Big Data Analytics Versus the Gut Check
The term big data analytics at first blush appears to be the collection of large volumes of information to be analyzed. And while it is in part, it is more importantly an approach to understanding the relationship between factors affecting business. The gut check on the other hand is a less scientific method, often referred to as intuition or gut feeling it is a subconscious instinct tied to personal feelings of ethics and beliefs.
In this article we will look at 1) big data analytics in really simple terms, 2) what is gut check, 3) big data analytics systems, 4) 6 main limitations of big data, 5) gut check limitations in marketing, 6) analytics win over gut check in surveys, and 7) the future of marketing: a marriage between big analytics and the gut check.
BIG DATA ANALYTICS IN REALLY SIMPLE TERMS
Big data is the collection of large amounts of structured data which is information in a fixed field like a spreadsheet and unstructured data, which is, according to webopedia.com,“information that doesn’t reside in a traditional row-column database,” like word documents, emails and texts. The three aspects of big data or the three V’s that are used to characterize different aspects of the collected and stored information and used to help in the analysis.
Data is disorganized, as the sources tend to be diverse and plenty. Different browsers send different data and with human input, there is always error and inconsistencies needing to be arranged.
Being able to process large amounts of data is what makes data analytics such an important tool of business. All companies collect data, yet stored data is of little use if not processed and analyzed. This is where data warehousing and processing databases come into play. Software such as Apache Hadoop, gives access to data analysis to all types of companies because of its unlimited capabilities.
Data flow is constantly increasing and it is to the companies’ benefit to gather and use the steady and fast moving flow of information to their advantage. With technology being the way it is now, companies can stream data into warehouses and process in larger batches when ready, thus taking the process quickly from input to making critical decisions.
WHAT IS GUT CHECK?
The idea of gut check refers to a subconscious instinct developed by our social interaction and cultural influences. This unconscious decision-making process is quick and quite hard-wired and has been vital to our survival as humans. Since gut check includes a heightened perception of cues from our environment and it is important to also possess an inherent ability to interpret those cues to our benefit. According to an article on this topic, “In our dealings with other people instincts are important. Our social skills have been wired into our subconscious. However when it comes to our interface with technology, then instinct must be learnt and grounded in experience to be of greatest value.”
BIG DATA ANALYTICS SYSTEMS
This branch of data mining is focused on the future in terms of probabilities and trends. The predictor, central nerve of this model, is a variable, which is usually measured on a number of different levels. Multiple variables are combined into models to somewhat accurately predict future possibilities and behaviors. Once the predictive models are made, they are further validated and at times revised to incorporate new information. Softwareadvice.com has a comparative list of the top ten predictive analytics software and reviews for each.
Data mining is focused on identifying relationships and patterns that have not previously been recognized. The steps involved in this process include association, sequencing, classifying, clustering and forecasting. This method is used in many areas of research including marketing to pin point behavior patterns of consumers.
Data visualization software
Data visualization software is a technology used to classify data in a format that allows users to be able to better understand it and put it to use in their business. Unrecognized relationships and trends are easier to spot with this software and methods of visualization include anything from the basic spreadsheets to infographics and heat maps. These days data visualization technology is usually embedded into business intelligence software to enable users to interact, change or analyze information with more ease and clarity.
Statistical analysis is the collection and careful observation of all data samples to identify trends and find patterns. The process is broken down into 5 steps:
- Describe the nature of the data to be analyzed.
- Explore how the data relates to the demographic
- Create a model (grouping documentation) that summarizes the relationship between the data and the population.
- Validate the model
- Run predictive analysis to help guide future decisions and actions.
Also known as text mining, this method of analytics is focused on recovering information from unstructured data, turning them into numerical values and linking them with structured data. This helps firms to gather valuable business information that gives insight into customer sentiment, emotion and relevance, nuances often missed by statistical machines techniques. Text analytics technology is still relatively new and developing, so results of analysis tend to vary depending on the vendor.
