Snake Oil 2.0 – why more data is bad

December 9, 2012

Why more data is bad

Remember the old joke regarding college degrees? BS = Bull Shit, MS = More Shit and PhD == Piled Higher and Deeper and HBS == Half Baked Shit.

In Western society, we are schooled to believe that more and faster is better – even though we can see that big data analysis is paying off in a very small number of use cases (everyone is quoting personalized genomics and drugs)  and that large scale data breaches are the direct result of hackers going after the big juicy customer data sets.
Your marketing, technology, logistics and business development staff are all information junkies, not getting enough and wanting more.

Is lots of data really  good for business?

Our customers often feel they are not getting enough information – even though the sales and the product management staff feel that they (the staff) provide them (the customers) with lots of information via interactions  online, by phone, email, at face to face meetings and in formal product presentations.
Your CRM statistics may tell a story of high impact private networks for sale, the number of  online seminars and Web site visits and engagement but  customers often feel that they are getting no useful information at all from their vendor and account managers.
When customers and decision makers finally  do have a private, face-to-face meeting with a salesman and technology expert in the privacy of their office, they almost always feel that they have been given valuable information, even if they are unhappy with the answers or want to seek a competitive offer.
Why does this happen?

Utility is reference-based and not additive

As prospect theory predicts, utility (the value of a product or service) is reference-based and not additive.
In other words, more data from technical, sales and marketing staff and customer support groups is less valuable than data received when the frame of reference is a private consultation with a senior product manager regarding a technology solution – for example, data loss prevention technology to prevent data leakage of patient records in a large hospital organization.
Framing favors customers overrating a face-to-face visit with an expert sales engineer and underrating digital communications – even if the technical content is identical.
Framing effects in the customer relationship may also be related to cultural and societal factors.
In countries where managers function within a hierarchy, decision makers will tend to  value personal visits from senior sales engineers over email, social media, Dr. Google and online technology forums.

Framing effects create mismatched perceptions and expectations in an asymmetric relationship – where technical decision makers  (at the bottom of the totem pole) get information but do not value it and sales and engineering staff (the experts at the top of the totem pole) provide information and expect the customer to value the information and then become frustrated when their prospective customer downgrades the value of their messages.

Closing the gap between vendor messages and customer assessment of quality is critical to customer satisfaction, improving the customer relationship and achieving higher sales and product satisfaction.
From a data security perspective – storing less data is more secure than storing more data.
From a sales and marketing – getting   a small number of  right messages out  to the customer is good marketing and effective sales.
I’d love to hear what you think – drop me a line or a comment on the blog and tell me where I’m wrong.

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