According to a recent KPMG survey of 144 CIOs, 69% stated that data and analytics were crucial or very important to their business. However, 85% also said that they don’t know how to analyze the data they have already collected and 54% said their greatest barrier to success was an inability to identify the data worth collecting.
In short, many businesses have simply bit off more than they can chew when it comes to Big Data.
And with all the hype surrounding Big Data Analytics - the small data, data that is small enough size for each of us to understand – often gets overlooked. While there is no debate that big data analytics can provide a wealth of valuable information to a business or organization – it is the small data – the actionable data - that provides the real opportunity for businesses.
Think of it this way. Big Data analytics can provide overall trends – like how many people are purchasing “x” between 5-8pm, while small data is more focused on what you are buying between those same hours.
According to IBM, Big Data spans four dimensions: Volume, Velocity, Variety, and Veracity.
- Volume, of course, defines the amount of data
- Velocity defines real-time processing and recognition of the data
- Variety is the type – both structure and unstructured and from multiple sources
- Veracity is the authenticity and/or accuracy of the data
However, small data adds a fifth dimension: Value. Small data is more focused on the end-user – what they do, what they need and what they can do with this information.
Small Data vs. Big Data
The key differentiator between big data and small data is the targeted nature of the information and the fact that it can be easily and quickly, acted upon.
Individuals leave a significant amount of digital traces in a single day. From check-ins, to Facebook likes and comments, tweets, web searches, Instagram and Pinterest postings, reviews, email sign ups, etc., while many businesses already collect significant amounts of small data directly from the customer – such as sales receipts, surveys and customer loyalty (‘rewards’) cards.
The key is to use this information in a way that is actionable and more importantly adds value to both the end user and the business.
Small Data is at the heart of CRM
All of this collected small data is at the heart of CRM (customer relationship management). By combining insights from all of this data, businesses can create a rich profile of its customer and better inform, motivate and connect with them.
According to Digital Clarity Group, there are four key principles for using small data:
- Make it Simple: keep it as singular in focus as possible and use pictures charts and infographics to convey the information
- Make it Smart: make sure results are repeatable and trusted
- Be Responsive: provide customers with the information they need for wherever they are
- Be Social: make sure information can be share socially
For instance, Road Runner Sports has a shoe-dog app on its website in which it asks a few questions and provides recommendations on which running shoes I should consider. Unfortunately, it provides A LOT of options with no real way to distinguish which shoes are considered my “best” option.
In this example, small data can make a difference is if the app takes into account my previous shoe purchases and my review of those shoes before providing a recommendation. Additionally, if I tend to buy the same brand and their customer service experts believe I would benefit from another brand – perhaps they could offer me a discount as an incentive. Finally, it could limit the number of options by only showing me the highest rated shoes or only those in a specific price range.
Wearables also provide some interesting opportunities - particularly those related to fitness. Combining exercise with nutrition information could possibly yield better results for users. This in turn could keep a user better engaged with both the device and the app. For instance, I am currently training for a ½ marathon; it would be great after a run if my device (based on my workout metrics – distance, speed, heart rate, calories, etc.) offered me some suggestions related to nutrition – such as “be sure to consume ‘x’ amount of water, protein, carbs, etc.” within 30 minutes. Or perhaps, based on my food log – make sure I am consuming the right amount of food based on my level of exercise.
Finally, how great would it be if every time you call into a customer help desk – they have a record of your past calls, tweets or message in Facebook – so the CSR could quickly state “I see that you have called about ‘x’ issue multiple times – are you having the same issue or is this a new issue?” This simple step could easily diffuse an angry customer and go a long way to building trust.
Small data is personal. Small data is local. The goal is to turn all of this information that is readily available into action and improve the customer experience. The opportunities are endless and apply across all industry segments with no business being too small to use data analytics.
And remember that bigger is not always better.