Originally posted on BtoB- The Magazine for Marketing Strategists October 24, 2012 and in print November 6, 2012
The true challenge of Big Data is not that it’s “big” per se, but that its scope encompasses so many possibilities that marketers can find themselves faced with a form of writer’s block—staring into the endless depths of 0s and 1s wondering where to start and what value lurks in the unfathomable depths of their data. All of the answers held in one large unwieldy collection of data present the marketer with a myriad of choices for value creation and insight. So where to start?
As you begin this journey, it is important to embrace the notion that you can and will be making technology selection decisions. You need to think like a chief technology officer and not accept dead-end answers that a traditional IT department may give you. You’re here to rattle the cages and get some action.
There are two obvious forks in the road with many branches fanning out from there.
First there is the route of insight and analysis. The web log files that you’ve struggled with for years to extract value have suddenly become extremely easy to store and very accessible for analysis. The social media companies overcame these hurdles by creating a whole new technology for storing vast data files, and a whole new generation of database and business information technologies are making it easier than ever to now analyze this information. Social media companies are running their businesses today by analyzing this data to manage customer churn and acquisition, segmentation of offers and purchase propensity. A wealth of information that can be applied to every facet of your business is now available and accessible. And the more digitized your business, the more powerful this data is. Start by supporting all your important decisions with data analysis.
The second route is to create from Big Data totally new “productized” services and business models based on your ability to analyze and execute on the analysis. The world is full of start-ups creating amazing new services on the Internet based on using Big Data. For example, one company is offering credit card companies a service to analyze their card members’ data on the fly and deliver special discounts at the moment they swipe their cards at a store; it’s the rebirth of the coupon. Even in traditional industries, embracing business innovation on the Internet has been critical to thrive. Just look at the media industry’s continuing transition to digital. Who better than marketing knows the customer well enough to play a role of positive disruption?
Let’s face it, the science of marketing is relatively new. Until the development of business intelligence tools, marketing was largely driven by the learned knowledge of the practioner. This learned knowledge is still critically important to strategic decision-making, but now we have so much information it is possible for day-to-day decision-making to be done by nonpractitioners.
It’s never a straight path from point A to B. And it isn’t even a path paved with a clear ROI. You’re embarking into the realm of creative destruction. Your goal isn’t to break even—it’s to build the next killer application. It’s to rejuvenate your somewhat stagnant or settled business into a new paradigm for the 21st century. As you begin this journey, it is important to embrace the idea that you can and will be making technology selection decisions. You need to think like a chief technology officer.
Originally posted on BtoB- The Magazine for Marketing Strategists July 18, 2012.
Death by a thousand cuts was an ancient punishment reserved for heinous crimes such as treason or killing one’s parents. The process involved tying the person to be executed to a wooden frame, usually in a public place, and proceeding to cut off little slices of flesh until the guilty party expired. Big data has the potential to do just this to your company. The worst part of it is that you will not even know this is happening to your company until it is too late.
In the world of today, your customers are writing about you and their experiences of your products or services across thousands of different websites, Yelp, Google, Bing, your own Facebook page, your own Youtube channels, your own website feedback forms, win-loss data from your own sales force-you name it. The big data explosion is coming from the hundreds of millions of transaction and social media engagement channels across the Internet and your own systems that you set up to serve your customers in the first place!
The genie is out of bottle and there’s no retreating from the world of big data. Before your business has even been contacted, 57% of the purchase decision has already been made –this based on 2011 research from the Marketing Leadership Council of Corporate Executive Board. Where is all this decision-making happening if you haven’t even met once with this prospective customer? It’s happening on the Internet. Prospects are using the myriad web channels to find out just what everyone really thinks of your solutions and forming their own opinions without ever meeting you.
“Well Kevin”, you say, “this is such a bleak picture it just can’t be, we’ve been a customer-centric company for many years- this is how we have grown our business in the first place”. And you would be correct. It is a well known fact that companies that listen to their customers win. “Aberdeen Group, Customer Experience Management: Engaging Loyal Customers to Evangelize Your Brand” report cites 70% of customer experience management best in class adopters use customer feedback to make strategic decisions. 50% of industry-average organizations and 29% of laggards do this. This hasn’t changed; it’s just that now this feedback is being posted in a thousand other places than your website.
Businesses today have to embrace big data to really understand the totality of what their customers are experiencing and reporting to out to their networks. You have to develop strategies for being able to collect all of this feedback in whatever format and bring it together with your own information to have a true 360 degree view of your customer. The truisms on which the most successful businesses have been built stand true, it’s just that the execution of those truism have become much more complicated with the hundreds of new communications channels that we are using in our everyday lives. Gartner, the world’s leading information technology research and advisory company, estimates that CMOs will be outspending CIOs on IT in the next 5 years, driven by the inexorable rise in on-line business and big data. With the right big data strategy, instead of a thousand cuts, you could be facing a thousand compliments:-)
I wanted to share with you some of my recent experience working in Brazil.
