TechnologyAdvice caught up with LoyaltyGames 2014 World Finalist, Mayur Kapur, to talk about the role of “Big Data” in Customer Loyalty. With the use of software like Heap Analytics gathering useful information about your customer base has never been easier. In this Q&A session, Mayur speaks about how big data and loyalty are related, what big data strategies may or may not work in loyalty Programs, and the future of the exciting industry. Here are some highlights from the interview:
TA: There is a lot of buzz around “Big Data.” Can you start by briefly defining your definition of “Big Data”?
Kapur: Big data is basically a term used to refer to data sets so large and complex, that they cannot be analyzed using traditional data processing systems. When people talk about Big Data, they often refer to the 3 Vs as a means to describe it –Volume, Velocity, and Variety.
The best example I can think of to quickly explain what big data means (in the context of loyalty) – is “tweets”. Let’s take tweets about the company Starbucks. There are tens of hundreds of tweets that are being posted about Starbucks at any given time (“Volume”). Starbucks needs to have sophisticated technology in place that can crunch data from all these tweets super-fast, in a real-time manner, QUICKLY (“Velocity”) if it wants to generate meaningful insights about what people are saying NOW about its products / brands / service, so that it may incorporate the feedback immediately to improve its loyalty programs (Time is Money!). Finally, the tweets people are posting could take any form – phrases, pictures, emoticons…all of which points to the sheer “Variety” of data out there.
TA: What is the link between big data and customer loyalty?
Kapur: To me, customer loyalty is basically about understanding your customers’ needs and/or buying behavior and acting on the same to maximize mutual benefit. And if you look at big data, that’s one of the most powerful tools out there that can be used to achieve this, i.e. to really understand your customers and their needs (both spoken and unspoken needs) by analyzing data about their buying behaviours. It’s as simple as that. If you understand a customer’s needs, you can convert them into a loyal customer. To do this you should visit a site like https://www.salesforce.com/products/service-cloud/what-is-customer-service/ to find out all about how to keep your customers satisfied!
TA: Can you give us a real-life example of a case where big data was used to improve a loyalty program, with tangible benefits?
Kapur: There are many. I recently read a case-study about Denihan Hospitality Group, which owns and operates boutique hotels in NYC, Chicaco, Miami and Washington DC. The Group successfully used big data Analytics in its loyalty program to fine-tune its marketing campaigns for individual customers, resulting in a 300 percent RoI.
It was able to do this by combining insights from both structured data (such as length of customers’ stay, spend amount, etc.) and unstructured data (such as customer reviews, social media activity, etc.) to come up with actionable insights that supported its loyalty initiatives.
TA: Thank you for sharing that. It’s clear businesses increasingly use big data to enhance their loyalty programs and marketing campaigns. Can you talk about how these trends that are impacting companies?
Kapur: I can think of 4 important trends:
Firstly, the explosion in data is leading to generation of lots of “relevant data” that marketers can use for improving their loyalty programs, e.g. – Think about “location-related” data. Marketers can send SMSs with targeted offers to customers who are at or near a point-of-sale. What’s really cool is that they can customize these offers for each and every close-by customer, based on real-time analysis of the past purchases of each customer.
Secondly, a lot of loyalty programs today are still about giving away monetary incentives to current or potential customers to influence their purchase behavior. What’s exciting about big data, is that analysis of large volumes of customer purchase data could actually uncover hidden or underlying motivations that lead to certain kinds of purchase behaviors, which in turn could help marketers come up with cheaper— yet more effective— ways to build loyalty in their customers. This has the potential of significantly increasing the ROI of loyalty programs, since there would be an upward push on revenues, and a downward push on costs
Third, another advantage of big data analysis is that it will make “test marketing” of new products, ideas and concepts, much more faster and more focused. Which in turn will help companies’ loyalty programs. “Faster” – naturally, because we’re talking about the capability to process huge volumes of information in a short period of time to draw meaningful insights, and “Focused” – because rather than spend a whole lot of time, energy and money exploring tens of different ideas, products or concepts, big data analysis could actually tell Companies which are the 1 or 2 the most exciting opportunities and trends out there that should be getting their attention.
Finally, I think the marketing automation space itself will evolve to accommodate the changes happening in the big data & loyalty space. Right now, marketing automation software seeks to automate primarily the “transactional” elements of traditional marketing (such as lead management at a very high level). Going forward, I see marketing automation software “moving up the value chain” to automate more value-added marketing activities.
Expert Interview Part 2: How Big Data is Shaping Customer Loyalty and Marketing Strategies (coming soon)
Mayur Kapur was ranked Top 12 in the World in the 2014 Loyalty & Gamification World Championships (www.theloyaltygames.com), which saw participation from 1500+ professionals and students from 100+ countries. In addition to his day-to-day work which primarily focuses on Management Consulting and Corporate Strategy design & implementation, he takes active interest in Loyalty, Big Data and Gamification trends / issues. Mayur can be reached on LinkedIn at www.linkedin.com/in/mayurkapur and on Twitter @mayurkapur
This interview was provided by Loyalty Games media partner TechnologyAdvice, an Inc. 5000 company that connects buyers and sellers of business technology through meaningful relationships. Interview conducted by Clark Buckner.