between a customer and a business, will go like this: when I want to buy something, I declare it. I don’t have to reveal anything more about myself other than my intention to purchase the holiday, insurance policy, or fridge-freezer. Businesses vending the item I wish to purchase will respond to my declaration with their proposals. I then connect to my vendor of choice and we transact. This is Vendor Relationship Management; conceptually, it’s CRM flipped on its head.
This is not using targeting to minimise waste, it’s using technology to listen, respond and eliminate waste. In VRM, irrelevant messaging does not exist because it is the customer that initiates the conversation.
In the same piece of consumer research, we described a VRM alternative to traditional marketing. In response, 86% of those surveyed said they would be interested in VRM propositions: services that enable them to request offers for relevant products, in real-time.
The first businesses to develop VRM propositions will enjoy an advantage over old-style marketing brands. Equally, the space for VRM propositions presents an opportunity for new entrants into the marketplace. As with any new development in business and marketing, the opportunity to move early won’t last.