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This week’s SPIE report analyzes another example of how regional and even local businesses, as well as national corporations, are finding a cost-effective way to access Big Data in support of day-to-day business needs and decision making. The report also analyzes the potential pitfalls of such an approach; and what businesses and providers alike need to be considering as they move forward on these initiatives.
Businesses and technology suppliers across the business world are talking about Big Data. Yet, for all the promise Big Data holds—such as staying close to customers in an era when customer loyalty is becoming a thing of the past; analyzing key performance indicators (KPIs) to operate businesses more efficiently; and closing gaps so decision makers no longer have to act on incomplete and otherwise questionable information—Big Data faces big challenges. Primary among those challenges are cost and the lack of a clear return on investment (ROI)—or even a more generalized rationale for why businesses should deploy a Big Data solution. At present, many of the Big Data solutions available from the largest IT and data providers carry pricetags in the tens or hundreds of millions of dollars. That contributes to a pair of phenomena:
• Large Big Data vendors are crafting solutions for the largest enterprises who can afford that kind of sizable financial outlay.
• Regional and local businesses cannot afford these solutions—so, ironically, those who need Big Data the most, to compete with their supersized competitors, can afford it least.
In a recent report, Stratecast analyzed some capable providers offering cloud-based Big Data solutions that are creating serious competition for the entrenched, high-priced vendors.2 However, these cloud-based providers currently control a small share of the overall Big Data market.
Another factor looms large, and may be the biggest challenge: the inability of organizations looking to deploy a Big Data solution, and their supporting vendors, to articulate a clear value proposition to justify the investment. Indeed, as the glut of sometimes self-serving information in this space continues to grow, the notion of implementing a Big Data solution begins to seem less like the essential ingredient many believe it to be, and more of a “nice to have”—or even a pie-in-the-sky illusion that remains irrelevant, or at least out of reach for so many who could benefit from it. However, Stratecast believes there is, has been, and will always be a role for data management in some form. Big Data is not an illusory, non-essential endeavor, but rather, a strategic necessity for long-term business survival in most industries. This was illustrated in another recent Stratecast report that analyzed how Big Data is helping retailers arm themselves for battle with national and even global giants—as well as each other.3 This week’s SPIE report analyzes another example of how regional and even local businesses, as well as national corporations, are finding a cost-effective way to access Big Data in support of day-to-day business needs and decision making. The report also analyzes the potential pitfalls of such an approach; and what businesses and providers alike need to be considering as they move forward on these initiatives.
Small Businesses Face Threats, Seek Survival Through Social Marketing
Small businesses, particularly retailers, are facing these challenges:
• Declining incomes translate into lower consumer spending.
• Consolidation in many industries concentrates more market share in the hands of fewer players; and those who can afford greater access to market data and insight have a competitive advantage.
• Online and mobile interaction with customers generates, by far, the greatest amount of data and insight; but regional and local players often have far less online and mobile interaction than larger national players. This leaves them at a data disadvantage.
• The shift to the user-centered, social Web has transformed consumer usage of the Internet, and created new brand awareness opportunities—but still leaves most businesses on the sidelines when it comes to gaining real customer insight.
• Company web portals and mobile apps are expensive, and increasingly their single-channel, company-specific portals are not aligned with how customers behave online. As a result many companies see less than percent of customers interacting at the company Web site each month.4
• The move from a company-centered to a customer-centered interaction model generates much more granular data on exactly who (even if only in aggregate) is engaging and interacting, on what devices, and how these vary by location and customer segment.
Faced with these challenges, businesses of all sizes are seeking ways to get closer to consumers through new tools and technologies. These new tools and technologies eliminate the traditional high-cost approach of deploying enterprise software; and, instead, generate more interaction and more customer data at a lower cost by participating in network-driven models.
As an example from the retail space, savvy use of Groupon and similar social marketing tools by small and midsized businesses has enabled some smaller firms to generate results that outperformed much larger companies. Small and midsized companies, by necessity, are often open to unconventional and innovative methods that yield breakthrough results with much lower investment. This kind of resourcefulness has enabled them to use Groupon to find new customers—and it is essential, too, if they are to increase engagement and generate insight from existing customers.
Two reasons exist for the growth of social interaction models, and the corresponding decline in traditional forms of engagement—such as direct mail, email, broadcast advertising, print ads, outdoor, and, more recently, Web portals. First, consumers have long since tired of being “marketed at”; and second, they are simply avoiding traditional advertising channels. This is occurring in various areas of consumer life: using DVRs to skip past television commercials; subscribing to advertising-free premium radio and premium TV networks; and looking at their smartphones instead of conventional Web browsers, which can be full of ads and clutter. Consumers are also spending far more time on social networks, as evidenced by the runaway growth of Facebook, Twitter, LinkedIn, Instagram, Tumblr, Pinterest, and others.
Yet, “embracing social network marketing” must mean more than simply running ads via Google Adwords and AdSense, on BingAds, or through ads on Facebook and Twitter. To get away from “marketing at” consumers, companies need new ways to truly engage their customers in a customer-centric model. They need to leverage networking effects to increase their interaction, transparency, and insight for existing customers, rather than serve up the same prompts to try to “pull” customers to the company portal. Shifting to these new approaches is now possible through technologies and models that enable businesses to utilize a social model to increase interaction, and to get levels of insight and data from customers they might never be able to achieve on their own. These new models embrace a no-software approach that reduces investment and time-to-market by months or years, as compared to deploying full-scale Big Data solutions. These tools democratize Big Data so that even small and midsized businesses can participate and benefit. Stratecast believes these new capabilities have the potential to be massively disruptive in terms of business-to-customer interaction and insight, as well as on conventional views of how Big Data will impact the market.
A Replicable Model: All Social Accounts in One Place on XeeMe
Users are beginning to consolidate their social accounts on a single network, in the Cloud. For example, the author of this report has a free page, http://xeeme.com/JEFF, on the network that has become the unofficial registrar of the social Web: the S3-XeeMe Presence Organizer, operated by Society 3 Networks. S3-XeeMe helps a user organize his or her full online presence on a single page. That page is not in some out-of-the-way corner of the Web, such as a relatively low-traffic individual user site; through S3-XeeMe’s broad global presence and connectivity across more than social networks, a user’s page is on the social grid. S3-XeeMe provides social analytics, scores, and rankings to help users assess their social presence.
This model of consolidating one’s social accounts in one place appears to point to opportunity in a number of sectors, including among regional and national businesses that serve anywhere from a few thousand to tens of millions of customers. Stratecast has identified a service that functions in exactly that way: doxo.
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