Big-data or Big hype?

How I used customer data to improve Dodici wine sales

Many years ago I ran a wine business called Dodici (“12″ in Italian). We sold cases (12 bottles) of Italian wine and arranged winemaker wine dinners for customers. I had under a thousand customers so used a fairly basic database to help determine which customers received which sales and marketing emails, letters, offers. Through telephone conversations with customers and knowing their buying habits I knew reasonably well which products and services they were interested in. For example there was a couple from Norfolk who bought no wine but loved coming to the winemaker dinners in London. There was also a customer who loved off-beat red varieties that 99% of my customers wouldn’t be interested in. The list is endless. All this information was logged onto the database so customer communications were as relevant and compelling as possible. This was “small data”.

90% of the world’s data created was in the last 2 years

THE growth area of marketing these days is “big data”. I receive conference invitations on it, all the major consultancies have large teams assigned to it and corporates are investing massively in staff and IT systems to store, analyse and draw insight from the data they gather or buy in. I read on the IBM website that every day we create 2.5 quintillion bytes of data worldwide and that 90% of the data in the world has been created in the last two years. This data comes from everywhere: posts to social media sites, internet browsing, uploaded videos, purchase transaction records and mobile calls. Making sense of all this digital data to win customers, keep customers and grow sales to customers is why it’s so important to marketers.

Big-data is BIG business

Probably the best know consumer brand in the UK that has been at the forefront of “big data” is Tesco.  During the 1990’s they worked with a data agency, Dunn Humby, to extract insight from Tesco’s clubcard customers to analyse their habits, send targeted promotional offers to customers and sell insight to suppliers.  The service became so important to Tesco that they bought a majority stake in Dunn Humby in 2001 and more recently bought them outright. Sky own a similar business called SkyIQ who work with Sky and dozens of clients in many different sectors.

Some large corporates are investing in Big-data but executing poorly  

Doing consulting and interim assignments in the tv, mobile and online sector and being a customer of many brands, my experience is that the execution quality of “big data” activities is not as good as it could be.

A big subscription brand I’ve been a customer of for many years has a website that when I log on shows me my latest offers. Currently it highlights five personalised offers. The problem is that I already have bought two of the products.

I recently called up Virgin Media, Sky, BT and Talk Talk about switching my broadband service to them from O2. I finished each call saying that I needed to speak to my wife before making a decision. One who said they would email my proposed offer didn’t send the email. Another called back but I asked them to call later on as I was busy. They didn’t call back. One didn’t call at all. Just one called back, so just 25% of my very small sample did as they said even though they all had captured my personal details and needs.

In other companies, large and small I’ve seen a tendency to resort to dumb down “big data” opportunities and send generic emails and tweets rather than exploiting the data available probably because it’s so cheap.

The better surprise and interest me with their offers and propositions

Probably the best large company examples I have come across personally are Amazon and Ebay which regularly surprise and interest me with their recommendations. I also like the Wine Society communications. Their direct mail and emails are timely and relevant. I anticipate that these companies response rates, click through rates, conversion rates, customer satisfaction and NPS rating are better than those companies I described earlier.

I look forward to hearing your thoughts on how well you think companies are exploiting “big-data”.

I’d also be interested if anybody has practical experience of incorporating social media data into a customer / prospect database and how it’s been used to effectively to segment marketing and sales communications?

Thanks for reading

Angus