Why big and small data are key to improving customer experience

Few would argue that delivering on customer experience is negotiable for brands and businesses today.  To deliver a positive and relevant experience, you need to understand your customers. In fact, 98% of participants surveyed in a Harvard Business Review Analytical Services study sponsored by FocusVision believe that understanding their customers is crucial to creating relevant customer experiences.

Unsurprisingly, nearly three-quarters of the survey participants, all from large organizations (1,000-plus employees) across the globe, indicated that their company has a customer experience strategy in place. However, only a fifth claim the strategy is working well. What’s going on?

A chronic lack of customer understanding

Despite access to a wealth of customer data, only 23 percent believe that their organization understands why its customers act the way they do.

Research by Forrester Consulting, commissioned by FocusVision, found that how a customer thinks and feels about a brand are both statistically significant drivers of how they act (purchase, loyalty and advocacy). Further, how a customer feels about the brand, their emotional connection with the brand, has a 1.5-times greater influence on driving positive business outcomes than what they think.

So, without understanding how their customers think, feel and act, organizations are unable to deliver on experience.

The need to integrate big and small data

The FocusVision-sponsored Harvard Business Review Analytical Services study showed that to fully understand your customer, you need to integrate both big and small data. Big data, from sources such as clickstream, POS, CRM interactions and so on, is effective at providing very detailed accounts of what your customer is doing. Small data, those gathered from surveys, focus groups, online research communities and mobile ethnographies, tells you why they are taking those actions.

Overall, organizations feel much more comfortable in their ability to leverage small data (56 percent) than big data (18 percent). But neither type alone delivers the insights required for the CX management strategy.

“The biggest problem with corporate data today is that everyone is obsessed with getting big data solutions on board. But you have to get your hands dirty to see the world form the customer’s point of view. You have to put yourself in their shoes and feel what they feel. Then you have something valuable,” says Martin Lindstrom, founder and chairman of Lindstrom Company and author of “Small Data: the Tiny Clues that Uncover Huge Trends.”

Leaders see greater CX success

The study demonstrated that 15 percent of the respondents, the Leaders, are able to integrate both big  and small data to create a holistic customer view and report that they have a far better understanding of their customers.

Effective CX Management strategy