There is so much interest right now in the large scale data mining projects known as, “Big Data” that we are getting into a frenzy over the insight that is promised from big data analytics. What do we really think we’ll learn from mountains of data on buyer habits? Well, I want to propose one simple truth about big data. It’s never going to be big enough to solve the problem you have and here’s why.
Is big data analytics, big enough?
Big data collects thousands of data points on each of your customers, from behavior analysis, statistics, demographics, psychographics, etc. So how much is enough to answer your question? The answer is no one really knows. Sure we can get a better prediction from more data, but there is no model that provides 100% accuracy. So knowing that, how accurate do you require your model to be when you’re putting money behind its predictions? Would you put one hundred thousand dollars into a behavior campaign, that had a predictive model that 70% of users followed? Would you change your process if 60% of your customers pointed to a certain behavior? Even if you find two customers with over 100 matching data points, do you really think your messaging could be the same? We believe that people are created uniquely with different makeups, attitudes, and experiences. 100 matching data points could be so trivial when it comes down to who they are. Do we really think we’ll ever know people well enough through data? I think the wool is being pulled over our eyes.
Does this really tell us anything new?
Loyalty and retention are not new topics to business. There are companies that have been doing this for centuries very well. So what do we really need to learn at this point? If there is nothing new under the sun, why are we spending time searching for some hidden insight that will explode the market? Big data promises this big insight, and I have to question the value of this from time to time. Could we really focus on the basics of customer satisfaction and retention, and get it right without the help of a big data analytic adventure? Do you have to be so targeted and personal, if your product is excellent? Are you trying to replace value in your product or service, with more advanced tactics to create appeal in your customer?
I think taking a break from the big data”kool-aid” that everyone is passing around would be a good idea for many marketers. More information can help us make better decisions, but we should focus less on who the customer is, and more on what the customer wants if we are to succeed at loyalty or retention.