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‘Many challenges to using big data’
January 27, 2017 News big data Marketing

 

Rajkumar Venkatesan, Professor of Business Administration at the Darden Business School, University of Virigina, is an expert in customer relationship management, marketing metrics and analytics, and mobile marketing. His work and research is focused on customer lifetime value (CLV) and on developing customer-centric marketing strategies that provide measurable financial results. cat.a.lyst caught up with him in a telephone conversation when he was in India recently. Excerpts:

Discuss marketing and the buzzwords today are big data and omnichannel. How do they relate to CLV?

There is much opportunity but the value depends on how firms can connect big data to strategic initiatives such as brand building, product design, retention. Information sharing and coordination between the analytics groups, the marketing, strategy, finance, and the operations groups is necessary.

How tough is big data to use?

I have been trying to research firms big and small across many industries. The difference between companies that leverage big data well or not has to definitely do with senior management emphasis or use of data for decision-making. There are many challenges still.

Firms that have been successful in the past without big data are finding it difficult now. The employees always view the uncertainty in the future with a lens that requires no data or analytics and think they can continue to succeed without analytics. That’s a big challenge to overcome. They tend to not use it when there are complex problems. They need to break down big problems into smaller ones. Some can be solved with big data, some without.

Big data throws up an enormous amount of information. Is it all useful?

You have to see whether data gives you new insights. For example, with Airbnb, the reviews rather than the star rating of the properties are more important. That’s what people are actually reading. The sentiment inside the text is useful. CLV is one project within this scheme. You have to invest in retention and design. Product design is important for customer retention. Returns can be measured on CLV. Amazon and Netflix, for instance, can invest in recommendations for films, or other products you can buy. Investments in those recommendations are justified if the retention rate goes up. That’s where it connects back to strategy resulting in value for the company.

What do you think of Indian companies in this regard?

We haven’t done much research within Indian companies yet. Analytics and IT companies are building the software for companies that are customer-facing. More and more companies are looking at total lifetime profits that include both retention and acquisition. What’s important is profitable relationships.

Rajkumar Venkatesan, Professor of Business Administration at the Darden Business School, University of Virigina

This article was originally published on www.thehindubusinessline.com and can be viewed in full

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