Changing mindsets the key to competitiveness

With big data analytics, the trick is to persuade as well as predict, using real-time, holistic intelligence.

Big data has opened up a new realm of possibilities by giving business the power of predictive analytics. But while it’s great to have an accurate prediction of what a customer will do, the excitement over predictive analytics may be distracting us from a bigger, better data goal.

Many companies are having difficulty monetising big data. Predictive analytics produces interesting insights but does not provide a way to drive revenue from those insights. For example, it’s not enough for businesses to know what customers are going to do in the future. It’s about changing behavioural patterns for mutual benefit.

In other words, the real trick is not prediction, but persuasion. Used correctly, big data can deliver real-time, holistic customer intelligence that can influence a person’s next action.

In practical terms, if prediction means knowing a person is likely to buy a cup of coffee in the next hour, persuasion means knowing what you can do to change or exploit that coffee purchase in your favour. Persuasion is imperative if you want to stay competitive.

Why persuaders win

Persuasion is more than just a clever use of big data. It is an emerging business reality fostered by new apps-driven, consumer-influenced behaviour. Chiefly, this means people want low-effort interactions that provide immediate value at minimal cost. Applications (and organisations) that deliver on that expectation are rewarded; all others are discarded.

In this world, a great idea or good value is not enough. It has to be delivered in an integrated fashion using a customer experience that is equal to — or better than — the best app that the customer has ever used before. And these new rules of competition apply to every company in every industry, not just consumer brands.

Amazon or other leaders set the precedent — the expectation of instant gratification — and if your app doesn’t deliver the same to customers, you could become irrelevant. Those who think they are different are the ones that will be blindsided by a competitor.

Assessing readiness

Making the adjustment to this new competitive marketplace requires a change in mindset. Here are some dos and don’ts to thrive in the right-now world of a fickle, consumer-orientated mindset.

First up, the don’ts:

• Don’t rely on business intuition. For the last half century, analytics was mostly opinion, and businesses went with their gut based on the little bit of data they had. In today’s fact-based world, businesses need to do what the facts say if they are to succeed.
• Don’t be averse to failure. No-one learns by being right. Businesses need to experiment, fail and respond to feedback in rapid fashion.
• Don’t shoot for the middle. In today’s world, a business either sells commodities (competing on price and convenience) or quality (competing on brand and lifestyle). Don’t try to be ‘kind of good and kind of cheap’, as that middle has disappeared.

Secondly, the dos:

• Do learn from your own behaviour. Change is driven by every person who uses a smartphone, including yourself. Pay attention to your own preferences and responses, whether it’s in your industry or not, and find a way to mimic tactics that work.
• Do risk being creepy. Intimacy and ‘creepiness’ are the polarities in a continuum, and businesses should test the line boldly. Listen to social media and other feedback to know when you’ve gone too far, and pull back as needed.
• Do create a tiger team. To create an effective persuasive analytics strategy, it’s critical to get buy-in across the organisation. Gather leaders from all key departments — including IT but also marketing, finance, operations, sales and legal. Keep the total number of members small.

Out of the comfort zone

Leveraging persuasive analytics is a business problem, but IT has an important role to play. To support the business in being more responsive and taking on more risk, IT needs to get out of its comfort zone and become adept at calculating the cost of innovation. This means that when ideas are brought to the table, IT needs to resist the urge to say no, and instead give parameters for what can be done and in what time frame.

The other big change for IT is preparing for the ‘jerk’ — the phenomenon of overnight, viral success. If you do something just right, it could be an overnight sensation, with no time to plan your next move. IT has to know in advance how to shift resources to support a big win.

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