According to Gartner Inc., the world”™s leading information technology research and advisory company, data will grow 800 percent during the next five years. “The amount of data generated in 2009 alone was more than was generated in the past 5,000 years.” International Data Corporation (IDC), a premier global provider of market intelligence, agrees, saying that the volume of data doubles every two years.
Does the organization or entity with the most information always win? In May 1997, an IBM computer named ”˜Deep Blue”™ became the first machine to beat the then reigning world chess champion Garry Kasparov. In 2011, Watson, another IBM computer, beat former “Jeopardy” TV show winners Brad Rutter and Ken Jennings. Why is technology my biggest threat, you may ask?
Only with current and accurate data can you spot business risks, know customers better and identify sales opportunities. According to the Small Business Administration, “To run a successful business, you need to learn about your customers, your competitors and your industry.” Proper use of information technology can help you understand which products and services are in demand, when they will be needed and how to be competitive.
Jean Paul Isson and Jesse S. Harriot, authors of “Win with Advanced Business Analytics,” tell an interesting story. “The father of a 17-year-old girl discovered that she was getting a lot of emails from Target to encourage her to buy baby and pregnancy-related items. Furious that the retailer was glamorizing the notion of teen pregnancy, the customer stormed into Target in person, read the manager the riot act and demanded that the emails stop.”
Target apologized and stopped the emails. When the father related the experience to his daughter, he was shocked to discover that she was in fact pregnant and expecting a baby in five months. Target”™s data-mining techniques had created a ”˜pregnancy predictor”™ based on shopping activity.
Isson and Harriot continued. “If a customer scored high enough on the pregnancy predictor, Target would send emails with offers for pregnancy-related products. Target”™s computers sifted the data and were able to identify about 25 products that allowed them to assign each shopper a ”˜pregnancy prediction”™ score and estimate her due date.”
They then send coupons timed to arrive at each stage of pregnancy and know that expectant mothers buy larger quantities of unscented lotion beginning in their second trimester. In the first 20 weeks, pregnant women load up on supplements like zinc magnesium and calcium and scent-free soap, large quantities of washcloths, cotton balls and hand sanitizers when close to her delivery date.
How much do you know about your customers? Gartner research concludes that only 20 percent of the increase in data availability will come from online transactions and credit cards. The balance will be from emails and comments on social media sites such as Facebook and Linkedin. Using its ”˜People You May Know”™ ads, LinkedIn generated a 30 percent higher click-through rate when it used information its users had entered into their profiles.
Failure to invest in technology threatens the corner drug store that”™s competing with Target and the neighborhood book, music or video store competing with Amazon and Netflix. To run any successful organization, even your local public school, you must learn about your customers, your competitors and your industry. With the volume of data doubling every two years we all need to learn how to use it to enjoy a sustainable competitive advantage.
Questions for discussion:
What technology will we use to learn more about our customers, competitors and industry?
How can we market our products and services more efficiently by utilizing the information technology can provide us?
Joe Murtagh, The DreamSpeaker, is an international motivational speaker, meeting facilitator and business trainer. For questions or comments, email Joe@TheDreamSpeaker.com, visit TheDreamSpeaker.com or call (800) 239-0058.
