Picture Sherlock Holmes gazing at the opera house as he puts together all the pieces of his investigation against the evil mastermind, Professor James Moriarty. All of a sudden, the tiny clues he missed previously fall into place. As he and Moriarty make eye contact, images flash in Holmes’ mind of a newspaper headline regarding an assembly of industry titans at the Hotel du Triomphe, a cart he passed earlier that was delivering a cake to the same hotel – clues that seem so obvious now that he can’t believe he missed them earlier. Moriarty’s bomb wasn’t at the opera. Holmes had been wrong; it was actually at the hotel. This memorable scene from 2011’s blockbuster, Sherlock Holmes: A Game of Shadows, is a great example of the importance of observation. In the world of consumer psychology, marketing and brand transformation, Martin Lindstrom applies the same practice to form breakthrough ideas or completely new ways to turnaround brands.
Martin Lindstrom is a leading consultant to the who’s who of top world brands, the author of six books on branding and consumer behavior including New York Times bestseller, Buyology, and he was named as one of the top 100 Most Influential People in the World by Time Magazine in 2009. Needless to say, he has quite an impressive resume.
Recently, I had the pleasure of reading a pre-release copy of his most recent book, Small Data, which released this week. Through a primarily story-driven narrative, Lindstrom ties together fascinating clues that have led him to major breakthroughs in retail experiences, product development and brand marketing. For example, he outlines how a worn down sneaker discovered in the home of an 11 year old German boy led to LEGO’s incredible turnaround. In another story, he explains how a magnet found on a fridge in Siberia resulted in a U.S. supermarket revolution.
These seemingly disconnected observations that provide the foundation for his breakthrough ideas are what Lindstrom refers to as Small Data. In order to collect small data, you have to spend quality time with consumers. As Jim Stengel, CMO of P&G said, “If you want to understand how a lion hunts don’t go to the zoo. Go to the jungle.” Lindstrom spends 300 nights a year on the road doing just that. He starts by conducting what he refers to as, Subtext Research (or Subtexting), a detailed process that involves visiting consumers in their homes, gathering small data offline and online, and comparing these clues with observations and insights taken from around the world.
As an ecommerce executive, it’s easy for me to get tangled up in Big Data. On a daily basis I’m confronted with easy access to thousands of lines of data on our customers and website visitors. It’s enticing to spend time analyzing and drawing conclusions from all this information, but as Lindstrom argues, our “Preoccupation with digital data endangers high-quality insights and observations.” He adds, “Most illuminating to me is combining small data with big data by spending time in homes watching, listening, noticing and teasing out clues to what consumers really want.”
The Small Data approach may seem more applicable to consumer brands. but as our business and private lives become more intertwined, the gap between B2B and B2C consumers is slowly closing. I posed a question to Lindstrom about how BookPal, a B2B company, might be able to leverage small data and here is his reply:
“Just think about it – we’re at work the minute we open our eyes – grabbing our phones, we continue working while getting dressed, feeding our children and driving to work. And at work we do personal stuff. The wall between those two different worlds is gone. But more than that, we’ve all begun treating ourselves as personal brands – promoting our achievements, seeking endorsements and sharing views with the world on LinkedIn. All this to say that those days where emotions didn’t play a role in our (business) decision making are long gone. If your wife is captured by a book – you’re likely to check out the author for work purposes, if you’ve had a lousy experience with a certain courier company at work – your wife would most likely never use the company at home. Small Data is all about understanding humans –- our out of balances. Those ”out of balances” represent a human need and define the opportunity for a brand, a product and a service. By spending time with those people, on your client side, your authors, your customers – in private you’ll quickly notice that they hold needs you’d never been aware of before. It might be that the business leader at the organisation you’re trying to sell 1,000 books to finds it challenging to optimize his operation, or that they receive far too many complaints, or that their R&D process seemed to generate weak solutions.Each of these needs, in return, reflects solutions BookPal could address via your books and through your authors. In reality, you’re not a book seller – you’re a intermediate between problems and solutions – what’s in between linking those two worlds together is called Small Data.”
For companies interested in implementing a small data collection framework to support product development and branding decisions, Lindstrom offers a final chapter in his book, Small Data detailing his 7C approach of Collecting, Clues, Connecting, Correlation, Causation, Compensation, and Concept. I asked Lindstrom how small organizations and startups can start collecting small data on a budget. His response was intriguing – “I think it is fair to say that Big Data only belongs to the big companies – setting up data warehouses, data mining facilities and the likes costs a fortune – Small Data however are much more simple and tangible. The case with LEGO – where the interview with just one 11-year-old boy in Germany led to the turnaround of the company from bankruptcy to the #1 toy company in the world over just a decade – is the best evidence in point. You don’t need to interview hundreds of consumers – in fact 20 or 30 interviews is enough –if you’ve selected the right respondents and are running the sessions the right way”.
Whether you’re a CEO, a marketing manager, a data analyst or a product specialist, it’s time to start thinking about Small Data. If you’ve observed or participated in a focus group, you can appreciate value of customer feedback. Spending time with your customers, in their homes, to observe them will ultimately prove to be even more insightful and valuable in leading to brand, product and market breakthroughs.
This article was written by Tony DiCostanzo from Forbes and was legally licensed through the NewsCred publisher network.