As part of the Wall Street Journal’s The Experts Blog, I weigh in on what it will take for companies to use data to create a better experience their customers and users.
Realizing the full potential of data will require companies not to focus just on “Big Data” but also to focus on harnessing the tremendous power of “little data.” What’s required is a new mind-set of how data can benefit the consumer first, and then the company.
Today, most companies think of Big Data nirvana as analyzing the massive amounts of information they gather on consumers to optimize things like marketing budgets, pricing, utilization and costs. That’s all great from the company’s perspective, but not necessarily from that of their customer. What they are missing is the understanding that the true promise of Big Data starts with pleasing the user—not exploiting them. Adopting a little-data mind-set means using information about a user’s actions, activities and preferences to enhance that user’s experience—whether it’s online, with a product (physical or digital) or at a retail store.
At a time when consumers are so concerned about their information being collected behind their backs, a little-data mind-set should enable companies to get consumers to volunteer their information. Last year, Nordstrom received complaints from consumers after the retailer temporarily experimented with tracking people’s movements in some of its stores using Wi-Fi signals from their smartphones: consumers objected when they felt the retailer was invading their privacy. On the other hand, no one seems to mind when Amazon or Netflix use information about a customer’s purchases and movements to suggest something else they should buy or watch. The difference is that consumers know that those e-retailers are gathering their information and they are glad to opt-in because it can enhance their experience, versus just benefiting the company’s bottom line.
Those companies that are taking full advantage of little data are personalizing the user’s experience: suggesting other products, providing useful content, anticipating what a consumer wants and making a store visit a pleasure.
In essence, a big-data mind-set-one that is for the company’s benefit—is getting in the way of collecting and leveraging more useful data in a way that consumers will trust, want to volunteer and will view as valuable to them. To exploit the full advantage of data, it’s time to think little, not just big.