Step aside, Big Data: “Small data” is the hot term in the analytics space these days. Here, experts weigh in on the concept and explain why it’s easier to start small.
The holy grail in marketing is to establish a one-to-one connection with customers—to deliver the most relevant messages and offers possible to each individual buyer or potential buyer—and Big Data can’t easily help you get that personal. Organizations need the ability to collect and utilize each customer’s personal preferences and behaviors. In other words, they need the “small data,” too.
Small data, or “little data,” is defined as customer-specific information, such as a customer’s purchase history and other information on him that’s regularly collected in a company’s CRM, as well as any information on that customer’s preferences and behaviors that can be gathered or gleaned from his technology use—his visits to the company’s website, his social media activity and his trackable behaviors while using a smartphone or wearable tech device. While Big Data combines data from countless people or computer systems and tries to create patterns pertaining to a general age bracket or other segment of the population, small data is personalized data that links directly to an individual, and helps marketers understand the nuanced behaviors and needs of that individual, and react to those needs in real time with personalized marketing messages or offers, says Allen Bonde, vice president of product marketing and innovation at Ontario-based enterprise information management firm Open Text, who researches the use and analysis of small data.
Small data also includes device-specific data—any information that can be gathered from an appliance or machine that’s equipped with a sensor, resulting in localized information on the device’s environment or usage. In other words, small data is the continuous, real-time output of the Internet of Things. “Small data will, essentially, be the operating system for the Internet of Things,” Bonde says. “You have lots of interconnected devices, each of which has lots of local information that, in some cases, is relatively simple,” meaning that small data easily yields actionable insights for everyday marketing tasks, he says.
The trick is to figure out how to marry insights on your target audience gleaned from Big Data with customer- or device-specific information gathered via small data analysis to create the most comprehensive picture of your customer targets. Here are some primary considerations.
1. Define your objectives. Small data allows marketers to take a granular look at current and potential customers, and understand not only what they’re doing, but also why and how they’re doing it. “One type of understanding is customer profiling,” Bonde says. “How do we create a more complete picture of our customer? When you start to answer that question, it informs the larger question, which is, where do you find the right small data to use?”
Adds Gary Drenik, CEO of Worthington, Ohio-based data management and analytics firm Prosper Technologies: “It’s all about being able to integrate different data sources, and then analyzing them against the problems you’re faced with. … Small data is about taking relevant data and running analytics on just [data] that you can use to run your business, to launch or tweak campaigns.”
“Good small data goes beyond surveillance,” he says. “People are messy. They’re hard to figure out, so marketers tend to just surveil and make assumptions from there. What small data does is look at individuals to understand people better. The question that marketers really want answered is not, ‘What?’ but, ‘Why?’ and, ‘Can we change them?’ ”
2. Leverage the information that you already have. “The small data world is all about using the data that you have right now around you,” Bonde says. “Use your own data from sales terminals or hits on your website, for example. … It’s all about using metrics and tools that are understandable by people who aren’t necessarily data scientists or statisticians. It’s the stuff that small businesses have done forever.”
Small businesses have smaller customer bases, so they’re more able to tap into their institutional knowledge of individual customers’ needs and preferences, even doing so informally to better serve each customer—like the proprietor of the corner store of yore, or even the savvy cheesemonger at your local Whole Foods. All companies would benefit from leveraging such customer-specific insights, and can do so if they put together a cohesive small data strategy, experts say.
For example, “A lot of my clients really want to understand whether their digital marketing efforts are having an impact,” says Colleen Jones, CEO of Atlanta-based Content Science, a content marketing analytics firm, where she uses small data to help companies make strategic content marketing campaigns. “Compared to Big Data, it’s easier to get small data reported to marketers and content teams in a way that’s easy to understand and act on” because small data is gathered through information-sharing opt-ins from consumers or B-to-B clients, a company’s standard record keeping and social media monitoring.
3. Start small before you tackle the big stuff. The accessibility and ease of use of small data are great news for marketers who don’t yet know how to navigate Big Data, Bonde says. “Banks, the government and large corporations will continue to invest in Big Data, but a lot of people will realize the value in the data they already have, and visualize it and make it actionable. Embedding it will deliver value much faster than if they had started a Big Data initiative and had to wait years for anything interesting, let alone actionable,” he says. “If you haven’t invested in Big Data and you feel like you’re behind, that’s great because you can get value and useful insight by focusing on all of the small data you already have.”
This article was originally published in the June 2015 issue of Marketing News.