To get more competitive advantage out of leveraging customer data, companies need to promote a cultural and organizational change, not simply invest in technologies.
Over the past few decades, investing in collecting and analyzing big data has represented a must do for every company. Common wisdom held that this could lead to higher performance in every organizational sphere, enabling a transformation of the business model and guaranteeing innovation in an organic way. Based on this assumption, many organizations believed that all they had to do was to advance the technology front, without making any cultural or organizational changes.
But substantial managerial research and reams of case studies show that the serious, widespread effort we’re seeing in the technological sphere does not go hand in hand with decisions that are higher quality or more effective. And outcomes are unsatisfactory as far as business performance too. So, enhancing our understanding of how big data investments can morph into competitive advantage has become a priority for scholars, practitioners and organizations alike.
Our recent study attempts to bridge this gap by exploring the processes that organizations can use to guarantee tangible commercial advantages so that their big data investments pay off.
Our initial aim was to define a certain number of relevant marketing affordances for companies, i.e. specific, concrete action possibilities enabled by investments in big data technologies and analytics. Customer behavior pattern spotting, real-time market responsiveness, and ambidexterity, in other words, being capable of exploiting customers and consolidated markets while exploring new ones: these are the three affordances we identified that produce the best results at an organizational level. In fact, associated with these affordances are more sizeable returns on investments, obtained both directly, i.e. by upgrading operational efficiency, and indirectly, serving as drivers for developing new offerings or redefining the customer experience.
Customer behavior pattern spotting allows organizations to boost the effectiveness and efficiency of their marketing activities, and market responsiveness means being able to react to events with minimal time latency, to get an edge over the competition. Last comes data-driven ambidexterity, which enables companies to improve their ability to identify new market opportunities while leveraging on their current offer.
Our conceptualization is confirmed by data analysis from interviews and multiple surveys with over 400 managers from Swiss and Italian companies. Thanks to investments in big data, in fact, the companies actualize the three affordances in question, perceiving all the potentialities and incorporating these actions in their structures and processes.
An additional aspect we analyze in our study is the central role of service innovation, realized through investments in big data, marketing affordances that can be generated by big data and business performance. In fact, our findings highlight that the impact of service innovation on competitive advantage in data-rich environments leads to better, more personalized services, which companies can utilize to build deeper, more lucrative relationships with their customers through data-driven marketing actions. This in turn enhances the competence of the organization as far as service innovation, in such a way that the benefits of big data investments and in the relative affordances accrue as the company continues launching new services. And this is even more noticeable in industries that are already highly digitalized, where investments are powerful drivers of differentiation and customers are more sensitive to offerings that incorporate a hefty dose of digital innovation.
So as we can see, technologies linked to big data generate the possibility for marketing actions that can reshape the entire competitive landscape. This prompts companies to make constant, targeted investments and, more importantly, to make a cultural and organizational change that can turn the potentialities of big data into valuable insights.
Managers must be aware that the opportunities arising from big data do not depend on their volume or variety, but instead on the organizational ability to actualize their action potential. This is why it’s essential to first identify actors within the organization who are in the best position to realize marketing affordances, and then give them the responsibility to act.
On one hand, investing in data analysis and data gathering technologies enables companies to spot patterns of customer behavior, ensuring that members of the organization optimize budget allocations for marketing activities. On the other, companies can innovate their services, internal processes, and the overall customer experience.
Further progress in this direction could be made by analyzing big data investments and affordances at an individual level (relative to each decision-maker, for instance) or at a team level (such as the entire marketing team). The aim here would be to collect more granular information and come to a deeper understanding of innovative development paths.
Strategic innovation in the digital era will improve the ability of any decision-maker, including those with limited knowledge of data analysis, to make informed decisions using data.
A journey through the digital revolution to learn how to capitalize on these enhancing technologies to gain competitive advantage in existing and new markets.
Ottimizzare la gestione di un ampio portafoglio clienti attraverso l’uso intelligente di diverse tipologie di dati, algoritmi, sistemi di CRM e sistemi di monitoraggio.
