Big Data and Little Data Can Give You a Competitive Advantage

Big Data and Little Data Can Give You a Competitive Advantage
Part One: Big Data

Much has been written about Big Data. For the past several years, it’s been a hot subject, thanks to new technologies that allow us to obtain large amounts of information about our customers’ buying patterns, behaviors, etc. Used correctly, it will help you spot trends and make big-picture decisions.

The definition of “Big Data,” according to Wikipedia, is a collection of data so large and complex it becomes difficult to process. However, many companies embrace a different concept of Big Data. While the collection of data is broad, based on a large amount of information and customer feedback, these companies are able to filter through it to understand general customer behavior and trends. That last sentence, by the way, offers the key – start with the end in mind to determine how to collect and put the data to use. For Big Data to be effective, you must be able to answer the following questions:

  1. What data do you want? – Ah, this is the big question. With all the data that is available – and there is a lot of it – what is most relevant?  What data is usable?  If you’re not careful you will have so much information that you will develop “analysis paralysis”.
  2. Why do you want it? – You may know what data you want, but why do you want it?  What are you trying to achieve from the effort you are going through to get it?
  3. What is the benefit of the data? – This ties into question No. 2. Once you know why you want it, you must be able to clearly articulate the benefit of having it.
  4. Once you have the data and know the benefit, will you be able to execute on it? – Just having the data is useless. Knowing what you want, why you want it and the benefit to having it are useless if you can’t do anything with the data.
  5. When can you execute? – If too much time goes by, the data is outdated and may be useless. All the effort to obtain the data will have been a wasted effort. Once you know what you want and why you want it, if you get it, will you be able to execute your objective in a timely matter?

The bottom line is that you need to know what information is important to have. Cut through the clutter and get to what’s most important. And, once you have it, you need to know what to do with it. In other words, you need to know how to use it to make a difference.

Part Two: Little Data

“Little Data” refers to collecting information about individual customers or smaller groups of customers. Rather than using this data to spot a trend, the company uses the data to customize the customer experience.

For example, a car rental company knows from a customer’s past rentals that he likes a large SUV – even a specific color. That data is collected every time the customer rents a car. The pattern shows the customer’s preferences.

Sometimes data is collected using very unscientific methods, like good, old-fashioned recognition. The host of a restaurant may recognize a guest and know that guest’s favorite table and server. That information is used to customize and enhance the guest’s experience.

Frequent flyer programs track specific customer’s preferences. Hotels have similar programs to do the same thing.

Two questions to ask:

  1. What information do you need from a customer to offer a customized experience? – Airlines know what seat passengers like to sit in (aisle or window). Car rental companies know what type of car the customer likes to rent. A hotel knows what type of pillow a customer regularly requests. A distribution company knows the shipping method its customers prefer.
  2. How do you capture and record customized information? – You know the information you want. How do you get it, record it, and then access it to use it during future transactions?  You must have a system. You can use CRM software to record customer preferences. The key is to get your people to notice the information and use it to create a personalized customer experience.

Any company can make decisions about its business based on general feedback and trends. But at the same time, the best companies also recognize that customers are not numbers or anonymous groups of people. They zero in on an individual customer’s needs, preferences, likes and dislikes, and give the customer an experience that is exactly what he or she wants based on specific buying patterns. The result is repeat business that can ultimately lead to customer loyalty.

Conclusion:

Big Data gives you trends to make major decisions. Little Data gives you information to keep your best customers coming back. It’s that simple, and the best companies take advantage of both!

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