Big data and customers relationship

In the past, most people buy things at local stores where they live. The owners know customers and they have good relationship, sometime as customers walk into the store, the owner already know exactly what they want and prepare the products the way each customer prefer and they would talk about other things such as the weather, the local market, or family matters etc. Today as more people buy things online or at big retail stores, they do not know the owners but interact with sale persons and these people are often busy, so there is no relationship between customers and store owners. Therefore, customers can buy things wherever they want since there is no loyalty to any store.

With Big Data, things are changing back to the “Old way” of establishing relationship between owners and customers. Today online stores are treating customers like the “Old way” so customers are happy and do not buy from others. Using Big data analytics, online store know exactly what customers want before they even ask for it. The online store provides that same service for customers based on their past buying habit using big data to know more about customers to increase their satisfaction and of course, increase their purchases.

Today online stores are collecting data on customers, not only what they have brought but also what websites they visit, where they live, what they like, and if they put anything on their social media such as Facebook or websites etc. These data are available on the Internet for online stores to collect and analyze. Of course there are many types of data and they are huge (That is why it is called big data). Online stores analyze these data to predict what customers like and give them “special discount” as well as promote certain products via special “Personal advertising” that customers may interested in buying.

Amazon.com is probably the first retail store that uses Big data to recommend books, CD, toys, or things that their customers may like to buy. It started as a store to sell books online but quickly grow into the largest online store in the world that sell almost everything, from clothes to kitchen’s utensils, from laptops to TV etc. The secret formula for its success is Big data analytics that collect everything from customers and knowing what customers want.

Today Big data is becoming the hottest thing for effective marketing and product development. An Analyst wrote: “Random advertising on the Internet is obsolete. Personalized advertising for each customer is the new way. When you go to a website you see many “pop-up” advertises, most has nothing to do with you and you do not pay attention that is why they are ineffective. For example, why men care about perfumes or lipstick advertising when he searches the internet and why women would pay attention on razor blades or videogames? When people search the Internet, they are annoyed by all advertises so companies pay more attention on “effective advertising” that “Customized” to meet each person’s interests. By analyze and extract the most relevant information they can makes a difference for customers and increase sales and profits. When a customer goes to their websites, companies have all the information needed so they do not need to ask questions of the customer because they already know the answers. By providing customers information that is meaningful to them, companies can develop better relationship with customers and having such special relationship, customers are likely to continue to buy from them instead buying from other.

Sources

  • Blogs of Prof. John Vu, Carnegie Mellon University