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When it comes to Big Data, don’t forget the small stuff

In a business world seemingly gone mad for Big Data, it’s worth remembering that our scramble for better trend lines and demographic profiles shouldn’t prevent us from overlooking the little stuff.

“The corporate world has become completely blinded by Big Data,” said branding Expert Martin Lindstrom in a recent interview with Knowledge@Wharton. He has reason to be cynical. For his new book, Small Data: The Tiny Clues That Uncover Huge Trends, Lindstrom visited the homes of 2,000 families in more than 75 countries to observe how people live and how their lifestyles affect their attitudes and preferences.

He asserts that our fixation on big numbers distracts us from the insights that human interactions reveal about human desires and motivations. Essentially, Big Data tells us how people behave, but not what they want. It’s useful for refining what we already do, but not for generating new insights.

“If you take the top 100 biggest innovations of our time, perhaps 60% to 65% were really based on small data,” Lindstrom said.

Like Swiffer. Procter & Gamble’s cleaning innovation was the result of a research project to invent not a better mop, but a better cleaning agent. Researchers at Continuum, an innovation agency P&G engaged for the project, spent hundreds of hours watching people mop floors without results.

It was a single incident that got the innovation wheels turning. A Continuum research spilled coffee grounds on the floor, then watched as their elderly test subject reached not for a mop but with a broom and damp paper towel. That single interaction yielded more insight about a consumer need than terabytes of data. Swiffer today generates $500 million in annual sales, and P&G dominates the market.

Similarly, the idea that launched the $15 billion Snapchat phenomenon was a co-founder’s wish that he could erase photos he had sent his girlfriend earlier that day. It turns out a lot of other people had the same need.

Outliers

The real innovation potential of Big Data may not be in the broad trends it uncovers but in the niches it reveals. Outliers can yield more insights than norms.

NewVantage Partners founder Randy Bean asserts that the myth about Big Data is that big is important. “Rather, it is the ability to integrate more sources of data than ever before,” Bean wrote in MIT Sloan Management Review. The real value is in “new data, old data, big data, small data, structured data, unstructured data, social media data, behavioral data, and legacy data.” In fact, 69% of corporate executives surveyed by NewVantage identified data variety as the most important factor in Big Data success, compared to just 25% who cared mainly about volume.

What does this have to do with social media and marketing? Well, nearly a decade ago, Chris Anderson coined the term “Long Tail” to describe the value of aggregated small markets. That concept, which he described in a book by the same name, is the essence of what social media is about. Most mass markets are now so dominated by a few competitors that it’s impossible for newcomers to find a way in. So they have to find a way around. That’s where understanding cultural preferences and human needs comes into play.

In my region of the country, a small, 88-store grocery chain called Wegmans has inspired a fanatical following. Wegmans is prospering not because it has more products or lower prices but because it has reimagined the food-shopping experience. AdWeek has a great profile here. Sure, Wegmans has excellent logistics and marketing, but the secret that it spends months training new employees to share their passion for food and its preparation with customers. In contrast, supermarkets turn over their employee base an average of 100% per year. Wegmans makes shopping fun.

Amazon’s brilliant plans to open hundreds of brick-and-mortar bookstores is another example of the power of the Long Tail. Having captured the market of book buyers who mainly value price and selection, it’s going after the smaller but still substantial base of people who treasure the community bookstore experience. It can win in that market without cannibalizing its core.

In the early days of social media, many marketers were captivated by their ability to easily tune in customers’ thoughts and conversations. But as social has gone mainstream, they’ve reverted to their urge to aggregate. Let’s not forget that one of the greatest gifts social media gave us was individual voices. When we normalize, sanitize, and homogenize them into spreadsheets and PowerPoint charts, we lose the ability to discover the human stories that make the light bulbs go off and, in the process, invent new markets.

Photo by Dave Austria via Flickr CC

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