Are You a Hoarder?

Of data, that is.  Data is everywhere.  We’re swimming in it; in some cases drowning.  And, we’ve become really good as organizations at collecting it, to the point of hoarding.  But, how much smarter has this data made us about our customers?  How much closer have we become to, not only understanding our customers wants, needs and desires, but anticipating them?

Customer surveys, focus groups, point of sale, demographics, technographics, psychographics, CRM, SCRM, web analytics, “likes”, social network analysis…the sources and types of data about customers, prospects and people in general is virtually unlimited.  And the stream of technologies claiming to lay the golden egg is ever-growing.

The direct and opportunity costs of collecting and storing data have plummeted recently and continue to drive lower, towards zero in some cases.  Heck, 10 years ago, a terabyte of data was futuristic cocktail conversation at IT conferences.  Now you can get a terabyte of storage on a flash drive for a couple hundred bucks.  And Toshiba is working on a 1Tb SSD the size of a postage stamp.

The last frontier, unstructured data, of which Gartner estimates makes up greater than 80% of enterprise data, is now no longer unaccessible either.  So, throw all that in the mix and our data store ends up looking like this

The unfortunate impact is that we have now become hooked on the ‘data pipe’; addicted to collecting it.  We’re doing it as individuals too.  We collect (sometimes hoard) followers, friends and contacts across social networks; confusing popularity and reach with influence and relationship to stroke our egos. Instead of focusing on better understanding, we have been lulled into a false sense of security and accomplishment through the very activity of data collection.  The acquisition and mining of the data has become the objective, the compulsion.  And, so we convince ourselves that we have a more intimate relationship with our customers.  But, the data on customer satisfaction and loyalty shows that the emperor has not clothes.

I’m often left to wonder, then,  how the best in class companies seem to anticipate and satisfy customer expectations so well.  Is it a result of the analysis of all this data?  Or, is it the fact that they simply hoard less and listen more?

Comments

  1. Stuff of progress. I would venture to say next step is communicating how organizations are applying what they "hear" – data to insight to action (action with reference to why the action & who prompted the action shared)

  2. Hey Janet,
    thanks for stopping by and for the comment. And by action, I would suggest that is summed up in doing those things that create a superior customer experience. It seems like, unscientifically, that organizations that collect the most data seem to have no better understanding than others. So, the question is then, how much is enough? And where should the focus be? I agree with you. Its should be on action. Thanks again

    Barry

  3. Hi Barry,

    I know too many companies and yes myself included, that are hoarders of data. What amazes me is how many people either get stuck in analysis paralysis as the comb over every detail of the data. Or they don't use the mounds and mounds of data they have collected.

    Managers today are inundated with reports and feedback and well data. Yet very few know what the data is actually saying, how to use the data to enhance customer relationships or coach employees. In my mind that's where the real crime is. If you are going to bother collecting data make sure the end user knows how to use it, how to share it and that the most critical information is getting to the right people.

    Great post!
    Kelly

  4. I say hoard away, but hoard quality, not quantity. And even then, if you can separate out the quality data later, then I say hoard it all.

    As you said, data is cheap, sometimes free, and the electricity to store it costs more than the hardware it resides on.

    The issue isn't the amount of data, or our addiction to collecting it, the issue is understanding what data we need to make wise decisions.

    Being able to listen to the right things at the right time may be the secret those best-in-class companies have uncovered.

  5. Hi Barry,

    Great point.

    It is easy to hoard data. I have a term for data that gets hoarded: "Data Graveyard". It is a place where data goes to die (instead of being alive and serving the enterprise.)

    The reason we build data graveyards is simple. It is easier to hoard data than to really think through how to fertilize the enterprise with the data.

    Munish

  6. @Kelly thanks for the comment. I think you got at my point. and @tim I have not so much an issue with the collection itself. To Kelly's point, its when the collection becomes the goal. How many of us have been in similar situations. We get the monthly "TPS Report" and delete it. How many of those are floating around any organization at a given time? The cost of data acquisition and storage is cheap. But what is the opportunity cost of someone producing that next spreadsheet that nobody looks at?

    and, finally how much smarter does that next morsel of information make us about our customers? There has to be a point of diminishing returns that I gotta guess many organizations are well past. Seems that companies that collect the most data – telcos, wireless, banks, insurance (USAA excluded) airlines are also the worst ranking with respect to the customer experience.

    Lots of data, crappy experience. Don't be a Homer. Go fix the experience. Lay off the data pipe.

    @munish – love this quote!!!

    "The reason we build data graveyards is simple. It is easier to hoard data than to really think through how to fertilize the enterprise with the data."

    Brilliant! And the fact that you have a term for it speaks volumes. Thanks

  7. the hoarde or hoarding is directly proportional to corporate size and decentralization.

    Glad we don't work in a hoarde, eh?

    Anaylzing it, methinks not

  8. Barry,

    Heard an interesting take on this very topic just this week. Nick DiNofrio, a fellow at the Kauffmann Foundation, opined that the best place to use data is at the time of transaction, rather than at some point after it has been collected, categorized, assessed and actioned. The trick is to stop listening to the storage companies that are telling you how valuable all that data you're not going to use is (while selling you storage), and develop systems that allow you to react to your customers intelligently in real time.

    I don't know how I feel about actionability of that notion, but I've been harping on companies' need to develop responsive, intelligent systems that provide better, more intuitive service experiences long enough that it felt right.

  9. Chris,
    Intuitively, that resonates with me as well. The opposite extreme is to collect all this data on customers that may or may not ever cross your path again. Storage is cheap. And that is part of the problem. The opportunity cost to collect and store it is a lot lower than it used to be. So, its easy to hide behind the activities of doing that rather than putting your neck on the line and, as Seth Godin explains, shipping.

    Thanks for the comment as always
    B

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