Do companies actually know their customers better today than they did a decade ago?
A lot of them know their customers better. But they don’t know them nearly as well as they did 100 years ago. In some ways, analytics is a way to get back to the intimate knowledge that the typical retailer had before the invention of the automobile.
Is analytics making customers better off?
If a company uses analytics appropriately, the information will only be used to help customers in ways they want to be helped.
What’s an example of how analytics has led companies to understand customers better?
Best Buy is a company that’s good at timing cross-selling opportunities. When you buy a digital camera, they know you are unlikely to purchase a digital photo printer at the same time. But they also can predict that in five weeks you will have printed some pictures on your current printer. They know you probably weren’t happy with the result. That’s the time they e-mail a coupon for a new photo printer.
Does analytics take the human element out of marketing?
Most hypotheses are human generated. They don’t come from data mining. People see analytics as very quantitative and scientific. They fear it will drive out creativity. We find the opposite. The companies that are most analytical are most experimental. No one would say that Google isn’t innovative. Everything there comes down to some kind of quantitative analysis.
Where will analytics go over the next five years?
Analytics is rapidly moving beyond numeric data. There’s tremendous interest in tapping into data from social-media sites. People want to analyze the information on the Web locked in videos, images, and graphics. We can use facial recognition to ID people in photos. Location services let us know when and where the photo was taken. Organizations are experimenting with sentiment analysis applications to learn how people really feel about their company and products.