Big Data, everyone’s talking about it from Netflix to Coca-Cola, but what does Big Data mean to professional services firms? Or is Big Data just too big for most firms today? In this blog I’m going to talk about some of the main concepts to see if firms can still learn some valuable lessons, without needing to have budgets for managing data running to tens of millions of dollars like the big FMCG organisations.
As with most new things that come along and get us all talking, there’s not a great deal that’s actually new about the current “hot topic”. Yes it’s true that technology now allows us to do things automatically and much more quickly than was ever possible before, but wasn’t that true with e-marketing?
Suddenly we were able to send communications to anyone at a fraction of the cost and as a result the quality of those communications fell dramatically and most strikingly in directly inverse proportions to the quantity of them.
Now things have settled down and we’ve all got used to e-marketing, we’ve actually realised that the principles of good marketing communication still apply, and that if you don’t say anything that people want to listen to, delivering it to people more rapidly only allows them to ignore you “in real-time”!
In my view it’s the same thing with “Big Data”. Although I have always been technology agnostic, for the first time for me it’s actually the technology that’s the story here. The fact that segmentation can be done instantly is certainly impressive. However some of the leading grocery stores, Tesco in the UK, Wall-mart in the US, have been doing this sort of segmentation for the best part of 20 years.
So let’s tackle “Data” first and come back to “big” in a moment.
Understanding what your customers are doing, behavioural data, allows you to start drawing conclusions about the way they might think, attitudinal data, and that, when combined with good quality demographic data becomes very powerful.
And why has this been so successful for the big stores like Tesco? Simple. There’s a direct connection in the consumer’s mind between the effort of filling in an application form and the reward, in this case, tailored money-off vouchers. So consumers are prepared to provide their data in return for the reward.
Once the “data” hurdle was overcome, and as long as the reward outweighed any effort involved, the other element comes into play, “big”. The reason why Netflix and iTunes are such valuable brands is the sheer quantity of the intelligence that they have managed to generate as a by-product of their primary business objectives which was delivering content to consumers profitably. However many would argue that this by-product has now actually become the primary objective. It certainly has for LinkedIn.
So what about professional services firms? What can we learn from those that have gone before us? In my opinion a great deal. I’ll go back to the point about data. For me if professional services firms are going to be able to repeat some of the successes from the consumer goods world when it comes to segmentation, it’s about the data not the size.
Successful segmentation has to be looked at from both a top down AND a bottom up approach.
What I mean by that is this. You not only have to understand the “data cubes” (or segments) that you want to identify (top down), but the also the basic building blocks that will be the foundations of those cubes (bottom up).
So what are the sorts of things that most firms want to be able to do? Let’s take an example – “identify the firm’s key targets”.
How do you go about doing that? For me it’s all about making sure the building blocks are clearly defined, understood and well maintained. What building blocks would make up a key target?
Well it might be things like:
- Sector in which the company operates
- Sectors of interest for key individuals
- The work that you may already be doing for them
- Previous spend and profitability
- The job function, role and seniority of an individual at that target
- Their attitude towards you
- Their areas of geographical interest or jurisdiction
Whichever of these might be applicable to you, jumping straight to a list of organisations and people and “checking” those that are targets is only ever going to be reliable if you have time to keep it up to date.
Where “Big Data” has succeeded in other industries is by making sure that the building blocks are robust and well managed. Once you have those foundations in place you can then build any cubes you want. Of course having the right technology helps, of which more in a future blog.
In my experience most firms do actually fit the bill for “Big Data” in that they have a lot of it!
But, and here’s the big lesson we can learn, it’s in silos. There’s CRM, there’s Client Listening or Feedback, Case studies and Directory submissions, time and billing, new business intake, the list goes on and on.
Many of the building blocks that firms need to succeed with their segmentation already exist, the incredibly frustrating thing is that for many, this is then re-created manually in the CRM system!
So “Big Data”, for me, presents us with a chance, whilst the partners are all excited about it, to go back to some real basics and create a few accurate, well managed building blocks that will enable us to create quite sophisticated segmentation.
We should not get over-excited about what others are doing but we can definitely explore the key principles and see how they would apply in our own firms.
Watch out for the next in the series when I’ll talk about some of the practical things that firms can actually consider doing to pull some of these building blocks together.