Martin Hayward, founder of Hayward Strategy and Futures, argues that too few companies know how to deal with big data.
When I left university in the early 1980s I joined advertising agency Ogilvy & Mather. We used to sit around in planning meetings saying, “If only we knew who was buying this stuff we are trying to sell, and if only we knew which shops they visited, what they bought and when they bought it, which TV programs they watched, where they were at any point in time, what they thought of the brand and who they talked to.”
Here we are 30 years later and we are capable of answering all of these questions. There is a massive amount of data available to help us move from treating people as average to treating them as individuals.
There are many phrases to describe this tidal wave of data. The one I’ve been using for some years is ‘the new oil’ because it’s precious and needs to be located, extracted, and refined.
In my experience, however, big data does not necessarily equal big insight. Data in itself is useless. Insight is kind of useful. If you can do something with the insight, it’s even better. But I’m not sure that many organizations have even made the first step along that journey yet.
We’ve had data for years and, yes, we’re going to have a whole load more, but most organizations aren’t very good at dealing with the data they’ve got already. For example, in the UK, the world of financial services holds the best big data on everyone that has ever been gathered — and has done nothing with it. Only my bank and my wife know how much money I’ve got, but my bank has singularly failed to send me a single relevant piece of communication in the 30 years I’ve been with them.
The reason it works in food retail [with loyalty cards] is you buy 60 things in a supermarket every week. So every week you get 60 data points. Try and apply the same model even to other retail categories and it just doesn’t work. For example, you might go
to a DIY shop three times in a weekend because you’re painting a bedroom, then they won’t see you for two years. So how useful are those three data points? They’re no use at all.Golden age of relevance
Nobody yet has a full big data set. It’s very hard to take what the food retailers have done and apply it to other categories because of the level of interface. Companies that are in good data positions include Google and Facebook because they have such frequent interactions with users, and telcos also have lots of data flowing perpetually.
We could be on the cusp of a golden age of business, having the ability to understand and respond relevantly to our customers like we’ve never been able to before. Competitive advantage will come from analysis, but don’t try to boil the ocean so you’re faced with so much information you can’t make sense of it.
Martin Hayward is former director of strategy and futures at customer data analysis firm Dunnhumby, and now runs his own customer marketing consultancy, Hayward Strategy and Futures. He was speaking at a Fujitsu Executive Discussion Evening in London.