Big data is more than just a big chunk of raw data collected by an organization through one process or another. If stored appropriately and analyzed, it could be an asset to a business and the answer to increased efficiency and better decision making. The business environment is competitive, and for companies to stay at the top, they need to do everything they can to hold on to their glory. Big data has been found to be one of the assets that businesses can use to stay ahead of their competitors. Information collected through big data is analyzed and scrutinized to identify patterns and trending information on the marketplace.
In marketing and leadership courses, managers are taught ways in which they can use data to stand out in the crowd. Today, businesses see big data as a valuable asset, and they use it in the following ways to gain a competitive edge.
1. Predictive analysis
Marketplace events aren’t always in black and white. For businesses to take advantage of unforeseen opportunities before their competitors do, they need to do data mining. Coupled with machine learning and predictive modeling, corporations are able to foresee market changes and behavior. They use historical facts and gauge the probability of past events repeating themselves. Big data provides businesses with the opportunity to prepare themselves adequately for what will come in the future.
2. Detecting scam
One of the emerging issues in the business environment is the rise in fraudulent activities. This has threatened the survival of businesses and also resulted in hefty losses. Fraud comes in all shapes and sizes, and anyone, including the employees, can perpetrate it. Through pattern recognition resulting from the analysis of big data, businesses are able to detect fraud much faster and act.
Machine learning, statistics, and knowledge discovery in databases have gone a long way in helping to detect and prevent fraud. How exactly does this work? For instance, changes in business patterns are indicators of malicious activities. By processing such events, managers are kept on alert on potential risks.
3. Development of new business models
As aforementioned, fraud does not necessarily originate from external sources. Employees and managers, too, can participate in the same. Gone are the days that businesses only depended on due diligence and audits. Big data is widely being used by companies to measure risk. For instance, a bank uses a lot of customer data to measure their credit behavior and assess whether or not an applicant is qualified for a specific amount of loan. This serves as the use of new business models to measure risk, prevent and mitigate it.
4. Understanding customers
Customers do value excellent customer service. That makes customer satisfaction one of the primary objectives of businesses. Customer satisfaction is easier said than done. Companies need to get deeper insights into consumer behavior, and customer needs to be able to decode what they actually want. It is through data mining that businesses are able to establish the kind of solutions that specific customers need.
Customer satisfaction is one of the elements that make a business competitive. Through data mining, companies are able to establish the kind of products specific demographics prefer to interact with. The available data on customers continue to grow every time the business interacts with them. Such data, if analyzed, is able to provide detailed information on every stage of customer decision making. With such insights, companies can come up with strategies that can help win the hearts of the customers.
5. Creation of sound strategies
Data mining eliminates the use of trial and error to identify what works for customers and what does not. As aforementioned, the availability of big data makes it possible for businesses to identify customers purchasing behavior among other useful information. This could be used to come up with winning business strategies. By categorizing the consumers based on their online behavior, businesses are able to identify when best to send them ads and engage them on online platforms.
By observing their consumption patterns, businesses are able to come up with production strategies that will help them meet market demands.
Big data has presented valuable opportunities to businesses across different sectors. Through data mining, companies are able to understand their customers better. Through predictive modeling, corporations are able to create strategies that will help them seize the opportunities lying ahead and also prevent risk through observation of patterns. The importance of big data in creating competitive advantage cannot be overstated.