The Emperor Has No Clothes: How "Big Data
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This document discusses how big data is like the fable of the emperor's new clothes, with most people believing in big data's value without truly understanding it. It provides examples of how Sprint was able to improve customer retention and sales by focusing on advocacy drivers discovered through analyzing online conversations, rather than just collecting more data. The key is using "smart data" - the right amount of targeted data for insights, not just amassing large datasets. It outlines MotiveQuest's approach of starting with quality data, careful coding, creating frameworks to structure analytics, and telling stories with insights to make them actionable for businesses.
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The Emperor Has No Clothes: How "Big Data
- 1. The Emperor Has No Clothes A Fable of Big Data Kellogg School Innovation Conference April 2013
- 2. 2 Real examples 4 Tips Big idea
- 3. Two weavers promise an emperor a new suit of clothes that is invisible to those unfit for their positions, stupid, or incompetent….
- 4. …when the Emperor parades before his subjects in his new clothes, a child cries out, "But he isn't wearing anything at all!"
- 5. Most people pedaling big data today are more like the weavers than the child.
- 7. 7 Between the birth of the world and 2003, there were five exabytes of information created. Huffington Post April 2013
- 8. 8 Between the birth of the world and 2003, there were five exabytes of information created. We [now] create five exabytes every two days Huffington Post April 2013
- 11. 11 327,000 tweets a second when Obama won the election.
- 12. 12 Big data is all about Connections
- 13. 13 The continuation of a trend that started with the industrial revolution.
- 14. 14 Agricultural Isolated farmers Little innovation Social People and ideas connected globally in an instant Industrial People and ideas pushed together in cities AGE
- 15. 15
- 16. 16 1 Idea
- 17. 17 BIG You only need smart data You don’t actually need data
- 18. 18 You only need smart data
- 19. 19 Smart data: Just the right amount of data for the job
- 20. 20 The insight came from working with brands like these
- 21. It begun in my Basement
- 22. For the first three years we thought we needed MORE DATA
- 23. 23 Then we found a super smart person to help us explore if we really did Professor Jakki Thomas
- 24. 24 Northwestern university statisticians helped us discover that the only metric that really mattered was a particular advocacy algorithm.
- 25. 25 We found people online recommendations have a high correlation with offline sales
- 26. 26 We also created frameworks that could deconstruct where the advocacy came from Rational Emotional Social MotivationsPassionParticipation ArchetypesTrustValue MovementsEngagementService Activists Sales Marketing Problems MotiveQuest Activist Model
- 27. 27 2 Examples
- 28. 28
- 29. 29http://effie.org.ua/upload/axe.pdf In 2009 Sprint was losing customers at a quicker rate than AT&T and Verizon and gaining less. 2.026 1.238 -0.077 -0.565 -1.00 -0.50 0.00 0.50 1.00 1.50 2.00 2.50 AT&T Verizon TMobile Sprint NETADDS IN MILLIONS, Q3 2009 Source: http://www.strategyanalytics.com/
- 30. 30 CHURN DRIVER: Former Sprint customer who details the reason for their departure. ADVOCATE: Grassroots supporter of Sprint recommending the brand to others by talking about reasons to stay. INDIVIDUAL PARTICIPANT: Individuals participating in the cellular community by conversing with others. CELLULAR ROLES AND PARTICIPATION Unique methodology
- 31. 31 Models and features where the biggest reason to leave. 7.6% 15.7% 26.9% 29.8% 51.3% 54.2% 0% 10% 20% 30% 40% 50% 60% Speed Price/Cost Customer Service Coverage Features Models CARRIER SWITCHING TOPICS SENTIMENT MATRIX: 6/1/2008 – 5/31/2009
- 32. 32 COVERAGE MODELS CUSTOMER SERVICE The most strongly impassioned conversations about carrier loyalty were about customer service,models and coverage.Service was the biggest reason to stay. Advocatepassion
- 33. 33 Speed Price/Cost Features Coverage Models Customer Service REASONS TO STAY BY CARRIER, 6/1/2009 – 1/31/2010 Topics listed in order of importance to cellular advocates, from most important to least. 0% 10% 20% 30% 40% 50% 60% 70% 80% Speed Price/Cost Features Coverage Models Topics listed in order of importance to cellular advocates, from most important to least. Topics listed in order of importance to cellular advocates from most important to least. Speed, features and price/cost are other advocacy drivers, but these are the three most important. Sprint was disadvantaged in all three.
