Is There A Bug In Big Data?

Big Data, what exactly does that mean?  Big data combines all of your information and lets marketing companies target you like never before.  And yes it is increasing sales, but not like it promises, but don’t worry they won’t tell you that part.  Frank Kern is famous for saying “Whoever can spend the most to get the customer will get the customer.”

That motto has become the battle cry of startups raising capital. And he is right.  If you spend $15,000 to sell me a $500 watch, I will probably buy.   Businesses need money to spend on attracting customers, and some of those billion dollar IPO’s show how many people believe in big data and spending to get a customer.  Never confuse Big Money with Smart Money.

There are two major problems with this Big Money approach.  The first is, you can still spend more to get your customers than you make and run out of money before the income exceeds outgo.  Big Data can’t fix bad money management.  This is why so many promising companies have big IPO’s and then tank.

The other problem is that we are humans, not machines.  We can change our minds like the wind.  Just try and get someone to make a quick decision about their meal at a restaurant.  One minute we are craving donuts and the beacons are sending us deals on donuts, and we suddenly turn right into a ramen shop for some hot noodles.  Could you imagine sitting down at a restaurant and food just showed up?

Amazon recently applied for a Big Data style patent that would do just about the same thing.

Amazon’s patent is for a predictive algorithm, they think they know what you want and will ship it to you before you actually buy it.  The idea is that you will like the item enough when it shows up that you will keep it and pay for it.  Talk about the man keeping your wallet empty.  I’m opting out when that is added to the Eula.

This bothers me for two reasons, first the consumer is losing a little more control over their finances.  Credit cards are a bad enough deal.  It is our lack of ability to delay gratification that gets us in to trouble.  Now Amazon wants to put gratification on your doorstep before you actually ask for it.

The second reason is Big Data is still wrong, a big percentage of the time, and I believe that Amazon is banking  on the fact that the return rates are reasonably constant among direct shipped product.  A very small percentage is ever sent back.  I know I am a pain to Amazon because if it doesn’t work, I send it back period DOT.

More importantly Amazon always seams to be behind my purchases by about three days.  For example I recently started looking for a very specific camera that shoots in a format called RAW.  My wife is a pro photographer and this particular camera was highly recommended by her coach.

After I bought the camera, my inbox was flooded with adds for the same camera.  Websites with Amazon ads on it started displaying the same camera.  Does this mean that every time I buy someone a gift, I’ll get one three to five days later?  Does it mean that if I buy parts for my old cars, I’ll get another part a few days later?

Reading Amazons patent application and watching what Amazon does, it sort of says “yes” to both of those questions.

If you are starting a new business, or own a small business.  You don’t need to buy into the expensive mystery sauce of big data.  You just need to follow a few simple rules.

  1. Never be the Low Price Leader. – Amazon and Wal-Mart will crush you
  2. Build your business for your customer, not for you.
  3. Treat your customers like the gold that they are.
  4. Ask them what it will take to get them to come back and bring their friends.

If you reverse the rules, you get the four biggest mistakes I find when businesses come to me for help.

Walt Disney didn’t have Big Data when he created Disney Studios or Disneyland and yet people keep coming back and bringing their friends.

Scott Bourquin is a Best Selling Author©, Speaker and Business Coach.  He helps companies cut through the fluff and fog so they can make more money is less time with less work all while delivering more to their customers.  If you are ready to take your life and business to the next level, you can reach Scott at the Bourquin Group or pick up one of his Easy Guide Books.


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