The saying that knowledge is power has never been more true than it is today. Today, brands can collect (in a privacy compliant manner) a tremendous amount of information about their existing and prospective customers.
But does “more” data really make a difference? Is quantity more important than quality?
The answer is: it depends.
I’ve been in the data industry for over 10 years. During that time, I’ve learned that data, ethically applied, can be of tremendous value to an organization. I’ve also learned that it is easy to fall prey to the concept that more is better, when in reality sometimes better is better.
While data collection should be vast (after all, it is easier and more cost effective than ever to collect data), data interpretation should be mindful and deliberate. Your process should start collecting as much data as possible, then on a case by case basis utilize that data to answer very specific questions which help improve your organization.
This process sounds much easier than it is. I’ve found it is easiest to start with a basic question, and work backwards through the evaluation process to find your answer. As you work backwards through this process, you’ll be able to stress test a set of assumptions that will ultimately derive an answer based in fact – not assumptions.
Take for example the simple question “who are my best customers?”. First you must decide upon the metric that you’re assigning the term “best”. Is it your longest customer based upon time? The customers that generate the most revenue? The customers that generate the most profit?
With that question answered, you must now determine why you’re trying to answer that question. Do you want to find those customers in other media channels? Are you looking for customers like your best customers? Do you want those customers to spend more than they do today?
As you can imagine, the number of questions can be seemingly endless. It is very easy to slip into a data vortex, where you are paralyze by the sheer amount of data you need to analyze to derive your answer. But if you’re diligent, and thoughtful in your approach, you’ll be able to derive answers that bring exponential value to your organization.
Truth be told, this process is part science and part art. And quite honestly the only way to improve your results is to practice. Build, Test, Repeat. But with time, practice, and careful iterative improvements, you’ll be able to yield results that drive your business beyond the competition.
As a side note, one good resource in your journey is the Google Thinks series. Here is a recent related episode that you might find interesting.