- 34. 34 So we focused on the key reason to stay. Less carrier control Focus area Switching Better models Better features Better coverage Reasons discussed for switching Staying Good customer service Good coverage Good models Brand advocacy
- 35. 35 AUTOMOTIVE TELCO RETAIL FINANCIAL TRAVEL AUTO How do people talk about great service?
- 37. 37 The solution went far beyond communications.
- 38. 38 2.78% 1.81% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Q32009 Q1 2011 SPRINT CHURN Source: http://www.strategyanalytics.com/ -0.565 0.644 1.1 -0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00 1.20 Q3 2009 Q3 2010 Q1 2011 SPRINT NET ADDS IN MILLIONS Source: http://www.strategyanalytics.com/ Saved or new users: 2.31m1 Av. Revenue per user $582 Incremental Revenue $133.98m
- 39. 39Source: Sprint Customer Service, 2/1/2010 - 9/30/2010 TRACKING After the initial engagement we track progress every quarter. -23.1% 15.0% 24.6% 19.0% 25.1% 112.7% -27.2%
- 40. 40
- 41. 41 MOTIVEQUEST MOTIVATIONS METHODOLOGY Explores the the 12 universal human motivational areas
- 42. 42 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% MQ MOTIVATIONS MODEL The most successful brands align themselves clearly with human needs. HERO FEEL ACCOMPLISHED “where there’s a will, there’s a way” MAGICIAN FEEL MAGICAL “it can happen!” OUTLAW FEEL SINFUL “rules are meant to be broken” SAGE FEEL WISE “the truth will set you free” INNOCENT FEEL REJUVENATED “free to be your younger yourself” EXPLORER FEEL ADVENTUROUS “let me find my own way” CREATOR FEEL CREATIVE “if it can be imagined, it can be created” CAREGIVER FEEL PROTECTIVE “love your neighbor as yourself” RULER FEEL ELITE “power isn’t everything, it’s the only thing” REGULAR GUY/GAL FEEL CONNECTED “all men and women are created equal” JESTER FEEL FRIVOLOUS “if I can’t dance, I don’t want to be part of your revolution” LOVER FEEL SENSUAL “I only have eyes for you”
- 43. 43 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% I feel accepted I feel amused I feel competitive I feel creative I feel rebellious I feel happy I feel loved I feel smart I feel prestigious I feel adventurous I feel responsible I feel productive TRUCK MOTIVATIONS The category is tribal, Ram was schizophrenic Source: Brand Specific Truck Forums, 11/1/2007 - 10/28/2008 COMPETITIVE SET MOTIVEMETER: 11/1/2007 – 10/28/2008 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% I feel accepted I feel amused I feel competitive I feel creativeadventurous I feel responsible I feel productive F-150 Forums Tundra Forums Silverado Forums Ram Forums Tundra General Silverado General feel competitive I feel creative feel rebellious F-150 Forums Tundra Forums Silverado Forums Ram Forums Tundra General Silverado General F-150 General Ram General 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% I feel accepted I feel amused I feel competitive I feel creative I feel rebellious I feel happy I feel loved I feel smart I feel important I feel adventurous I feel responsible I feel productive
- 44. 44 The Ram challenge re-positioning helped Ram top the growth chart in December 2010. Sales rose 87%.
- 45. 45 “A powerful global conversation has begun. Through the internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter- and getting smarter faster than most companies.” - The Cluetrain Manifesto
- 46. 46 THE MARKETING WORLD IS CHANGING The “age of social” is redefining buying behavior Emotional Passion Rational Product Story Product & Services People
- 47. 47 No Brand Mentions 95% Brand Mentions 5% Brand Mentions 11% No Brand Mentions 50% No Brand Mentions 89% Brand Mentions 50% Health ConversationsFood Conversations Car Conversations Lowest share of brand mentions. Highest share of brand members. FOCUS BROADLY In food 95% Don’t mention a brand.
