Businesses in all industries are experiencing churn. In the United States, major industries are experiencing churn between 10-25%. Suppose a company has one million subscribers with an average revenue of one hundred dollars per year per customer. Even if the company has a measly 10% churn, it will lose ten million dollars every year!
Is there nothing businesses can do to get rid of their churn issues? Well, they certainly can. Businesses can focus their attention on using big data in marketing strategies.
Importance of big data in marketing
The use of big data in marketing helps businesses gain valuable insights into their potential, current and former customers. Thanks to Big Data, companies can better understand the needs, likes, dislikes and wants of their customers. This helps marketing teams create better personalized and engaging marketing campaigns that can help reduce churn rates.
Types of Big Data Useful in Marketing
Data comes in a variety of forms. However, if companies want to use big data in marketing, they need to focus on three main types of data: customer, financial and operational.
Let’s take a look at each in detail.
This includes names, ages, contact details, email addresses, subscription history, and other customer data, which helps build customer profiles and personas that can help with marketing strategies.
This includes expenses related to sales and marketing campaigns and other costs incurred to gain or retain customers. Businesses can also have their competitors’ data, such as product prices included, if needed.
This includes data related to different processes throughout the customer journey. Data such as customer feedback, IoT sensors, and logistics are included in operational data.
How Big Data is useful in marketing
When used effectively, big data helps marketing teams better understand their customers. This allows them to optimize their marketing strategies, speed up processes and improve customer loyalty and retention. Here’s how using big data in marketing helps reduce churn rates.
Ensure constant customer communication
Big data can be used to stay in constant contact with customers. Businesses can regularly send out emails, messages, and coupon links that can help the customer stay engaged with the business. Plus, it can make the customer feel special and that the company cares about them. This helps in customer retention and reduces churn.
Design better marketing campaigns
Using big data in marketing allows companies to create personalized marketing campaigns that connect and resonate better with the intended customer. This increases the chances of the customer signing up to use your products and services.
Big data analytics helps companies understand what the customer likes and dislikes. They can thus create marketing campaigns that focus only on the products appreciated by the customer.
Improve pricing decisions
Previously, companies decided the selling price of their products based on minimal factors, such as the cost of production, transportation costs, and competitor prices. But, in today’s digital age, businesses need to focus on various parameters to determine the optimal price for their products. These include customer buying decisions, average cart value, product preferences, and economic situations, to name a few. Thus, dynamic pricing is the new pricing model adopted by enterprises.
Big data can help companies determine and automate the best pricing strategies for their products. It provides information about the preferred pricing tier, frequently used discount type, and customers’ preferred payment method. This way, companies can price their products competitively and offer fantastic discounts. These can help with onboarding and retention strategies and prevent the customer from switching to your competitor.
Improve customer service
One of the biggest reasons customers leave is bad customer service. According to to research, poor customer service is the number one cause of customer churn. Another research validates this claim. He discovered that 70% of customers leave due to poor customer service.
Using big data in marketing can help improve customer service and reduce customer churn rates. Chatbots are one of the main applications of big data to improve customer service.
Businesses can use chatbots to automate conversations with customers. They may be used in marketing campaigns involving customer responses. Likewise, chatbots can respond to customer queries and provide solutions to their problems instantly. This reduces the wait time when connecting with a human customer service employee.
Additionally, chatbots can also help businesses reduce operational costs and eliminate human error.
Predict customer behavior
Data analytics methods, such as predictive analytics, can play an important role in reducing customer churn rates. Big data collected from various sources helps build a customer profile. Different data parameters, such as the customer’s historical purchase data, are fed into machine learning and AI business analytics tools, which then analyze the data to predict future customer purchases with great accuracy.
This can help marketing teams create better marketing campaigns to sell, resell, or sell their products and services, while reducing the risk of the customer ending their association with the business.
Top Tech Companies Using Big Data in Marketing
The use of big data in marketing has proven useful for large, reputable companies. Let’s look.
Arguably the king of OTT video streaming platforms uses big data to improve services and customer relationships. The biggest use case is providing customers with data-driven recommendations that keep them hooked on the platform.
The e-commerce giant leveraged big data analytics to improve personalization and customer satisfaction. Now you know why you get recommended products that you end up magically buying.
Airbnb uses big data to gather essential information, such as guest stay preferences, budget and destination, to improve its marketing strategies.
Companies that use big data in marketing and sales operations are guaranteed to see success. They are more likely to retain existing customers and reduce churn rates. Moreover, the use of big data in marketing can also help attract new customers, which will lead to further business growth.
Big Data can completely transform the outlook of the marketing team. The possibilities are truly endless when using Big Data in marketing.