How Companies Learn Your Secrets
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Course: Execution Environments for Distributed Computing 3rd Presentation (10-12min): How Companies Learn Your Secrets? - Why Big Data is important nowadays.
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How Companies Learn Your Secrets
- 1. How Companies Learn Your Secrets by Joe Lovell ? Maria Stylianou Ioanna Tsalouchidou Georgia Christodoulidou 34330 EEDC - Execution Environments in Distributed Computing
- 2. Overview • Companies’ Goal • Data Collection & Predictive Analytics • How Companies Exploit Habit-Mechanism • Companies’ Challenges, Solutions & Result 2 34330 EEDC - Execution Environments in Distributed Computing
- 3. Companies’ Goal • Collect information on customers • Shopping habits • Personal habits • Demographic information How to figure out if a customer is • Efficient marketing pregnant! • Offer them what they want • Make them buy more products 3 34330 EEDC - Execution Environments in Distributed Computing
- 4. Data Collection & Predictive Analytics BIG DATA magazines ethnicity political leanings Guest ID number per customer 4 34330 EEDC - Execution Environments in Distributed Computing
- 5. Data Collection & Predictive Analytics BIG DATA magazines Meaningless ethnicity political leanings Without Predictive Analytics! 5 34330 EEDC - Execution Environments in Distributed Computing
- 6. Data Collection & Predictive Analytics • Statistical techniques • Analyze gathered data • Find patterns • Understand how daily habits influence decisions • “habits shape 45 percent of the choices we make every day” 6 34330 EEDC - Execution Environments in Distributed Computing
- 7. How Companies Exploit Habit-Mechanism • 3-step loop process • If identified you can control it Routine Reward 7 34330 EEDC - Execution Environments in Distributed Computing
- 8. How Companies Exploit Habit-Mechanism 8 34330 EEDC - Execution Environments in Distributed Computing
- 9. How Companies Exploit Habit-Mechanism • Creating a new habit is difficult • Changing an already-existing habit is easier! • i.e. Febreze – true story! 9 34330 EEDC - Execution Environments in Distributed Computing
- 10. Companies’ Challenges 1. Identify & Take advantage of the moments that customers are most vulnerable on changing habits Solution Analyze their purchases Predictive Analytics 10 34330 EEDC - Execution Environments in Distributed Computing
- 11. Companies’ Challenges 2. How to advertise specific products without being suspected Solution Make ads look random! 11 34330 EEDC - Execution Environments in Distributed Computing
- 12. Result • Took advantage of customers’ existing habits • Keep the cues and rewards the same • Insert a new routine Habit kept looking familiar to customers $67 Target’s Mom & billion Baby sales 2002 2010 exploded! $44 billion 12 34330 EEDC - Execution Environments in Distributed Computing
- 13. Conclusions • Collection of Big Data Important • Proper Analysis of Big Data Essential Business Intelligence Department Sales Increase & Business Growth 13 34330 EEDC - Execution Environments in Distributed Computing
- 14. Web Reference • How Companies Learn Your Secrets, http://www.nytimes.com/2012/02/19/magazine/sh opping-habits.html?pagewanted=all • Business Intelligence, http://en.wikipedia.org/wiki/Business_intelligence 14 34330 EEDC - Execution Environments in Distributed Computing
- 15. How Companies Learn Your Secrets by Joe Lovell ? Maria Stylianou Ioanna Tsalouchidou Georgia Christodoulidou
Editor's Notes
- use a credit card or a couponfill out a survey mailing a refund call the customer help line open an email they send you visit the website => they record it and link it to the guest IDSimilarly happens with Google, facebook
- Ioanna referred to habits, so we need to explain what is a habit and how the author defines it.
- A habit is a loop between three steps.If we identify these 3 steps, then we can actually control the habit.The first step is the cue, that little thing that triggers you to do something. (a) time, (b) feeling, (c) placeAfter the cue, the routine comes which is the activity you doAfter finishing your small activity, the reward comes, which is the satisfaction.Let’s see an example to understand this better
- The author of the article has noticed that everyday in the afternoon he was going to cafeteria, eating a cookie and chatting with colleagues.However, the author wanted to loose some pounds and eating a cookie every single day didn’t help.So he identified the 3 steps of his habit.Cue: The cue was the time that he was having a brake 3:30Routine: The routine was going to cafeteria, buying the damn cookie and chatting with colleagues.Reward: The reward was the relaxation he was feeling afterwards - by having this brake.He replaced his routine, eating the cookie, by different activities; going for a walk, eating an apple, drinking a coffee, gossiping with colleagues.In that way, he managed to control his habit and loose extra pounds.
- So remember: Creating a new habit is difficult. Changing an already-existing habit is much easier.Another example given in the article is the Febreze product. This product was introduced in the market as a spray that covers bad smells by leaving a pleasant smell in clothes and furniture. After an epic FAIL of selling this product, the company interviewed several customers to find out what went wrong.Then a woman told them that instead of using the product as it was advertised, she used it to spray a room after clean it, so she was feeling like rewarding herself. The company, then, realized that they tried to introduce a new habit in people’s lives. That’s why it was failing. Therefore, they change the advertisement and introduce it as a spray for rooms, which could be included in already existing habits – like cleaning the house. Eventually the product became a huge success. – TRUE STORYBased on this example, the Target Company needed to do something similar, change their customers’ habits.
- So in order for Target to achieve its goals and increase its sales, had to face 2 important challenges.The 1st problem they had to face, was to identify and exploit the vulnerable moments of their customers in order to change their habits.The solution to this challenge was to analyze all the purchases of their customers. And this is done by predictive analytics..
- The 2nd challenge was how to advertise the products to targeted customers without being suspected. Without the customers notice that they were spied by the company! Because no customer likes being spied and studied.So what Target did, was to put the baby products that they wanted to promote and sell, among with other irrelevant but still familiar to the daily routine products to their pregnant customers. And in this way Target made the ads look random.
- To summarize, what Target finally did, after all these analytics on habits etc, was to exploit their customers’ existing habits, by keeping the cues and rewards of a habit the same and introducing a new routine. In this way the habit looks familiar to customers, which is important. As a result of all these, the goal of Target company was achieved. As statistics shown, the baby sales were exploded, the profit of the company was raised.
- Concluding, we believe that yes collection of Big Data is important for a company. But the proper analysis of this collection of data is Essential in order for a company to achieve its goals. So a strong business intelligence department is an important part of a company because it leads to sales increase and business to grow.