- 48. 48 4 Secrets
- 49. 49 1. Start with the right data
- 50. 50 2. Sweat the Coding
- 51. 51 3. Create a framework
- 52. 52 4. Tell a story
- 53. 53 Quality Data • Data templates • Automated spam removal • De-duping software • Tag and index software Smart Coding • 10 years of history • Catalog of 180,000 brands and concepts • Top categories cataloged Framework Analytics • Advocacy • Motivations • Maven’s • Veteran’s • Value • Service • Source analytics • Segmentation Storytelling • Reasons why • 30 slides • 3 Insights • Actionable Source: MQ Analytics 4 SECRETS Insights that are truly actionable
- 54. 54 Think Smart
Editor's Notes
- Hi, My name is David and I am a Big data-a-holic.I have been in the big data business for ten yearsUntil 5 years ago I was drowning in the stuff. Has anybody else here felt that way?Well Finally I hit rock bottom and had an epiphany.
- Today I am going to share what I learned in that moment1 big insight about how to deal with big data2 Real world Businesscases4 tips for you to take home and use
- But first another story.OK you all know the story of the emperors new clothes.Two weavers promise an emperor a new suit of clothes that is invisible to those unfit for their positions, stupid, or incompetent….
- …when the Emperor parades before his subjects in his new clothes, a child cries out, "But he isn't wearing anything at all!“I believe that many of the high fashion big data gurus are just like those tailors, promising a suit of clothes that doesn’t really exist. It reminds me of the days of CRM. Big promise painful delivery.But first what is big data?
- Most people pedaling big data today are more like the weavers than the child.
- What is BIG data?
- Big data, its simplest form, is just that, lots and lots of data.It took us from the birth of the world till 2003, when I started my company, to generate five exabytes of data ..
- …we now create the same amount every 2 days. That is a lot of web, Facebook, twitter, forum, sales stuff to wade through
- For example if Facebook was a country they would be the third largest country in the world.Facebook has 1bn users after only 8 years.That is bigger than the USA.
- Twitter is at 400m tweets per day.
- When Obama won the last election itset Twitter's record for the most new tweets-per-second, reaching 327,000 tweets a second at its peak.
- At its core Big data is all about people andconnections
- The continuation of a trend that started with the industrial revolution.
- Age storyAgriculturalIndustrialSocial
- It can be overwhelming.How many of you have Big data/social data systems at your offices?How many of you have mastered them?
- OK so here is the secret. Ready
- The ugly, emperor tailor myth, is that you don’t need all that data.You don’t need big data at all.You actually need the opposite.
- What you really need is smart data.
- What is smart data? Smart data is just the right amount of data to solve the specific problem that you have today.
- I have learned this working on business problems for some of the largest Fortune 500 companies. It is an insight that has helped:- Grow market shareStem customer defections andOpen new sources of revenue
- How do I know this?It all started when I, stupidly, started a big data company in my basement in 2003.At the time people hadn’t heard of big data or social media and didn't even know what a blog was. Facebook hadn’t been invented and Twitter wasn’t even a twinkle in it parents eye.Yes my friends thought I was nuts..
- For the first 3 years from 2003 to 2006 I thought that my job was to find and wrap my arms around all the data I could.We built software that could collect and classify the data. We looked at Buzz, sentiment, influence, likes, etc.But it felt unsatisfying. We had so much data and we didn’t know what data mattered most.Luckily my office was in Evanston, IL the home of Northwestern University. So I walked over there to find some smart people to help me.
- The smart person I found was a brilliant professor and statistician named Jakkie Thomas. We started on a 2 year journey to see if any of the metrics that we had mattered a damn when it came to sales and share.
- We found online advocacy correlates with offline sales 97% of the time on average.
- But to move to action you need to understand where the advocacy comes from
- So what are the 4 secrets you can use when you go home?
- It would have been easy for Sprint to feel sorry for itself. The brand was without the iPhone as AT&T gleefully added an avalanche of subscribers from other carriers. AT&T’s biggest weakness was its unreliable network, but that was Verizon’s territory. Sprint was playing at a huge disadvantage when it came to model offerings and network perceptions. This disadvantage made it easy for Verizon and AT&T to poach Sprint customers and sent the brand’s defection (churn) rates soaring. Sprint understood it needed to reassess its approach to its customers and figure out a way to combat their steady exodus, knowing that no single model would be their savior. GOAL: Sprint needed to dramatically reduce the number of customers leaving the network.
