Wednesday, February 24, 2010

You Can’t Datamine With No Miners

I’m very pleased to see the social media return on investment (ROI) debate being taken to the next level with more sophisticated discussion coming from strategists such as @briansolis @thebrandbuilder and @loic


Those of you that have worked in direct or database marketing will know that the real problem with collecting so much customer data is not in the ‘getting’ or the ‘having’ but in the ‘using’.


I used to work for a nationwide retailer with 350 stores collecting scan and consumer data. We would often joke about the paranoia from customers about the detailed information that we kept on them and that we as big brother “know what colour undies you wear to your store.”


Truth was—the information got swiped into the database at point of purchase and, for the most part, that’s where it stayed. Most companies in New Zealand have cut back on their marketing teams and dedicated, in house analysts are rare as hen’s teeth. A lot of large retail operations, like banks, have moved to generalist marketing teams that work on a project basis to save costs after the recession. Most simply don’t have people with the time or the skill set to sit and mine data and make meaningful business decisions with it. Not to mention record cleaning and system convergence issues.


One of the most insightful analysts that I’ve worked with on consumer purchase data spends most of his time doing historical, reporting work. His company isn’t resourced to have him doing more than the bare basics in his 40 hour week. There’s nothing wrong with that but I think some of the hype on dynamic product customisation and customer segmentation is just that- hype.


Retailer Tesco have done some very sophisticated card-based marketing work over the years and customised store offers based on real-time store data. What the glowing case studies forget to mention is that Tesco had up to 100 full time analysts mining the data and managing communications back through buyers, promotions and store teams. That’s a huge investment and one that most companies are not (and maybe should not) make.  You have to look at the total business case.  


Be straight up with companies and let them know the true resource commitment upfront. That includes community managers, trainers and analysts.


Yes there’s a big mine out there, but you need miners. Not software applications, real people with lights on the heads.   


Further reading: ROI: How to Measure Return on Investment in Social Media @briansolis

Posted via email from cjlambert's posterous

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