Tiny Data
Big Data. Can’t stop reading about it. There’s the advertisement in The Wall Street Journal and the conference sponsored by the local university. Your marketing agency has just created a new division to focus on it exclusively, as has your law firm and the company that manages your IT.
Big data is a big deal and it could provide big advantages to the right companies. Who wouldn’t want to mine 500,000,000,000,000,000 data points to determine that your best target is a woman with a college degree, red hair, married to a man she met in chem lab and currently expecting her 2.7th child?
It all sounds great until we figure out that Big Data is for big companies. And it’s not just big companies, but giant consumer companies. For most of us, the number of potential customers is too small or the marketing costs too high to capitalize on terabytes of demographics.
If I’m selling 2 billion units of a product each year to 40 million consumers, data analysis and targeting makes sense. If I’m selling 5,000 units to 60 customers, I can cross the cost/value barrier in 4.7 minutes, give or take a nanosecond.
Still, one can’t help but believe more data would help most of us do a better job. We just need to figure out what information is really valuable—both actionable and profitable—for our specific business needs. How do we begin our search for market insights that will make us more successful?
A good place to start is with some introspection about our products and services. The more we can pinpoint the issues and values surrounding our products, the better we’ll be at identifying external topics—and targets—to be studied. Here are a few questions about products and services that can be useful as we begin the journey:
What product/service is most profitable for us?
- What quotients make it the most profitable?
- Do those quotients determine the success of other products/services, or are they truly specific for this particular offering?
- Does that product/service sale result from or flow from the sale of some other product/service?
- How can we market/sell our gateway product/service to drive more sales of our most profitable offerings…or sell more of the most profitable items without the middle step?
- Is there a link between our most profitable product/service and customer loyalty, referrals or corporate reputation?
- What product/service is attracting customers we really don’t want?
- What is it about that product/service that leads to toxic customer relationships?
- What products/services are unconnected in any meaningful way to the offerings that drive essentially all our profitability? Why are we continuing to offer them?
- What are we promoting that our competitors no longer offer? Are we filling a niche, or have they figured out something we missed?
These are tough questions to answer for any company, and much of the insight that’s required will not be available in the financial reports. Whatever the size of a company’s data set, though, this is an excellent place to begin the search for sustainable growth.
In our next post, we’ll look at some techniques for obtaining usable customer insights about our products/services and value. Stay tuned.
About Michael Rosenbaum
Quadrant Five founder Michael Rosenbaum has walked the walk when it comes to building a business, so he can be a confidant and compatriot—not just an advisor—for clients. Rosenbaum worked his way up to president of a $35 million company with 300 people and 600 clients. Along the way, he managed operations, HR, IT, and marketing, and advised CEOS and CFOs at more than 200 companies.
Beginning as a newspaper reporter, he developed a specialization in business journalism and earned an MBA on his way to a 30-year consulting career. Representing both angel-backed startups and Fortune 100 giants, Rosenbaum identified the patterns and processes that drive success across a wide range of industries and business cycles.
He is well regarded for designing each performance-improvement process around specific client needs, capabilities, and culture, rather than pushing a pre-fab set of rules for clients to follow. He brings a unique set of skills to each engagement, including experiences as a company president, financial journalist, marketer, IR advisor, non-profit founder, author, and public speaker. Items of note include:
• Received the Order of Merit of the Republic of Poland in 2015 for non-profit work
• Honored for the Best Business Biography of 2012 for his fifth book, Six Tires, No Plan
• Frequent speaker on customer relationship value
• Sales instructor for Certified Value Growth Advisor certification program.
• Regional Communications Chair, YPO Gold
• Marketing Chair, AMAA’s Mid-Market Alliance
• Former Chicago Chapter Chair, National Association of Corporate Directors
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