Navigating Big Data

Tesco famously has ‘segments of one’. Which is lovely of course - but they had to buy a data company just to make sense of the data so they could get there. Most of us don't have that luxury. But it doesn't mean we can or should ignore data, even if it looks like it might become unwieldy.

Some brands haven't yet realised that the power in a brand/customer relationship has shifted from the marketer to the marketee. Clearly however social media and the ability to share every thought, spoken or unspoken, with friends and peers and even the whole wide world means that the brand perception is out in the wild. It's been let loose. No longer is the way your brand is represented in your control. It's in the expressions of passion, ire, indifference and ephemerality of the digital ecosystem: Facebook, Pinterest, Snapchat, Twitter, Vine, even email. It's transmitted by mobile, stored on the web, and available to the world.

Your job as a marketer is to understand that this revolution has already happened. And to take advantage of it. If you can do it successfully you can catch up with the wild thing your brand has become, and even gain competitive advantage while your peers wrestle with boards who just don't get that they're no longer in control.

Scary thought?

So what do you need to do in order to flip the situation around? Well, part of the problem is the notion that we can regain control. I don't think we can. What we can do however is map how consumers behave, and indeed how their attitudes will shape how they behave in the future. By going down this route rather than trying to gather the brand in, you can extend the brand into the customer's territory, give them more control by enabling free interpretation of the brand's essence. And that takes not only courage, but data too.

Customer insight is the product of data. The three dimensions of segmentation (what we call 3D Segmentation) are:

• Demographic - who the customer is;
• Behavioural - what they do and have done;
• Motivation - why they do it. 

Demography is slow moving, so we use it as a kind of snapshot to describe people. It means we can target them accurately. Behaviour is retrospective, but we can observe behaviours and trends and make extrapolations based on probability and this gives us propensity models. This means we can target them efficiently. The final dimension is about motivations, attitudes and 'need states'. Sports brand ASICS leverages this in its MyASICS loyalty programme: by understanding why a runner runs, we can talk to them in terms that resonate… the desire to be fitter, or to win, or to raise money for a cause. By talking to its customers about those things that address their motivation, ASICS creates extreme loyalty, increasing sales. Worldwide. And MyASICS is served by a website, and emails, and mobile. All of which feed back data so we can hone the programme.

These days the various digital channels are so well established that the mechanisms that allow you to track a customer in their journey in one can easily be joined with the mechanism in all the others. It means we can effectively create a joined-up process to track a customer across all digital channels as they weave about their daily lives. This ability extends even to the real world - we work with clients who have incorporated data from electronic point of sale (EPoS) systems into their customer view, so we can attribute till sales to pay per click (PPC) campaigns and journeys via every imaginable digital touch-point.

And it's not that difficult, and you don't need to buy a DunnHumby or a data team to do it. The concept of rapid prototyping has been very successfully applied to creating online customer labs and pilot programmes. For instance, brands like Bupa have used it incredibly effectively to build online communities at very low cost before making decisions about major investment (my agency, Underwired, created Bupa's Carewell using this rapid prototyping approach – saving the client around £150,000).

Forget the Single Customer View and its squillions in Capital Expenditure; rope together several separate systems based only on those components you actually require to do the job of proving return on investment (ROI) and use it to monitor customer behaviour in response to the insights you generate from simple data analysis. In my experience six or seven segments gets the job done - segments of one are for when you're already at the outer extremes of wringing profit from data and not when you're mid-shift towards putting your customers at the centre of the brand universe.

Big Data: Why more data is better for brand loyalty and customer experience

We've recently started talking to a brand which has around 700,000 customers in its database. They have collected lots of behavioural data, by which I mean transactional data - recency, frequency and value (or RFM) - and response data. This response data is all about what happens when the customer is sent a piece of communication, in this case an email. What they do, when they do it, where it leads. Say the database contains 30 fields. That's 21 *million* pieces of information, all tied together to create a big fuzzy room we can in effect walk around, try to make sense of, and manipulate to achieve commercial goals. 21,000,000.

Everyone talks about Big Data as if it were some kind of technological nirvana. The reality is you can gather data from a whole lot of sources and stick it all together more or less by hand, if you need to. In practise, Big Data is shorthand for the notion that if only you could mine, interpret and extrapolate all the data you could get you'd have some kind of joined up living solution to customer engagement, almost a mindmeld between your brand and a collective representation of your customer base in its entirety. Nice.

The reality is that data is an enabler, something you can make use of - not something that should make your decisions for you.

So how does this pragmatic approach work? There are a number of critical steps to take you  from having on the one hand a commercial goal and on the other some customer data. First, make sense of the data. Customer insights start with understanding what kind of data you have. In our CRM terms this information breaks down into three broad groups:

Demographic - who the customer is
- Gender, age, life stage
- Location
- Income
- Status
- Family make-up
- Education etc.

Behavioural - what they do
- What they have bought
- When
- In response to what
- How much do they spend
- How long is their 'customer lifetime'
- What channels do they use
- When do they respond most

You can see already that by combining some of this information you can infer quite a lot about the way you might want to talk to some of your customers. It is obvious that you can start to create segmentation based on demographic and behavioural data. However, this approach to segmentation may help you to be efficient (behavioural) and accurate (demographic) in who you talk to, but it often does not tell you what to talk to them about.

Taking the classic example of customers of a prize-based fantasy football league, segmenting by these two dimensions might lead you an easy segmentation based on whether the customer buys one or twenty teams (behavioural) and jump to conclusions about their financial status (demographic).

3D segmentation adds a new aspect, motivation, to the mix. If you can divine what motivates your customers then you can speak to them using motivation-based segmentation and that may actually provide the cut through that's required in a highly competitive environment.

Motivation - why they do it
- Need state
- Environmental factors

This dimension can change based on changes in the other two dimensions; for example changes in family make-up or life stage may radically alter someone's drivers for engaging with your brand.

In the case of the fantasy football league, by looking not at behaviour or demographics (which didn't appear to correlate) but by motivation, through the simple expedient of a brainstorm with everyone we could find near the meeting room we reached an insight we could test - first by checking the correlation with the behavioural data, second by sending a brief questionnaire to a standard sample. The insight was that customers bought principally because they were either motivated by passion for the game (bought a single team) or by the desire to win the prize pot (bought twenty teams).

By using this simple insight we created two segments serving two types of (relevant) content. These were then split into time-based sets based on where the customer was in the product lifecycle (new joiners, mid-season etc.) so we had six or seven simple segments.

Revenue went up 93% in 90 days. The client was The Sun.

The job of data is not to confuse or confound. The job of data is to allow you to extract simple insights that allow you to run singleminded campaigns that tap into your customers' motivations so that they want to engage with you. As we start to think beyond the age of CRM and focus on rapid growth, it is imperative that Big Data doesn't become an encumbrance. Data should be there to provide insight so you can get on with the engagement - because how you engage with your customers is the only thing that will drive your success.