Fio do bigode is a colloquial Portuguese phrase that I learned during a recent assignment leading agribusiness industry marketing in Brazil. It means “hair of my mustache” and was given to me by the agribusiness industry principal, Claudio Lot, with whom I worked in developing the industry plan. Claudio himself came from a family farm business and this was what his father would say would do when sealing a deal, making a promise, or swearing an oath.
Instead of a contract, he would pluck a hair from his bushy mustache and offer it as pledge. It’s an expression of sincerest genuineness and honesty. It is a phrase that gives some insight into the mind of the agribusiness customer who comes from rural beginnings but now transitions into modern day business.
Agribusiness is a very large part of the Brazilian economy accounting for 25% of national GDP and 37% of the national workforce. Brazil is the second largest agriculture producer in the world with 22% share of global production after the USA which produces 50% of global agriculture. China and Malaysia are distant followers-up with only 5% each of global agriculture production. Did you know that 85% of the orange juice in the world comes from Brazil? A Brazilian company just bought Tropicana as they wanted a global brand to help market as they continue to expand. Brazil is the leading worldwide producer of several other crops that any household counts as essential: sugar (47% of the world), beef (25%), poultry (41%), coffee (27%), and soy beans (30%). Bain & Company estimates that Brazilian agriculture will out grow the USA over the next 35 years. Why is this such a growth industry in Brazil? Brazil is a country with lots of land located at exactly the right latitude with abundant water. Global population and income growth has created a ready export market for Brazil’s abundance. Agriculture is the national champion industry in Brazil, just as financial services is in the UK, and high technology in the US. Matter of fact, Brazil is often referred to as the “market basket of the world”. Brazilian agriculture is also the leading global driver in the development of alternative fuels. Sugar mills switch to ethanol production based on the market pricing that day and then back again to sugar when prices push the other direction. The cellulose materials left over after processing the sugar cane is also used as fuel in electric generation plants. Did you know that sugar cane produces 6X more ethanol than the process to convert corn? Scientists have just begun to work on pushing this astonishing productivity figure higher with advanced technology providing for many more years of productivity growth in the agribusiness sector beside just the expanding production of food stuffs.
All of this attention to Brazil’s agribusiness industry has drawn all the major global players to set up shop and complete in Brazil. This in in turn has spawned a massive number of IPOs for family-owned, farms and mill businesses seeking capital to expand operations and step-up to compete globally themselves. Agribusiness is like the dot com boom of Brazil, only it’s all about food and alternative energy production which is facing a continuous upward demand curve far into the future. This is why agribusiness in Brazil is so important.
There was also the social aspect of being in a different culture that I found amazing. I am a huge fan of samba and Afro beats music. Brazilians love music and it is essential part of everyday life. I was amazed to be listening to all of my favorite music all time where ever I went, airports, restaurants… I was also able to join some colleagues in some public service work during my time there. SAP Brazil sponsors a local youth group Meninos do Morumbi that keeps the kids out of the street teaching them music, dance and Brazilian culture. Here’s a video that I got to participate in for SAP’s 40th anniversary.
And of course for a country where so much of the world’s food comes from, there is excellent cuisine. I liked to say that Brazilian cuisine is all beef and sushi—yes sushi! Japanese have been immigrating to Brazil since after World War II. Speaking of which Brazil has to be the most diverse and multiethnic society in the world. All kinds of peoples, races, and cultures blended up in a melodious anthem of civil society.
Brazil is an amazing growth market. The people of Brazil are forward facing and love to embrace new ideas. I hope you enjoy my story.
My colleague Marcus Starke proposed an interesting question the other day. “Many of us undoubtedly recall the good old 4 Ps of the marketing mix: Product, Place, Price and Promotion. These have been interpreted in different ways in the past. Is it now time to definitely retire them as a concept of the dark ages?” This was a very interesting question to me. Putting an idea in my head is like giving a dog a bone. So I had a good chew on this one.
My first reaction was poppycock. How can such a fundamental pillar of marketing, almost a “marketing law of physics”, be called into question. I’ve always believed that all marketing is merely a reflection of human behavioral psychology; how much does our fundamental behavior ever really change? Love, jealousy, admiration and rage, we see every day; the oldest stories of humanity are as engaging today as they were hundreds of years ago.
So what has changed? I believe that nothing and everything has changed. The emotional dynamics of being human have not changed, but our emotional intelligence has evolved and expanded. As individuals, we are now communicating through many more channels than before. As a result, the opportunity for understanding, interpretation and sensitivity have expanded and so too have the principles of the four Ps broadened– reflective of the rising emotional intelligence of the human species. This great video from Brian Fetherstonhaugh, Chairman of OgilvyOne really crystalized it for me: http://bit.ly/y9wxkc
- Product expands to “experience” of product, of the company, of the brand, of the employee
- Place becomes “every place”, where ever you are there is an expectation of access and availability
- Price becomes a much broader concept of “exchange”, the understanding of reciprocity expands as we trade for bits of information regarding customers’ intentions and desires
- Promotion broadens to “evangelism” as our most ardent customers and fans become the loudest voice of promotion over any discount
Thank you Marcus for challenging the status quo and stimulating my thinking on this subject.