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Why Big Data won’t tell businesses what their customers want

Eight out of ten businesses say they really don’t know what their customers want. They are missing the fundamentals of customer care, says internet psychologist Graham Jones

Most business people I meet reckon they understand their customers. The trouble is that most customers I meet say that their suppliers do not understand them. I fear the situation is getting worse, rather than better – and it’s all because of the Internet.

A couple of years ago I read some research that showed that even amongst the world’s top brands an understanding of what the customer wanted was sadly lacking. The study asked company executives to produce a list of the top reasons as to why customers bought their products and services. Unbeknown to the companies, the researchers had asked the customers to create a similar list, showing the top reasons for their purchases.

It will come as little surprise to you that there was an almost total mismatch between the two lists. The reasons that the company thought people bought their products were not the reasons customers actually said was the case. In other words, in spite of millions of pounds being spent by major brands on customer research, they still had diddly-squat of an idea as to what their clients really wanted.

Big data

Nowadays, rather than actually talk to people, companies are increasingly relying on ‘big data’ and all of the analytics that the web can bring. If you want, you can go to your website analytics and discover what browser the person was using who visited your website at 2am yesterday and what computer they were using and where it is located in the world. You can also find out what words they used to search for you, what websites they were on before they came to yours and where they went to next. You are not short of data and information about the visitors to your website. Except one thing – what they actually wanted.

It all reminds me of banks. Years ago the local bank manager had very little access to any data. All that bank managers had was some kind of instinct. They just “felt” who was good for a loan – and most of the time they were right. Then along came credit scoring and data. Those old-fashioned bank managers were sent off on early retirement, allowing the bank to rely on data. Except one major problem unfolded – there was an increase in bad lending. Reliance on data instead of instinct is part of the reason for the credit crunch and the ensuing economic chaos.

Lack of understanding

Now, we discover this week that in a study of several thousands of businesses the most pressing problem they face is a lack of understanding of their customers. The Experian 2016 Digital Marketing Report reveals that the biggest challenge is actually understanding what customers want. Eight out of ten businesses say they have no way of working out a view of their customers.

Yet these are the very businesses that have technology piled high in their buildings and data filling up hard drives as fast as you can say the words “drowning in data”.

How can you possibly understand your customers when you are so remote from them? We now have millions of workers sitting in cubicles in offices facing a screen having never met a customer in their life. Is it any wonder they are desperate to try and find out what they want?

Here’s the solution. If you want to understand your customers, go and speak to them. It’s easy. Honest.

Visit Graham’s website


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