In business, Big Data has become the buzzword on every marketer's mind. From analytics to email campaigns, this incoming onslaught of information has the power to impact strategy at every level within an organization. But, as is the case with most brands, bigger isn't always better.
New channels and technologies, combined with the explosion in data generated by consumers' everyday activities, has companies across industries fixated on Big Data because they see it as a potential way to gain the competitive advantage in the marketplace. Most recognize the fact that, if they know their consumers better than the competition knows them, they can actively work to increase engagement by initiating more relevant conversations, offering more attractive value propositions, and doing a better job managing relationships over the customer's lifetime.
However, with Big Data comes big responsibility. Companies often bite off more than they can chew, causing them to drown in data that fails to advance their goals. Many claim to be data rich and information poor, acknowledging that they cannot extract actionable insights from the data collected, yet such brands still believe the Big Data bandwagon will inevitably bring success. They fail to look deeper and embrace the small data points that offer granular insight into consumer behavior.
Small data typically refers to traditional structured data-information that has been at the heart of one-to-one customer management for decades. Points include personal attribute data (demographics), transaction data (product purchases, membership registrations, monetary exchange), and interaction data (non-monetary, Web visits, contact center calls, store visits, online inquiries). Such information allows companies to observe and understand each consumer action and how it impacts both relationships and the brand's bottom line.
"Small data is the data that comes from various data sources and channels-whether it be social, transactional, or location-based-that can be coupled with Big Data to inform marketing and buyer decisions," says Jonathan Moran, senior product marketing manager for SAS Customer Intelligence. "Small data is created very frequently and can come from sources like a tweet, a check-in, or even a check-out. Small data is where the most value lies because of the detail it provides. Marketers often prefer small data because this data helps to round out the customer profile. A richer profile naturally provides the ability to deliver a more anticipated, relevant, and personalized campaign that improves the customer experience."
For brands looking to cultivate personalization and relevance, small data emphasizes the importance of each minute interaction and how every touchpoint has the potential to strengthen long-term loyalty. But, as Chrissy Cowell, manager of the WFO Solutions Group at inContact, highlights, analytics isn't about size; it's about finding the right data. Every customer interaction has value from an intelligence perspective, allowing the given organization to better understand customer needs and determine which data points matter most so they may apply the insights necessary to improve business.
Small data, in combination with the emerging channels and platforms of today, offers an inside look at the evolving consumer landscape and encourage brands to ask the questions to which they may otherwise not know the answers:
- Geo-location: Where have customers checked in or transacted?
- Sentiment and Influence: What are customers saying about the brand on social media?
- Website and Social Platforms: How do customers interact with the brand's digital channels?
- Device: What gadgets are consumers using to interact with the brand and which devices are they using at what points during the research and purchase process?
By embracing this granular data, companies can begin to create a more intimate image of the consumer and alter their strategies to meet the needs of those that bring the most value to the organization. Yet, Chuck Dulde, vice president of sales enablement and customer value at SAVO, admits that, while there's plenty of data out there, not all points lend themselves to the customer side of the company's operations. Essentially, it comes down to looking at all the touchpoints within the context of the customer experience and how consumers respond to each form of outreach. Doing so will enable companies to determine which channels deserve the most attention so they can begin connecting and conversing with consumers on a regular basis.
"By having a one-to-one dialogue with a consumer in a private conversation, you can deliver highly differentiated messages and offers that will appeal to the individual," says Don Ryan, senior partner at TeleTech. "This enables a company to allocate its marketing resources in proportion to the expected value of each consumer. Furthermore, by using small data in a controlled, measurable environment where scientific methods of inquiry can be used, a company can assess very quantitatively what works and what doesn't and adjust their marketing strategies accordingly over time."
Ryan believes that, the best way for businesses to produce sizable gains is to integrate a variety of disparate data sources to create a more holistic picture of the customer and their activities. By doing so, companies will be able to differentiate their marketing programs, customize communications, vary treatment strategies and product offers, design more appropriate customer experience protocols that will elevate customer satisfaction, induce greater customer spending, and increase loyalty. Ultimately the end goal is to create a more pleasant and satisfying customer experience that engenders repeat business, greater profitability, and new customer referrals, and with more detailed insight comes more value.
Because today's consumer can often become an afterthought when it comes to formulating strategies, the personalization of small data enables companies to market to a segment of one, for such individualized and relevant communications encourage retention. Big Data may attract attention, but small data has the ability to qualify and quantify that interest in ways that enhance and extend customer loyalty and relationships at the granular level.