Customer Experience

Forget Big Data – Focus on Small Data

In their rush to jump around the big data bandwagon, many organizations have lost sight of a much easier yet effective source of customer insight: “small data.”

Big information is about synthesizing, mining and analyzing mounds of seemingly unrelated information to derive actionable insights about your customer. It is a complex science but one that may be leveraged to understand and engage customers in new, surprising or even creepy ways. (Consider the well-documented case where retailer Target figured out that a teenage girl was pregnant before her father even knew-merely by analyzing her purchase history data. See “The Challenges Around Big Data and the Lessons to become Learned.”)

In contrast, small data is about hearing and observing your visitors intently, picking up on simple cues where you can better personalize and customize your interactions with them.

Small data doesn't require supercomputers to decipher. It isn't really a new idea, either-it's just a new moniker for a tried and tested approach the best sales and repair people have employed for decades, if not centuries.

That will make small data sound quaint and old-fashioned, but don't be fooled. Utilizing it can actually increase your business' customer experience of very material ways, without the expensive overhead associated with big data solutions.

To get a flavor of how small data can influence your customer experience, think about these examples of the strategy apply:

o Delta Airlines' 800-Line Greeting

Presuming a customer calls Delta from a phone number the airline is wearing record, the 800-line voice response system will skip the conventional pleasantries and prompt you having a question such as “Are you calling about your delayed flight?” When the response is yes, then Delta immediately routes the caller to an automated service or a live representative who can help, obviating the necessity to navigate through a series of menu options.

Once the incoming telephone number is identified, Delta's systems check to see if the customer has reservations approaching, or if perhaps a flight on that day continues to be delayed or canceled.

That's not really a terribly complex undertaking from a data perspective, because it is a comparatively simple look-up exercise, as opposed to a full-blown analytics task.  Yet it yields a far greater and much more efficient customer experience, particularly at a time when passengers might be frazzled about unexpected alterations in their departure date.

o Ritz-Carlton's Personalized Guest Experiences

The Ritz-Carlton luxury hotel chain is renowned for its ability to create highly personalized guest experiences. When the Ritz in Boston learns that the guest is allergic to feathers, then your Ritz in Dubai-half a world away-will de-feather that same guest's room just before arrival.

How does the company do this? Ritz staff are educated to listen carefully for guests' likes, dislikes and general preferences. They are small bits of data (like a favorite newspaper or snack, or perhaps a preferred room location) that Ritz-Carlton employees dutifully record in a customer database dubbed “Mystique.”

They're also trained to consult that database prior to a guest's arrival and act on any relevant information they find. This can help make sure that any previously captured small information is accustomed to create an unusually customized guest experience during subsequent visits.

These two examples come from outside the insurance industry, but the approaches they illustrate are often transferable. It's simply a matter of putting your antennae up and searching for small pieces of data you can use to provide a far more personalized, relevant and anticipatory customer experience.

Consider the little data which can be found to insurance carriers-data that, if captured and capitalized on, could generate some very positive customer impressions:

o Children's Ages

By recording details about a customer's children during an initial needs analysis, insurers can engage the insurance policy owner to assist in stressful parenting periods, such as whenever a child approaches driving age.

While identifying households with youthful drivers is not a new idea for insurers, by using their information to strengthen the client relationship is. Historically, such data has been utilized by insurers to address situations where a new, uninsured driver may be driving (to adjust premiums).

However, the identification of the youthful household driver shouldn't just be an exercise in rate adjustment. It is also a chance for the insurer to demonstrate the worth it provides-in this case, by communicating relevant information to oldsters that can help them navigate a hard family transition (e.g., determining what resources are available to teach their son/daughter how to drive or how they may best ensure their child's safety when they learn to drive).

Using small data in this manner creates a customer experience that appears strikingly prescient towards the policy owner, essentially addressing their concerns and questions before they can are able to boost them.

o Sales

For certain kinds of commercial lines coverages, insurers have visibility into business performance measures for their clients (for example sales), which are recorded annually via premium audits.

Here again, just like youthful drivers, the industry has traditionally used such data exclusively to adjust premium rates for coverages that are tied to these business metrics. But this small data can be much more useful.

Consider the very first time an industrial lines customer crosses over the $10 million revenue threshold. That's a milestone that would be reflected within the small data most insurers collect, yet few do anything with it, other than raise premiums.

Imagine if that customer received a handwritten note from his insurer (or agent) per month after renewal, congratulating him on reaching that milestone. Imagine how that small token of recognition would make the client feel.

Business owners, after all, don't mind regarding their business insurance-but they do care about their business. When their business grows, that affords an opportunity to celebrate alongside them, to provide them a “pat on the back” they likely weren't expecting using their insurance provider and can remember fondly.

o Recurring Information Requests

At Ritz-Carlton hotels, if your guest requests exactly the same newspaper, snack or room location visit after visit, the staff will notice and employ that small data to shape the customer's future stays.

There is definitely an analog with this in the insurance industry. Think about the reports along with other information materials that a policy owner requests year after year-e.g., a commercial insured requesting updated certificates of insurance for her core group of clients, or perhaps a corporate risk manager requesting loss reports sorted by site.

Every recurring information request represents a piece of behavioral small data you can use a customized policy owner's future experience.

Imagine if your policyholder didn't even have to make those information requests, just as the Ritz-Carlton guest who's allergic to feathers need not request a feather-free room.

Imagine if the insurance provider, with different policyholder's prior history of information requests, offered all of those reports and certificates to the customer at precisely the proper time every year.

That will be the epitome of a more personalized and effortless customer experience, all permitted simply by acting on a piece of small data.

Small data might be less glamorous than its more buzz-worthy big data counterpart, but it's believe it or not important.

Big data has its merits, but as the “shiny new object” that every company covets it has unfairly eclipsed the value of simpler and much more straightforward causes of customer insight.

Better understanding your customers and her needs doesn't always require intense data crunching and sophisticated analytics. Often, what's really needed is just a supervision, an attentive ear and also the discipline to act on whatever insights you uncover.

Because when it comes to creating a positive, memorable and personalized customer experience, small data can have a really big impact.