Data has been a subject of my deliberations, both public and private, for a long time — almost a decade. Long before the bulge bracket consultants discovered its virtue and long before short-term trumpeters of data showed up, data was something that helped shape my thinking and approach to decision making. It was not big data, or smart data, or little data or panda data. It was just data, and what one could do with, it that influenced my thinking.
With more network end-points and more digitization, it goes without saying that the amount of data in our lives and at work is only going to increase. But the size of the data isn’t the issue; instead, it’s “what you do with the data” that will be the key to the success in the emerging future economy. The companies (and individuals) who don’t think accordingly will find themselves on the losing side. Let me tell you three personal stories that will illustrate my point.
The first story involves an airline — Lufthansa, the German giant. I recently visited my parents in Delhi and a day before I returned I fell sick. I was quite feverish and somewhat of a pain to my fellow travelers. I developed a nasty cough and, well, I thought it might be a good idea to buy an upgrade and go to sleep on a lengthy (22-hour) flight. Instead of trying to use my points — I know better — I offered to buy an upgrade. But a Lufthansa official declined to sell me the upgrade. It was not that there weren’t any empty seats — there were many. But since I had an unchangeable ticket, he refused. It was mildly irritating because I had been patronizing Lufthansa for nearly two decades and was hoping for a little compassion.
That episode made me wonder about why Lufthansa was so rigid and refused to use historical data they had on me to make a smart decision to appease a returning customer, especially since it allowed them to monetize empty seats. The inflexible policies basically lead the airline to leave money on the table.
In the age of big data and smart enterprises, how can a company not have a way to make smarter, real-time business decisions? I wonder if “out data-ing” will be the right way for a competitor to eat the German carrier for lunch. This lack of ability to not know the customer is going to be what I believe we will mean when we say “big, dumb company.”
I, for one would like my airline to know me, know my tastes and if possible have enough data on me to offer me a quasi-personalized experience. Yes, I do live in the future and sometimes get carried away about the possibilities of data, sensors and the notion hyper-personalization. But still, I am not talking mining on the moon — I am talking about tactics little companies like Uber are using in making smart customer decisions.
The second story involves a wireless company — Verizon Wireless. Every time I leave the country, I call them up and sign up for the traveling data plan, letting them know where I am traveling and for how long. I actually don’t mind doing that because it makes a life a lot easier when I land in a new country. A week later when I return, I get ominous-sounding SMS alerts followed by a phone call from one of their agents who in an alarmist tone asks me if I have my phone and what not. Most of these calls are at early hours of the day when I am trying to deal with jet lag.
I cannot figure out why the carrier cannot figure out — using location data it obviously has — that I am actually back in the United States and in my city and perhaps even in my own neighborhood. As a customer, it would certainly be more convenient. I mean, these guys are willing to sift through my location data and my phone calls to do targeted advertising, why can’t they reconcile my location with their other databases to automatically update the records?
Shoe Side Story
Now let me tell you another story about a little store in Manhattan. In sharp contrast to my Lufthansa experience, I was reminded that I had a great visit to a shoe store in New York on my last visit to the big city. It proved to be educational. I had about half an hour between meetings and I walked through Soho, where I spotted Varda.
The last time I was there it was about 10 years ago, a few weeks before I moved to San Francisco. I had bought a pair of boots at the store. I was surprised that the store had survived the test of time and it was still going strong (it had started in 1981). The fact that they made shoes that last forever might have something to do with it, I imagine.
As luck would have it, I was wearing the very same boots. They have given me excellent service and with the exception of being comfortable like old shoes can be, they are almost new. I decided to duck into the store — after all, I had a little bit of time. I saw that they had an identical pair to the one I was wearing, except they were made with suede of a different hue. And I am sucker for suede and boots.
The salesperson and I ended up in a conversation about shoes and when she swiped the credit card, she noticed that I had done business with the store previously on a couple of occasions. She gave me an instant discount — without me asking for it. It wasn’t a lot, but it was a nice feeling of being appreciated for my loyalty.
Data designs experiences
A small store like Varda created an experience that was all-encompassing and got my money. Lufthansa just alienated me, after twenty years of blindly buying from them. I don’t think there was any big data involved at the shoe store: the aging PC probably was pulling data off Excel or something similar. It was micro-data if there was any.
A few weeks ago, I wrote about how a brand experience is multitouch and multimodal. I don’t think large industrial-era dinosaurs like airlines such as Lufthansa and American Airlines quite understand that. And that is why it doesn’t matter how much data they have collected about their customers or how many millions of dollars they spend on their computing and data infrastructure. They don’t know one simple truth: it is not the data, it is what you do with it, stupid.
Asking the right questions from the data and then creating an experience befitting customer happiness or drawing conclusions that are not obvious involves a level of humanity — something that is unfortunately missing from all the buzz about data. It is a pervasive problem across the industrial landscape.
As for me, I am shopping for a more-intelligent airline — one that values relationships and creates tailored experiences for me, the customer.
[Structure Data 2013: We will be discussing a lot about data and what you do with it at our upcoming Structure Data conference. For instance, we will have Mohan Namboodiri, VP, Customer Analytics, Williams-Sonoma talk about how the lifestyle company uses data. The conference is being held on March 20 & 21 in New York. More details here.]