Remember a time in the not-so-distant past when small businesses knew their customers so well that they could almost predict when they would be visiting a store and what they needed? As stores got bigger and online shopping started gaining traction, many businesses lost the ability to deliver that personalized customer experience.

But Big Data is giving organizations the opportunity to turn the clock back to a time when businesses really knew their customers and were able to create an intimate customer experience. "In order to stay competitive, retailers need to go back to that one-on-one experience of the past," Bill Gray, chairman of Loyalty Lane, says. Scott Schlesinger, vice president and head of business information management at Capgemini North America, notes that retailers are leveraging both structured and unstructured data to obtain "truer insights" on customers' opinions and behavior.

Zubin Dowlaty, head of innovation and development at Mu Sigma, argues that the vision of using data to recreate the intimate customer experience that was prevalent in the past predates the Big Data buzz. "Big Data is an enabler, and we're only just getting started," Dowlaty says. But according to Kip Wolin, senior principal consultant at NewVantage Partners, Big Data is allowing organizations to bring together contextual information from different channels, including Web, email, call center, and in-person interactions, understanding sentiment and helping to identify customers through a series of actions.

Loyalty Lane's Gray says the first step in getting to know customers is through their shopping history. "It's easy to scan years of basket history," he says. Organizations can use this information to send relevant offers to their clients, which also helps keep the company top-of-mind with shoppers. Gray says several businesses are using loyalty and reward programs to get customer data, allowing them to reward their most loyal clients. "People like to be rewarded for their loyalty," Gray says.

However, retailers should steer clear of blanket offers and instead reward their customers with relevant items. "The days when [it was acceptable] to blast the same message to everyone are over," says Paul Rosario, presales manager for North America at Emailvision. "Nowadays, if you start blasting messages, you will alienate customers."

Instead, retailers need to make sure that their messages are relevant to their customers. Rosario says a shoe retailer keeps track of its customers' shoe size and sends them email offers when the company wants to quickly sell footwear of a particular size to make space for new stock. Venkat Viswanathan, CEO of LatentView Analytics, uses the example of British supermarket Tesco, which sends its loyalty card members offers depending on their buying habits. "They personalize their recommendations to the customer's lifestage," he says. However, organizations should be able to create an intimate shopping experience even for customers who are not loyalty card holders, Viswanathan argues. In fact, savvy businesses are using transactional data to create customer profiles to reach out to clients immediately, even before they have logged into their account online.

Providing customers with added value

Regular customers are an important asset to any organization and businesses need to put efforts into making them feel special. One way of doing this is by knowing these customers and their preferences and making sure that each interaction is targeted specifically to them. Customers appreciate relevant communications because they provide something that they consider valuable. For example, a retailer might alert its customers about an offer on a product they normally buy, allowing them to save money on a regular purchase. Jay Henderson, strategy program director at IBM urges organizations to think about the value that they're providing customers in exchange for personal data. "If you're going to collect a piece of data about a customer, make sure you provide him with something valuable in return, for example a coupon on his birthday," Henderson says.

Members-only sales site Ideeli uses customer data to tailor its communications, making sure that each of its members receives information that's relevant to her purchasing habits. "We know what pages a customer visited, what emails she opened, and what she clicked on. Together with purchases, this gives us a picture of our customers," says Mark Uhrmacher, the company's chief technology officer and co-founder. Relevant communications have proven beneficial for Ideeli, especially when the company alerts customers that a sold-out item they had expressed interest in has become available. Uhrmacher says this very targeted outreach multiplies the value of such emails ten-fold. Further, once they're already on Ideeli's website, customers tend to purchase additional products. "For every dollar used on waitlisted products, customers tend to spend another 70 cents on something else," Uhrmacher says.

Mistakes to avoid

While sending relevant information is essential, experts argue that being too targeted might appear creepy to customers. "There's a fine line that shouldn't be crossed," Emailvision's Rosario says. "Businesses need to exercise their judgment to make sure they don't overdo it and alienate their customers," Viswanathan agrees.

The risk of appearing intrusive increases when organizations use external data, for example from social channels or browsing history, to glean a better understanding of their customers. "You need to get users' consent before using their data," Viswanathan says, adding that it will take a long time to reestablish lost trust. Wolin says while organizations have the tools to identify customers through cookies and phone identifiers, they should be wary of using the information. "Earning and maintaining trust is paramount and you need to give customers the ability to manage the data that's available on them," he says.

Additionally, Wolin argues that organizations need to make it clear that they're taking measures to protect their customers' data since there's so much concern about privacy. "Make it clear that everything is well protected," he says.

Further, even relevant communication can get tiring if there's too much of it. "Don't exhaust your list," Rosario warns, adding that this could lead to customers ignoring messages or unsubscribing from email alerts.

 While having data is imperative to create an intimate customer experience, IBM's  Henderson says several organizations focus exclusively on capturing and storing Big Data and then fail to make it actionable. Experts recommend starting to use the data that's already available before moving on to collecting more. Schlesinger adds that the complexity of data is also causing issues for organizations, which need to find a way to collect, organize, and derive value from external data, including social media, the Internet, and third-party data, and then marry it with internal data.