As a long-term partner of the Yale Center for Customer Insights, Ideas To Go was pleased to sponsor and attend the 2016 Yale Customer Insights Conference, and (as always) walked away with great experiences and learning. The YCCI is the leading institution using Behavioral Economics and Social Psychology in the study of customer behavior and insights. Ideas To Go CEO Ed Harrington serves as an Advisory Board member for the Center. This year’s conference was a great mix of business leaders and academics—from places like PepsiCo, REI, Johnson & Johnson, and (of course) Yale—coming together to talk shop about the latest and greatest when it comes to marketing and consumers. But one theme I continued to hear again and again was the rising role of Big Data for insights and innovation. To make sure we’re all on the same page, when I say “big data” I mean the increasingly popular term for the large and complex data sets that companies are amassing today, that require approaches far beyond the more traditional data applications of the past. The main game changer here is technology—which has made it possible for companies to collect a myriad of data sets about their customers: from what they buy, to where they go, to every minute of music they streamed in 2015.
Some leading companies are approaching the dizzying possibilities of big data in very impressive ways. Kirsten Lynch, CMO at Vail Resorts, shared how data is creating a foundation for her company’s mission: Experience of a Lifetime. By issuing season passes with RFID chips embedded, Vail Resorts has been able to assemble a wealth of data—including which resorts a guest visits, where they dine, and how many vertical feet they skied. To up the experience factor for their pass holders, these facts and figures translate into sharable information via an app called EpicMix. Through the app, guests can share about their adventures—or compete—with real-time data, and add their own photos to create a rich story to tell to friends and family. Plus, the aggregate data makes for extremely useful information for guests with crowd-sourced lift line wait times, so skiers can make the most out of their ski and ride experience.
Another company that’s combining data with consumer experience in new and interesting ways is Spotify. Eric Solomon, Director of Global Brand Strategy, shared one way he thinks of their strategy is: “Music at heart, technology by design.” The music streaming company has a ton of data on the music their customers consume—but while they know they want their data to drive the direction of their business, they understand that context is everything. So one way they leveraged their huge store of data was to introduce the “Year in Music” at the end of 2015. This feature allowed users to access Spotify’s data to build their own personalized compilation, including:
- Their first played song.
- Their top songs, artists and genres—and their top artists by season.
- Total minutes of music listened to—and total number of songs and artists played.
Then, Spotify made it easy to share the information via social networks, and rewarded users with a custom playlist of tracks they would enjoy based on their 2015 listening. In the end, Spotify found a powerful way to connect with their customers—as well as garnering a generous amount of media attention and awareness.
On the academic side, Peter Fader—Professor of Marketing at Wharton—talked about the concept of Customer Valuation. When it comes to collecting and leveraging all this data, he argues that it’s not just about selling stuff—it’s about who we’re selling to, and about providing the best customer experience. According to Professor Fader, the shift towards customer centricity demands that we embrace customer valuation, and the benefits include:
- Optimized acquisition and retention spending.
- Evaluating product launches and promotional campaigns by the value created, rather than just aggregate sales.
- Gaining a sense of your corporate valuation via your customers.
He provided several examples of companies who he calls “heroes of customer valuation,” from video game company Electronic Arts for telling their R&D to develop games specifically for valuable customers—to multinational animal health company Merial for rewarding their sales people for how much future value they create, and understanding who the most valuable customers are.
The "Whys" Matter
So my takeaway from all these great thinkers and practitioners of big data is this: new technology is helping data become revolutionary in what marketers can see—but inside this mountain of information still lies the issue of uncovering real consumer insights, emotions, and engagement with your brand.
Simply said, the “whys” matter. The stories behind the “whys” matter. And companies like Vail Resorts and Spotify are staying ahead of the curve by blending both data and consumer insights together even more to form a 3-dimensional picture of their consumers.
Companies like Vail Resorts and Spotify are staying ahead of the curve by blending both data and consumer insights together even more to form a 3-dimensional picture of their consumers.
Not long ago, Ideas To Go CEO Ed Harrington had the privilege of interviewing Professor K. Sudhir, James L. Frank Professor of Marketing, Private Enterprise and Management at Yale—and a major pioneer in the world of Big Data. Dr. Sudhir shared that his approach to his work started to evolve very early on when he recognized that data is not generated by automatons. It is made by consumers trying to make the right decisions.
“With that perspective, I started to think about the things that I observe—and about the things I don’t observe. There might be a lot of important information that doesn’t get in the model—that firms, retailers, or consumers might know. When we don’t take that into account, a lot of our analysis—and the so-called “insights” that we might glean—may actually be wrong. There might be a lot of things that you don’t observe that might be changing the model.
You have to start thinking systematically about what consumers know—the private information that may be affecting their choices—and their personal affinities to certain products.”
Again we see that data can help marketers get pretty far in terms of observable behavior. But what about getting at what you can’t see? What the models can’t seem to get at? While big data can capture actual behavior, it’s hard to capture the tone, emotion, and all the shades of gray when it comes to what’s really going on in a consumer’s life. True consumer insights exist whether a certain product/service does—or does not exist in the marketplace.
The real magic is in combining all the layers of facts to create a more accurate picture. If you do, you’ll enjoy all the benefits big data can deliver—along with underlying emotions and deeper thought processes that open the door to understanding why consumers buy in the first place.
©2016 Ideas To Go, Inc. All rights reserved.
Jill Reiswig is the Content Marketing Manager at Ideas To Go, an innovation agency that works with Fortune 500 companies in ideation and concept development to incorporate the voice of the consumer.