God of small data

Did you know that LEGO, the famous toymaker, turned around its business based on the discovery of an old, worn-out pair of sneakers in the home of a 11-year-old boy? LEGO marketers were visiting their customers in the hope of finding insights that would rescue their rapidly declining business. This boy was such a customer, and he held up his pair of well worn Adidas sneakers with pride, highlighting the angles at which it had worn out, its scuffs and abrasions. Because these were visible signs to his peers and to the external world that he was an expert skateboarder, of the mastery that he had achieved at this sport.

This discovery gave LEGO a clear signal that making far more complex brick games, which were a provocation to children to prove their mastery, would work very well for them. On the other hand, dumbed-down or simpler toys were unlikely to work, particularly in the age of easy internet gaming. Today, ten years later, LEGO has not just turned around, it has become the world’s largest toymaker.

Small data and big data This is an example of small data, which are the data and insights gleaned from closely noticing the everyday lives and homes of people. Even as modern marketers are being increasingly seduced by the charms of big data, and relentlessly pursue insights thrown up through analysis of mountains of digital data, we must remember that nothing, not even big data, can be a substitute for actually observing consumers in their natural habitats. This truth is brought home to us by the best marketing book I have read this year – Small Data , written by the bestselling author Martin Lindstrom. Every marketer should read this book.

Martin Lindstrom spends 300 nights a year in strangers’ homes, keenly observing all the time, and picking up clues such as the worn-out sneaker, that can potentially lead to hugely successful businesses. He constantly looks out for small clues that signal people’s hidden desires, because brands work best when they try to fulfil an unmet desire. These are not clues that big data can naturally reveal, because big data cannot walk around consumers’ homes. However, hypotheses evolved through small data can be validated through big data. He, therefore, makes the case that while big data is valuable, it is incomplete. What provides the most illumination to marketers is combining small data with big data, by spending time in consumers’ homes (and stores and offices too) “watching, listening, noticing and teasing out clues to what consumers really want”.

Clues about real people When marketers observe consumers in focus groups or other formal research locations, many consumers put their masks on, and sometimes they state what marketers wish to hear. However, when we observe people in the midst of their everyday activities, and discover all the stuff that naturally inhabits their homes, we uncover truths which throw up fundamental desires. Here is some interesting and very useful “small data” that Lindstrom has discovered over the years:

Owners of the robotic vacuum cleaner, the Roomba, treat these vacuum cleaners as pets. They name them and take pride in showing them to their guests. They leave their vacuum cleaner peeking out from under the sofa, so that visitors can easily see that they own Roomba cleaners. Therefore, “cute” looks and sounds, and not simple low-cost designs, are critical to Roomba’s success. This is exactly what Roomba did, based on this insight, to successfully overcome a drop in revenues and drive growth.

Many shoppers in the US feel the desire to be really free, to be kids once again – because they live in a society where they have to be politically correct, in a physically vigilant culture where no adult touches each other, in a post-9/11 community where an underlying sense of fear always exists. Observations in American communities threw up this insight consistently. Lowes Foods, a retailer, used this insight and built playful food stations within their stores, called SausageWorks and Chicken Kitchens, where consumers can dance and sing in a ridiculous but liberating, child-like way, before they are handed their purchase of chicken with both hands. This has worked like gangbusters, and Lowes Foods is back in growth, beating off the internet challengers by connecting uniquely with the desires of its customers.

How people store their toothbrushes, and the colour of the toothbrushes they buy, can say a lot about their unmet desires. If toothbrushes are kept standing upright in a cup, with bristles facing upwards, this is evidence that the owners tend to be less sexually active. If the bristles face downward, that is a clue that the owners are people who ignore trouble, burying their heads in the sand. And the colour of toothbrushes? Forty per cent of all toothbrushes sold across the world have red handles, except in Saudi Arabia, where observations show that only 2 per cent are red in colour. Small data such as this led to a powerful insight for a new Saudi Arabian business.

Marketers and Sherlock Holmes While most marketers do not have the luxury of spending virtually the entire year in the homes of consumers mining insights, it is still possible for each of us to become a little bit of an amateur Sherlock Holmes, even for limited periods of time. This will make us “small data scientists”, and we can bring back insights which can power our existing brands, or even help us invent new offerings.

For this to happen, marketers require to develop the power to notice, a capability which both Sherlock Holmes and Martin Lindstrom demonstrate repeatedly. Lindstrom puts it best when he says the “habit of noticing, like the habit of letter writing, is a vanishing art” because our cellphones preoccupy us when we are alone with ourselves, and these digital devices keep us from focusing on the people around us, or on our surroundings. I wonder what would have happened if Isaac Newton had lived in today’s digital age – perhaps he would have been so busy texting or Whatsapping that he may never have noticed the apple fall down, which is perhaps the best known example of small data.

Even as they notice things, marketers have to actively collect several pieces of small data that they notice. This helps you create channels of focus, preferably on topics that are relevant to your business. A marketer of wrist watches may wish to notice wrists in particular – all sorts of wrists, young and old, male and female, fat and thin – of the people around him. He may also wish to collect pieces of small data about the apparel favoured by these people. And he may also want to peek into a few wardrobes (with due permission) to see the watches that people own but do not wear regularly, and other attire as well.

Such small data can provide marketers clues on what consumers’ unfulfilled desires are, which they can develop into insights through deep reflection, then validate using relevant big data, before pushing ahead with a new business or product idea. A good way to kick-start a small data effort is to establish a consumer contact programme in your organisation, and the best thing is that this can be done easily, and does not require too much resource either.

I think small data is an essential part of a marketer’s toolkit. If you love the subject of consumer behaviour, the process of discovering small data is not just a useful input to your marketing strategy, it can be a pleasurable activity too. Do read Martin Lindstrom’s book Small Data when you can. It is a brilliant read, and he is the God of Small Data.

Harish Bhat is Member, Group Executive Council, Tata Sons and author of Tata Log: Eight modern stories from a timeless institution. These are his personal views.

bhatharish@hotmail.com

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