- We aggregated carrier advocacy conversation – messages where one brand was being actively recommended over another – to understand what drove recommendation and retention.Initially we harvested over 10 million motivationally representative consumer conversations over a 14 month period, from major message forums, discussion boards, and newsgroups in the Cellular and Tech category. Nextwe organized the data so that three distinct participant groups could be isolated and compared with each other in terms of content and patterns of behavior – churn driver, advocate and individual participant. Thenour strategists applied proprietary linguistic analysis software tools to these conversations, building custom models to gauge passion, sentiment, and to identify the fundamental drivers that underscore behavior relative to decision-making and subsequent behavior in the context of the cellular carriers. Finally we developed an approach to segment community members by their role in driving others towards or away from Sprint. For example, Sprint advocates throughout the data period were isolated with their conversations analyzed to understand what drove loyalty. Conversely those leaving the brand had their conversations analyzed separately to contextualize the appeal of Sprint’s competitors. This behavioral approach allowed us to focus on Sprint’s sphere of influence. An obvious panacea could have been the iPhone, but what else do cellular advocates care about and is it something that Sprint can change in the more near term?
- ADVOCATES’ REASON TO STAYWe identified the carrier advocates for each brand and analyzed their conversations. What was getting them excited? Why were they recommending one carrier or another? It quickly became clear through the naturally occurring advocacy conversation that there were three primary reasons to stay loyal to a carrier: Customer ServiceModels CoverageThis focus on advocates’ reasons to stay shifted Sprint’s view of the challenge. By focusing more closely on what creates advocates vs.. what attracts new customers, the entrant was able to provide a roadmap for addressing churn by shoring up current customers. Those customers, serving as the brand’s grassroots supporters, would in turn be more likely advocate for Sprint, recommending the carrier to others and reverse churn’s rising tide. When we quantified the advocates’ reasons to stay by looking for opportunities, Sprint’s challenge became starkly illustrated. In the topics that drove most advocacy conversation – customer service, models and network – Sprint found itself behind the category leaders.
- Which reason to stay should be the focus? Sprint’s model line-up had a number of dynamic options in the pipeline, particularly ones leveraging the Android OS. But focusing on models is a dangerous foundation for long term advocacy growth as new models just leapfrog each other in terms of buzz and attention. Coverage is another tricky area given so much is based on perception and location.The best opportunity for focus became customer service. It was the biggest driver of carrier advocacy – even ahead of models and coverage – and Sprint found itself a distant fourth behind Verizon, T Mobile and AT&T. It was an area Sprint needed to overhaul and quickly. Without a proper customer service approach, the arrival of the new smartphone models would inevitably suffer. The shift from cell phones to mobile computers requires even more technical support and Sprint didn’t have AppleCare to bolster their customer service perception like AT&T. The Evo and Epic could be the best phones in the market, but if they couldn’t be properly serviced there would be no meaningful reason for customers to stay with Sprint.
- DEFINING CUSTOMER SERVICE Once we understood customer service was the key to protecting Sprint’s base, we needed to understand how consumers define service across categories. We analyzed customer service conversations in financial, telecom/electronics, travel, automotive and retail conversations, looking for patterns and like themes. We found that there were seven clusters of conversation that define a customer service experience. People wanted service that was:Knowledgeable Proactive Efficient Trusted Good attitudePersonalized Convenient
- Need to say something about this slide or lose it
- The ResultsThe results of focusing on “reasons to stay” and revamping Sprint’s customer service offerings have had wide ranging effects. In December 2010, a Consumer Reports satisfaction survey of carriers ranked Sprint second, indicating that the brand had surpassed Verizon in many aspects of customer service. Consumer Reports called Sprint’s turnaround “remarkable” given the brand ranked last in the survey less than two years prior. A May 2011 report by the American Customer Satisfaction Index showed even greater results, ranking Sprint first in terms of customer satisfaction.
- So what are the 4 secrets you can use when you go home?
- If you do these 4 things (in any dataset) you are much more likely to end up with something that you can use to drive action.
- So, in conclusion, the moral of the story is, don’t believe all the hype focus on the small things that matter – think small - and don’t let yourself be the one that is caught in your underwear.
- Thanks