Data analytics is a relatively recent branch of science that has applications in a number of industries and businesses. It deals with finding patterns, trends and irregularities in large amounts of data in order to make meaningful decisions regarding businesses, plans of actions, policies, etc. In the field of marketing that has primarily become digital, data analytics present the possibility of novel applications allowing businesses to make key marketing decisions regarding all aspects of marketing programs and communications. It is possible to do so through the analysis of sales and consumer behavior data in digital and physical worlds. Before we look at a few businesses that are using data analytics to achieve important marketing objectives, we must understand the different types of marketing analytics.
Descriptive analytics relate trends over a period of time—what is the number of views on an ad?
Diagnostic analytics look at the “why” behind certain trends—what could have caused an increase in sales this quarter?
Predictive analytics look at shorter time frames to predict certain business aspects—how will a freezing winter impact sales based on the past two winters?
Prescriptive analytics direct courses of action based on data – if the winter this year, based on weather predictions, is expected to be severe, and given the increased sales in last two winters, should we invest in warmer clothing lines?
How Amazon Leverages Data to Achieve Customer Success
Amazon has mastered the act of tapping into customer data and applying artificial intelligence algorithms to it. Amazon collects data in the following forms: a record of online transactions and the collection of a user’s search, location and payment histories. Furthermore, the introduction and increased adoption of Alexa for search queries has allowed Amazon to better engage its customers with the use of catered recommendations, improved customer service and communication on best-selling items, thereby creating a personalized shopping experience.
How Netflix Uses Data to Show Targeted Recommendations
Netflix has achieved billions in revenue based on its use of big data. Netflix’s unique selling proposition is the recommendations it makes to users based on their watch histories and their preferred genres. Netflix claims that almost 75 percent of the viewing activity on the platform is triggered by the recommendation algorithm. But that is not all that Netflix uses big data for. It even comes up with ideas for new shows based on the likes and dislikes of the audience with regard to shows, actors and genres.
How Pepsi Co. is Striving to Achieve Improved Marketing ROI
Pepsi Co. is truly becoming a customer-driven organization by using data to make informed decisions about new product lines and launches as well as to improve the performance of promotions, sales and advertising efforts in hopes of getting better return on investment on their marketing spend.
Prescriptive Analytics Hold the Future
The future of data analytics lies in the use of prescriptive analytics. It is this type of analytics that can help companies, big and small, achieve their marketing objectives. The other types help prepare the groundwork. It is the job of a marketer to seek answers to the right questions in order to achieve the most from prescriptive analytics.
Arslan Ahmed | Contributing Writer