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Big Data in Customer Management: Moving from Hype to Success Requires Focus on Use of Data, not Volume (Part 1 of 3)
Omer Minkara
MAR 21, 2013 08:00 AM
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We've witnessed the rapid emergence of the term "big data" as a key technology trend in 2012. There is no shortage of insights and conversations that focus on the importance of big data and best practices to leverage big data as a key business differentiator.

In this three-part blog series, I'd like to share my perspective on the importance of big data as it pertains to customer management. This first blog entry is dedicated to understanding or defining big data, specifically, as it related to customer experience management.

What is Big Data in Customer Management?

Organizations use numerous types of information (e.g. customer, operational and financial) to run their strategic and day-to-day activities. These include customer (i.e. customer purchase history), operational (i.e. inventory levels) and financial (i.e. accounts receivable) data.

In order to manage customer interactions, companies need to have a unified view across different sources within the enterprise. This helps organizational stakeholders (e.g. marketing managers or contact center agents) with numerous activities such as generating visibility into the needs of specific customers, tracking order history or billing and collections activities.

From the perspective of customer management, I define big data as a paradigm that refers to the continuous growth of structured and unstructured information collected across multiple channels, and the associated challenges impacting companies' ability to utilize these insights within their CEM activities.

The primary challenges associated with "big data" in customer management are two-fold:

  1. Adoption of multiple channels in customer management activities. Aberdeen's March 2013 "Next-Generation Customer Experience Management" study shows that 65% of businesses today are using at least six channels (e.g. web, social media, email and call center) to listen and engage their buyers. As companies are increasing their adoption and usage of additional channels in CEM programs, they gather a wealth of customer and operational intelligence through these touch-points leading to constant growth of data. This challenges companies to streamline their data capture, storage and analysis capabilities as the types of data captured from each channel are not always standard. The pressures related to drilling-down to the insights hidden within unstructured client data is one the results associated with multi-channel CEM programs — one that is further explored in the bullet point below.
  2. Growth of unstructured data: While business intelligence tools enable companies to streamline their analysis of structured data, the advent of additional customer interaction channels gives rise to increasing unstructured information within companies. Sources of unstructured information include customer or company-created social media content (e.g. tweets or Facebook posts), video and live chat session scripts. Let's take social media as an example of the complexities associated with utilizing unstructured data in CEM programs. The "Next-Generation Customer Experience Management" research report shows that 66% of businesses today are currently using social media as a channel to listen and engage their customers. There is significant value in mining the insight driven from social channels, however all of the data available is unstructured. As such, companies need to tailor their data capture, cleansing, storing and analysis processes to accommodate the need to analyze socially-generated unstructured intelligence. Without tools to manage unstructured data, the analysis would consume significant organizational resources (i.e. work hours) to query large amounts of data and seek trends and correlations to manage CEM programs.

So far, this blog series has addressed what big data is from the perspective of customer management programs. Next week, we'll discuss if and why big data is important when managing the customer experience. Stay tuned.

Omer Minkara
Research Analyst, Contact Center
Customer Experience & Service Management

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