Don't Forget About Small Data

December 10, 2014

There has been no shortage of buzz around Big Data over the last few years. It has emerged as one of the most important levers that a large company can pull in order to drive efficiencies, uncover new opportunities, and have a better picture of its customers—which, in turn, has led to beneficial personalization and effective targeting efforts. What’s more, the U.S. Chamber Foundation and this writer have been at the forefront of helping businesses make sense of the Big Data buzz through our joint papers and presentations, Chamber-led conferences, and, most recently, the Foundation’s multi-authored Big Data magnum opus, “The Future of Data-Driven Innovation”.

However, by focusing on how to better collect, store, analyze, and apply Big Data we have all missed an important and informative data set: Small Data. While your first thought might be to think of Small Data in terms of “just less Big Data,” I want to reframe this definition to instead mean qualitative data gathered using ethnographic methods to gain insights into the everyday problems your customers face. In other words: information from studying real people, in real contexts. As a result, you will not only gain deeper empathy that will lead you to insights and opportunities, but it will position you to remain a step-ahead of the competition with the relevance and utility of your unique-to-your-customer solutions.

So how can you, a businessperson, get started? I want to challenge you and your internal teams to conduct these ethnographic studies (1) in the wild, (2) double-paired up, (3) with little-to-no outside assistance from a “market research” company, and (4) use your Big Data as a starting point for this journey. Digging deeper on each component of your Small Data investigation:

  • By “in the wild”, I mean to evoke the Jane Goodall school of research. She didn’t come up with surveys or lean on lab-based studies when she wanted to understand chimpanzees. Rather, she immersed herself in their environment and was then able to observe their unprompted natural habits. To truly understand the unmet needs and pain points your customers face—and be able to truly solve them—you have to experience their lives with them. Listening in on industry best practices, I’ve come across three great case examples:

    • Airbnb almost failed, but fieldwork saved them: On the verge of going bust in 2009, Airbnb met with their Y Combinator mentor, Paul Graham. They all observed how unprofessional the rentals’ photos were, leading to poor conversion. Graham’s solution? Travel to New York, rent a camera, spend some time with customers listing properties, and replace the amateur photography with beautiful high-resolution pictures. They did just that and it lead to higher conversions, more revenue, and their first big steps out of what founder Joe Gebbia called the “‘trough of sorrow”—to become a billion dollar business.

    • Airline app solution: Employees from a major airline “rode along” with its customers hours before they left for their flight and then once at the airport. They observed a common theme: their customers rarely had both hands free from house to security to gate. Their solution? Create a mobile app that only requires one thumb to navigate.

    • Empathy in CPG sales: Executives from a major consumer product goods company traded refrigerators with their core customers (moms) for a week. The exec’s had pristine, stainless steel fridges with lots of organic and raw foods; the fridges owned by their core customers used the fridge as a “command center” on the outside—visuals of schedules, accomplishments, shopping lists, etc.—and on the inside, there were more quick meal ingredients and packaged foods for lunches (e.g., yogurt, juice boxes). After the exercise, the execs said they understand what their core customers are really all about “beyond the numbers and market research”.

  • Why double-paired up? It allows for more balance and diversity from your side and for your customers, having them bring along a friend or family member facilitates a conversation. You are also able to ask and capture more efficiently—and catch things your colleague might have missed, while having their help when you are working to recall and to analyze your joint observations.

  • Why little-to-no outside assistance? Having spent the last decade of my career working in some form of brand management (legal, digital, media, business intelligence, marketing and design, venture design) for brands, I am finding that because my current job requires that we work with brands, it is much more effective for the client and for their customers.

    • Unpacking this further, when I worked in IP law, we were either given problems to solve or asked to plan/look around the corner. It was very unidirectional—needs came in from the client, and expertise was fed back to the client from the law firm.

    • Similarly when working in the digital media, business intelligence, and marketing/design fields, the brief or problem was lobbed over in an email (or RFP). We would work in a vacuum on the solution. Then we would lobb it back. And then feedback would be tediously written up and lobbed back.

    • In so many of instances of “outsourcing insights”, there are arguably missed opportunities for the brand/company to internalize, own, and even lead the solution.

  • Big Data can be immensely helpful in pinpointing where you should start with your Small Data investigation.

    • For example your Big Data analytics might show sales and/or web traffic has dipped. The Small Data step you can take to start unearthing the reasons is to double-pair interview 20 - 30 of your customers.

    • Once you hear from your customers, you may have an immediately-fixable answer (e.g., your customers have migrated to access your site almost exclusively from their smartphones, but your systems are lagging—time to upgrade to a responsive strategy).

    • It very likely might not be this easy. If it’s not a user experience issue, listen for unmet needs and for technology trends that are driving their expectations. Chances are what you used to offer them and how you offered it is not keeping up with their needs and technology expectations (thanks, Uber)—so it is time to start innovating with their points of view front of mind.

Armed with these four techniques, I guarantee your Small-Data-informed empathy will not only better empower the individual consumers, but will positively affect the business goals that matter to you. Incentives are aligned for both parties, making the use of Small Data one of the greatest efficiencies for which any market or society could ask.