Sometimes this feels like a Big Data world and we just happen to live in it. Companies have access to more data than ever before: transactional data collected with every swipe of a credit card and step a customer takes with their geo-location enabled smartphones; social media analytics; CRM; brand trackers; and NPS and CSAT scores. The amount of information companies collect is growing exponentially—doubling in size every two years and predicted to total 44 trillion gigabytes by 2020. Universities offer degrees in Big Data analytics, and there are annual conferences dedicated to figuring out how to make the most out of all the data we collect.
Here’s a stunning stat: only 0.5 percent of the data collected is analyzed. This may leave you wondering why we bothered with the other 99.5 percent. Yet many companies, afraid of being left behind, continue to invest millions in Big Data infrastructure.
Martin Lindstrom, a global branding expert who has helped companies as diverse as Reebok, Nestle, Lego and McDonald’s, argues that Big Data has largely been a bust. In his forthcoming book, Small Data: The Tiny Clues That Uncover Huge Trends, Lindstrom explains how extreme amounts of data don’t, on their own, provide the answers to the most critical business questions. Big Data provides a lot of loud noise, when corporate leaders are craving a clear guiding signal. Forbes has named Small Data as one of the must-reads for executives in 2016.
Lindstrom is the bestselling author of Buyology: Truth and Lies About Why We Buy and Brand Sense: Sensory Secrets Behind Why We Buy. He’s also in great demand as a speaker and pundit. In Small Data, Lindstrom talks about his experiences advising brands around the globe. Instead of relying on CRM or other large sources of data, Lindstrom connects on a personal level with average consumers. Challenging the widely accepted notion that companies need huge volumes of data to be successful, Lindstrom believes that the most valuable insight comes from interactions with real people.
“The days where all research was based on big, quantitative data will dwindle out,” he predicted in 2015. “In return a flurry of data, wearable data and ethnographic interviews with only a handful of consumers will take its place, and will dictate how companies will learn everything about their consumers.”
In his forthcoming book, Lindstrom offers his definition of “small data” and explains why it’s “the foundation for breakthrough ideas or completely new ways to turnaround brands.”
One key point in Small Data is the importance of engaging with customers on a personal level to understand why they make the choices they do. Without that intimate, meaningful knowledge, Lindstrom couldn’t have helped McDonald’s design a healthier Happy Meal, Porsche a new car key or Jenny Craig its diet program. His philosophy of small data is just that: an intense focus on the tiny, telling details of human behavior, which provide the insight needed to make big recommendations.