Trying to find the ‘why’ behind customer behaviors? Don’t overlook small data

There’s no denying that big data—large data sets that are analyzed to reveal patterns, trends, and associations—is a boon to businesses, including credit unions. The increasing volume of marketing and customer analytics that big data affords is astounding, and the use of complex data sets continues to grow. A recent Forrester report reveals that over half of brands say their marketing strategy is informed nearly or fully by big data. That’s impressive. But a strong word of caution: Do not abandon “small data” in the quest for big data.  

Discovering what motivates customers

And what is small data? While big data uses information such as clickstream, transactions, point of sale, customer relationship management tools, and demographics to describe and try to predict customer behavior, small data goes one step further and uses time-tested research methodologies, such as quality surveys, focus groups, and one-on-one interviews to discover what motivates customers and causes them to feel and act as they do. Big data looks at WHAT customers are doing; small data explains WHY they are doing it. This is a huge distinction and highlights the essential value of small data.

Defining pain points and monitoring competitors

Let’s dig a bit deeper into small data. The Forrester research confirms that how customers think and feel about a brand are statistically significant drivers of loyalty, advocacy, and purchasing decisions. Researcher Zoe Dowling notes that small data research techniques identify pain points as well as suggest solutions. They can even help to monitor the competition. To be a strategic partner, she says, a business needs to know what its customers are struggling with and what they desire. This means listening to what’s important to them, which is accomplished by asking the customers themselves.

Providing a more in-depth understanding of customer activity

Some might argue that small data is old school or too subjective for today’s hard data-driven environment. Twitter, Facebook, Disney, Southwest Airlines, and Wells Fargo, along with many other top companies, would beg to differ. These companies actively employ small data research to obtain user feedback because they know it provides added depth of insight over big data analytics and completes the picture of customer activity.

Providing the most valuable data: What members think of their credit unions

Big data can be a tremendous asset. But many credit unions are realizing that to provide the best member experience, the most valuable data is what members think of their credit union and the products it offers. Small data is the best strategy to obtain these kinds of insights. Don’t make a significant error by overlooking the small data powerhouse.

For more information about services offered through Cornerstone’s Research Department, contact Doug Foister at 800-422-5762, ext. 6477, or dfoister@cornerstoneleague.coop.