Both companies see huge value in data-driven personalization.
Big data: Powerful, but hard to corral. So don’t overlook the power of the “small data” that’s easily within your grasp.
Two very different organizations show you how.
Our obsession with big-data analytics comes from our sense that, somehow, “Big Data” will translate into “Profitable Business.” We know that the traditional, intuitive way of doing things that held sway in the past, is now seriously broken.
Big data promises to introduce a bright new age of science to our decision making and business reasoning. Trusting to gut-feel and intuition has been relegated to a distant, superstitious past.
However, the route that takes us from inception to execution is a little less clear.
We’re becoming used to thinking about vast stores of big data, such as demographics and other knowledge that have only recently been tabulated. But data analytics needn’t come from previously untapped resources of massive scale.
The Science And The Magic
Yes, big data works because it injects fresh insights into the operation of a business. You can then make strategic business decisions, based on something other than hunches.
But the application of small data in big ways also holds the ability to convert numbers into real profits. To illustrate the point, consider two large businesses that started from diametrically opposite ends of the big data spectrum.
At one end is Burberry: a 156-year-old, iconic luxury brand. It’s leapt into digital with both feet and open arms.
At the other, Caesars: A $9 billion, privately held concern that holds stakes in casinos, hotels and spas. And they’re all carefully managed through data-driven reports.
Burberry began its path to a data-driven approach in business by doing what traditional retailers do: refurbishing its shops to create a better customer experience.
It also put in screens that connected the shops to head office in order to tighten up internal communications. That led to installing audio-visual customer information screens. That was followed by giving the staff iPads.
It wasn’t long before the company joined the dots. It used social media to engage its target audience, gather information that it then cross-referenced from in-store purchases, and connected it all to the iPads.
The result is that any employee at any store can identify a customer, at almost the moment they walk in. They know what they’ve purchased. They don’t just greet you by name, but also ask if your wife liked the trenchcoat you bought her.
This is the kind of personalization that’s allowed the luxury brand to create a deeper engagement with a type of customer that seeks that very kind of service.
Burberry hasn’t stopped there. It’s launched sophisticated social media applications, launched its Milan and Paris fashion shows on the Web first, and created a mobile experience that reflects its prestige.
It’s now using all the data gathered for analytic purposes. Small data, used in a big way.
Caesars, on the other hand, already had data acquisition channels in place. Analytics was how the company was being run.
But the big data it had didn’t tell the small details. Data were being accumulated in the way traditional profit/loss accounts are.
What it needed was to use it to improve the customer experience. Revamping the company philosophy, it followed a customer from search, via a website, all the way until they appeared at a Caesars property.
Now, regular customers who suffer a losing streak can be given personalized vouchers to a restaurant, or a spa. The business knows when it can extend credit to a customer and precisely when it’s most prudent not to.
The Customer Comes First, With Startling Results
Burberry and Caesars—although starting from opposite ends of the scale—converged on the same space: the customer.
Although very different in detail, they each did it the same way: They played to their strengths, used data to tie everything together, and expanded it to the rest of their business.
The results are increasing revenues and profits—at a time when everyone else is busy lowering estimates and decrying “the tough economy.”
Burberry became the fastest-growing luxury brand on Interbrand’s index in 2012. As its CEO, Angela Ahrendts, recently said:
“Although traffic was down, the quality of our sales was actually improving: We were realizing higher transaction values, better conversion rates.”
There really can be no better recommendation. Big data is a key part of the move to tomorrow’s business. Step one is to store it.
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