Did you ever get the feeling that most brands are farting in the wind when it comes to their marketing? Every week more and more marketing executives are taken for a ride by people whose only accomplishment is getting people to buy their book. First, it was social media hype, then big data hype. What’s next?
Companies spend less time than ever interacting directly with customers. Rather than offering an easy means of communicating with customers, data has encouraged them to chase quick wins and marginal gains in revenue. This is the dark side to data. A long-term perspective focused on positive customer experience, lifetime value, and sustainable growth has been overtaken by an epidemic of “shor–termism.” Reversing this trend will be essential for businesses that hope to stop simply applying analytics and instead start competing with data.
For sure, keen understanding is a good thing. But hard data and insights alone will only get you so far. What really counts is figuring out how to translate this new knowledge into higher sales and better conversions. In a sense, nothing much matters unless brands can use all of that Big Data to actually attract, delight and retain their customers. So how does this “delight” factor really help brands? The more you give people what they want, the more rewards you’ll see on your websites – think full shopping carts, more reservations, positive customer reviews, and eventually more repeat business. All of that means one thing for brands – more revenue.
There are many problems with the assumptions behind the “big data” narrative (above, in a reductive form) being pushed, primarily, by consultants and IT firms that want to sell businesses the next big thing.
“The information you can extract from any big data asymptotically diminishes as your data volume increases,” wrote Michael Wu, the “principal scientist of data analytics” at social media analysis firm Lithium. For those of you who don’t normally think in data, what that means is that past a certain point, your return on adding more data diminishes to the point that you’re only wasting time gathering more.
So is big data at fault? The answer is no. It’s marketers who are really bad at marketing. Too many MBA types are trying to bring a logical approach to illogical consumers. Let me give you an example…
A CPG brand that I consulted with hired an “inbound marketing” agency to transform their marketing. The problem was that the brand’s customers didn’t have the time to have ANY relationship with the brand. They spent six figures before an executive noticed that sales were still trending downward. So, we did research with prospects and customers and low and behold they just wanted the brand to keep delivering on the brand promise. Budgets for POP and FSI’s were increased while “inbound marketing” dollars were cut. The result? A double digit increase in sales in the test markets.
To me this is marketing 001 but there are a lot of marketers who are reaching for anything to keep their marketing relevant.