The Big Data Formula: BD = C²A²By Michael Toedt - Managing Partner and CEO at TS&C GmbH
What is Big Data? I hear this question almost every day. It is indeed not so easy to explain Big Data in simple words. Although Big Data and intelligent use of data are highly relevant topics and present throughout the media, only a few experts are able to deliver a logical and clear definition.
The Definition of Big Data
A way to explain Big Data is through the 5 "Vs": Volume (data volume), Variety (data types and sources), Veracity (data quality), Velocity (speed at which data volumes are generated and spread) and Value (economic value). The 5 "Vs" illustrate that Big Data is about the intelligent use of constantly increasing data volumes derived from various sources and the generation of value thereof for companies.
Experts define Big Data as follows: Big Data is the intelligent use of data to ensure a sustainable positive impact on economic development.
The Importance of the Human Element for Success
For some people this definition might not be catchy enough. A simpler approach is to put the underlying concept into a formula, derived from the concept of central data management, which is elementary for intelligent data usage:
BD = C²A², meaning: Big Data = Collect * Cleanse * Analyze * Act
What does this mean for the hospitality industry? Data from all phases of the customer journey is collected, cleansed and thus made usable. After that, the data is analyzed to enable decisions and actions based on the gained information. In a hospitality context this means that relevant data is collected, connected and cleansed throughout the phases of the guest's journey, starting with the inspiration phase, followed by the booking and preparation phase, the actual trip to the guest's arrival, stay and departure, ending with the reflection phase and ultimately the transfer to customer relationship management. What sounds quite simple in the beginning turns out to be pretty complex. Big Data requires specific technology solutions, such as a centralized data management system.
The next step is the analysis of the collected and cleansed data. This can be done either automatically or manually using complex algorithms. The human element is very important for success, as data or analyses, which are not questioned and interpreted by experts, can lead to false conclusions. In particular, analyzes of social media data are likely to lead to wrong decisions, as often it is not clear which feedback the data is based on. Is the data really related to the relevant target group? Does the result really reflect the needs of my customers? Systems such as TripAdvisor and HolidayCheck, which are relevant for marketing, are often used and interpreted wrongly. This phenomenon is known as the social media pitfall! Even the best social media analysis cannot replace a questionnaire or on-property customer survey.
Personalized Guest Communication
All departments of a company benefit from centralized data management. The service-related departments benefit from intelligent distribution of information at the point-of-sale. Marketing profits from personalized and targeted guest communication, which ultimately leads to higher guest loyalty.
The biggest impact of Big Data comes from the fact that everything is measurable. With intelligent data management important decisions are no longer based on gut feeling, subjective perception, or yearlong experience. The reason for this is the interconnected approach of Big Data. If all relevant data sources are connected and made available at one central point everything is measurable which leads to complete transparency. A Big Data approach is an important factor for risk minimization and should thus be considered by every company.
Dr. Michael Toedt is the founder and CEO of Toedt, Dr. Selk & Coll. GmbH, a leading Big Data Marketing and CRM company. Operating at the intersection of business and technology, he helps hoteliers with the software dailypoint™ to use the tremendous increase of data in order to become data-centric. Dr. Toedt has over 25 years of experience in operations, technology and marketing. He is the author of several books (among others “Big Data – Challenges for the Hospitality Industry” (2013) and “Data Revolution – How Big Data Will Change the Way of Doing Business” (2014) and his articles are published by journals on a regular basis. Dr. Toedt holds a doctoral degree in management science. He is assistant lecturer at the University of Applied Sciences of Munich for the subject “Customer Relationship Management in Tourism” and as guest lecturer at various universities such as the University of Applied Sciences of Bad Honnef, Kempten or NDS Hôtelleriesuisse. In the past, Dr. Toedt was regional vice president of SANSORA INTERNATIONAL, a subsidiary company of the Schoerghuber corporate group and accompanied many hotel associations during the production of their central customer and marketing data base. He was raised in his parents’ hotel and after completing a mercantile apprenticeship he graduated as cook to be employed in the 5-stars restaurant Hotel Koenigshof in Munich. 1995 he began his business economics studies at the University of Applied Sciences in Munich. During this time he visited the Cornell University, NY and is now President of the German Chapter.
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