You may have heard the term “big data” and the promises of its valuable secrets, just waiting to be discovered and harnessed.
What exactly is big data and how can it help financial advisors? We came across several posts that do an excellent job explaining the topic.
Volume, velocity, value and variety of data
Pat Allen at Rock the Boat Marketing points to the explosion in financial market data in the last five years and suggests four characteristics to help understand the concept of big data:
- Volume — there is so much data that its size becomes a problem;
- Velocity — how quickly data is being generated and/or changing;
- Value — data should have intrinsic value to justify the processing;
- Variety — breadth of sources and the lack of common (or any) structure.
Myths surrounding Big Data
If that’s what big data is, what is it not? For starters, it’s not big.
According to Sanne Steegstra, in this case the word “big actually means ‘more difficult to access and query than we are used to.’”
Another myth is that big data is a technology thing. It’s not. Big data is about your business model. It’s about how you use data and customer information that you already have.
For the other myths, see: 5 Big Data Myths Debunked.
The last mile of Big Data is small data
There is a whole sub-set of big data that is small enough to be accessible and manageable. That’s the premise of this article from the SmartData Collective. Small data, they say, is “the last mile of big data.”
“Small Data relies on the data you already have in place to help you make smarter decisions regarding your targeting, messaging, and campaign strategies.”
Small data could be something as simple as a list of clients with term insurance policies coming up for renewal in the next 90 days. Or a list of client birthdates.
Big Data and personalization
It should be a relief that big data doesn’t have to big or overwhelming, which is also the theme of this post on the Lander App blog.
The key to leveraging big data in your business is to use that information to personalize the customer experience to your customer’s unique needs. Understanding your customer’s preferences, buying habits and demographics allow you to sell the same product using marketing that is tailored to each customer.
Developing a Big Data plan
Big data “guru” Bernard Marr brings the whole discussion down to earth with some practical suggestions for developing and implementing a big data plan.
Like any other business tactic, you need to start with a clear strategy. Then you need to define the data needed to implement your strategy and put in place the analytics tools to produce actionable insights from the data.