In this special guest feature, Lauren Tucker of Cooler Heads Intelligence provides her assessment for why companies seem to be struggling to adopt advanced analytics and offers her 3 misconceptions fueled by the big data hype. Lauren Tucker is Co-founder and CEO of Cooler Heads Intelligence, an analytics and marketing intelligence consultancy. The consultancy was designed as a crusade to make the power of data science accessible to a wider array of marketers. Lauren has more than 25 years of strategic marketing communication and branding experience.
“I wish I could use data analytics more, but I don’t have Big Data.”
Unfortunately, I hear this a lot. It’s a common complaint that underlies what’s wrong about today’s conversations about data and advanced analytics. The hype around Big Data muddies the waters surrounding data and advanced analytics and discourages many marketers from accessing the power of the Small Data they’ve been collecting for years.
According to Christine Moorman, a professor at Duke’s Fuqua School of Business and director of The CMO Survey, “Companies under utilize the marketing analytics that they’ve requested and have available for decision making.” She concludes, “Analytics remains a distinct challenge for companies – beyond the production of these sophisticated data.”
In 2007, two books, Tom Davenport’s Competing on Analytics and Ian Ayres’ Super Crunchers arrived on the scene, and the race was on for companies to begin using the vast amounts of available data to strategic advantage. For the early adopters, the focus was on financial forecasting and operational efficiency. As they expanded their digital footprint, advanced analytics was relegated to tactical applications, including optimizing user experiences and digital advertising.
Yet, even the vanguard, recognized for competing on analytics, still struggles to adopt advanced analytics as a central decision support tool for addressing the type of strategic marketing challenges that can be successfully addressed by a data-savvy approach.
Why is this? I’ve uncovered a few misconceptions fueled by the Big Data hype that lie at the root of the problem:
Misconception 1: All data is Big Data. It seems that’s all anyone talks about today. All marketers seem to hear is that holy grail is Big Data, the “unstructured, high velocity, zettabytes” that takes a Nate Silver to decipher. No wonder my clients think they don’t have a chance when faced with this avalanche of hype. Fortunately, Small Data, the transactional and customer data they’ve been collecting for years, is structured and more easily transformed into insight and action.
Misconception 2: Small Data equals small insights. This is the real tragedy. There’s real gold in Small Data. Recency, Frequency and Monetary (RFM) analyses can separate the wheat from the chaff in your customer database by delineating high-value and most growable customers from the low-value folks you’ve probably over-invested in.
This analysis identifies the core transactional characteristics of your best customers. Third party databases enhance your data with customer lifestyle and media habits that help your marketing team deepen the relationship with your high-value customers, get more value out of your current customers and find more prospects that look just like them.
Misconception 3: It’s not actionable. This is one of the most insidious misconceptions because it arises from a dark place, namely “we bought an expensive data analytics platform and no one knows what to do with it.” Unfortunately, this is becoming a common refrain and is reminiscent of the days when CRM technology sales got ahead of marketing’s ability to strategically activate it successfully. (I still have clients that prohibit me from using the acronym CRM.)
Much of the Big Data hype is fueled by the legion of technology suppliers eager to sell their SaaS solutions to CIOs who often are disconnected from their marketing counterparts. The result: Marketing’s disillusionment in the technology they believed would help activate data-savvy strategies, but seemed only to siphon off resources from their go-to approaches.
I’m not against Big Data, but these misconceptions keep companies from realizing the power of Small Data and, more importantly, the benefits that come from the advanced analytics that Big Data will require.
Sign up for the free insideBIGDATA newsletter.