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Why Big Data, By Itself, Doesn’t Create Big Insights

bigdataIt seems like you can’t go a day without hearing something about big data. Much digital ink has been spilled on all sides of how big data could affect the research industry, from the breathlessly optimistic to the foretelling of the end of the profession.

I am very optimistic.

Here’s why.

It’s easy to see why people get so excited about the prospects for big data in marketing.  If you believe all of the hype, it is very easy to convince yourself that if you only had enough data, the answers to all possible marketing problems are within your reach. The problem is having enough data is a necessary but not a sufficient condition to generating insight.

What else do you need?

Judgment and strategic thinking.

These happen to be things that people are far better at than computers.

Dr. Michael Wu wrote a great piece in TechCrunch about the big data fallacy.  In it, he systematically destroys the notion that a lot of data means a lot of insight. The point he is making is that there is far more data than there is information, and there is far more information than there is insight. Further, he argues that more data and more information don’t necessarily result in more insight.

I think the reason boils down to this:

It is the analyst — not the analysis — that assigns meaning.

That’s because there can’t be any meaning without context.  Context requires a broad understanding of how the data fits into the issue and how the issue fits into the world.

The skills needed to make those connections?

Judgment and strategic thinking.

To me, this means marketers need skilled analysts to work with big data to generate the insights that will benefit the business.  This critical link in the chain isn’t going to be automated anytime soon.  In fact, one of the big worries marketers have is where to find all the data scientists to actually do the work.

It seems to me that there are plenty of people working in research today with all the requisite skills. The research industry just needs to change its mindset from strictly thinking about primary research to thinking about using data, wherever it comes from.

As Tom Anderson has mentioned, and I agree, the act of sifting through volumes of data to understand patterns and identify potentially lucrative groups in the market sounds a lot like segmentation.

Researchers certainly have the skills and the experience to be key players in big data.  Whether it is in the data manipulation and analytics or in the ability to connect the dots to create insights from the data, there is opportunity there for anyone who chooses to seize it.

So…which side do you fall on…optimist or pessimist?  Would love to hear your thoughts.

The only thing that stays the same is change

A few days ago, The Future of Insight blog asked if market researchers were looking at “The end of the world as we know it?”  In the post, Bob Moran makes the point that significant shifts in the industry amount to a step-change in the practice of market research.  He goes on to make some predictions about what the future of market research looks like.

Specifically, Bob mentions a shift from surveys to game-like simulations and much more use of emerging technologies like eye-tracking as two big changes in the market research industry.

I agree with much of what Bob says.

Every industry is constantly changing, but that change is usually evolutionary.  Every so often, a quantum leap shakes up an industry.  The last time we witnessed a quantum leap in the research business was the adoption of online data collection about 10 years ago. It feels like we’re on the verge of another leap today driven by huge changes in the way people interact online.

Seth Godin had an excellent post a while back on this topic.  He makes the point that any shift in a market will shuffle the deck in terms of the important players. We saw many call centers fall on hard times as online surveys started to replace phone surveys as the “default” mode of data collection.  We’ll see it again as advances in technology make observational research approaches more accessible and cost-efficient.

The people and companies who will thrive in market research are the ones who can adapt and who are good at helping their clients make sense of the marketplace. The people and companies who might be in trouble are those whose success is tied to a particular method or form of data collection.

We can be certain of two things:

First, many of the companies who are “leaders” today won’t be in 10 years and many of the companies that will be at the top of the industry 10 years from now are unknowns (if they even exist) today.

Second, the one thing that will always be in demand is the ability to create insight for clients by helping them understand market dynamics.  Maybe this will be called market research, maybe it will be called something else.  Whatever label is applied, it will be a good living for the people who can do it.

Market Researchers need to understand the client’s business

Last week, I talked about how market researchers need to think more like marketers.  Today I’m going to tackle a closely related point – knowing your client’s business.  On the surface, these two items sound like they are the same, but they aren’t.  The distinction I’m making is this:

“Thinking like a marketer” is about understanding the end game – what actions will the users of your research take (or not) based on the information.

“Knowing your customer’s business” is about understanding the context in which those actions will occur.

Thinking like a marketer helps you understand why your clients need certain information and clues you into how they may use it.  Knowing your specific client’s business helps you get to the “so what” in the data. Only by understanding the issues that keep your clients up at night can you transform market research data into actionable insight that answers marketers’ questions.

How do you do that?

If you’re working in a market research function inside a company, your job is relatively easy. By virtue of the fact that you’re in the company every day, you already have a good handle on what the issues are and how the business works. You can easily fill whatever gaps exist in your knowledge by discussing the situation with your internal clients.

Your job is a little more difficult if you’re an outside market research consultant or supplier. To understand the business issues your clients face, you’re going to need to make a concerted effort to educate yourself about the industry generally and your client specifically.

Luckily, there’s no shortage of sources for this information.

Even the most cursory Google searches on the industry and the company will likely turn up a treasure trove of background information.  Of course, the more experience you have in any particular industry, the larger your natural knowledge base will become.

We see market research companies specializing in particular industries all the time and we see some clients who place a high value on this type of specialization.  An industry focus can certainly be a smart marketing strategy on the part of a research consultant.

Eventually, though, you will reach a point of diminishing returns on additional industry expertise.  You should strive for a good working knowledge of the client’s business and issues. Remember, your client hired you first for your market research expertise and your ability to help them get the information they need.  Knowing the client’s business helps you do those things better, but no matter how much you specialize, your client will always know their business better than you will.

This background knowledge helps you answer the most critical question in any market research project.

So what?

Conducting a survey or focus groups and writing up a descriptive report of what you found doesn’t require any particular industry or company knowledge.  This type of report also leaves all of the heavy lifting to your clients. By addressing only the what, and not the so what, what you’ve really done is a data dump. You’ve left it to your client, the person relying on you for insight and expertise, to figure it out for themselves.

When you can walk into a meeting and not only tell your clients what you found, but why it matters, and provide some thoughts on what they can do with it, you’ve become a valuable ally in helping them get their job done.

Next, I’ll talk more about the third thing marketing researchers can do to become more valued – improving communication and presentation skills.  Don’t miss it, subscribe the RSS feed now.

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