6 MAIN LIMITATIONS OF BIG DATA
1. Big Data measurements could be considered Invasive
While Taylorism was focused on gathering data through scientific processes to ensure economic efficiency and labour productive workforces, today’s research goes deeper and into more personal areas. Data mining focuses on finding every bit of information that has to do with customer satisfaction, behavior, thought processes and day-to-day behavior. Though this customer focus makes for better products and interaction between companies and their target market, the constant invasion into people’s personal space and motivations can be construed as a “ Big Brother” type of movement.
2. Big data lacks social factors that make us innately human
Datafying is a term used to explain how information is put into a format so it can be analyzed and categorized. An example shared by a new republic.com article, is of the way “Twitter enabled the datafication of sentiment by creating an easy way for people to record and share their stray thoughts, which had previously been lost to the winds of time.” So in essence big data does not have the capacity to truly capture human social graces and true human emotion, it simply allows thoughts to be shared.
3. Creates smaller world
Technology allows for connection to other people’s emotions, opinions and thoughts that are not necessarily the same as ours. With big data analytics and other categorizing data technology, we are being lumped into groups based on our online preferences and behaviors. With this sort of categorization we are constantly inundated with images and advertising tailored to our tastes, which keeps us stuck in our “own little worlds,” so to speak. The new republican article reports that it is called the “filter bubble,” a general avoidance or falling of the public sphere to allow for focus on individualized news feeds and interests.
4. More informed not wiser
With the real time flow and update of data, we are being fed more and more information. This keeps us more educated on many different topics, but not necessarily wiser about much of the same topics. To develop wisdom takes time and patience, not the drive through knowledge update system that big data and other information flow systems promote. Smart organizations move with constant feedback and data, but wise organizations take time to notice long standing patterns and use them to benefit themselves and their customers.
5. Eliminates ambiguity therefore creating a sense of being too obvious
As in life mystery and the unknown can add an element of challenge and growth to a company. By treading the murky waters of the ambiguous, businesses develop innovative skills and learn how to handle unpredictable circumstances. With big data analysis, businesses can forecast and track patterns and trends, but it all becomes one expected plan or trend after another, with very little room for the things yet to be discovered or experienced.
6. Does not come up with new ideas
Big data analytics does help with solving problems and coming up with solutions. But in terms of creativity it is sorely lacking. Only human ingenuity can truly create and innovate and bring new ideas to the market. So while big data does give us many advantages, it does not provide genius new ideas for the company or the marketer to bring to the consumers.
GUT CHECK LIMITATIONS IN MARKETING
Steve Jobs once said, “you have to trust your gut, your destiny…” And just like big data is scientific, gut feeling is human and intuitive. However, it does come with its own set of limitations that should be considered as well.
Lack of Impulse Control
Working from your gut with little or no scientific and precise data and little impulse control could be a disaster. While intuition is great, reality based testing is needed to ensure the decisions a company or its marketers make are sound and good for business.
When making crucial business decisions, the majority of leaders of industry describe their decision making approach as empirical or data based. Using intuition or the gut check then without scientific backing is unorthodox but not unheard of. Economic Intelligence Unit carried out a survey of 175 organizations which found that most executives question information that contradicts their intuition, even though they understand the danger of trusting their gut.
Bounded rationality defines the limits in our understanding. As humans we are unable to rationalize things we do not comprehend and as such, we are bounded by what we can rationalize. This is when our gut instincts kick in and if we are not thorough and using some scientific data to back the feeling, we could fall into the trap of relying too heavily on our gut and not trying to learn and seek deeper understanding. This is especially useful when doing market research and learning about behaviors of consumers that do not match the realms of our own rationality.
When there is a conflicting belief in our minds, we adjust to encourage harmony. The foreseeable problem with this psychological need for cognitive consistency is we may distort the facts to match our instincts if we are not basing our decisions on data and science. This can be detrimental to a business and any proposed marketing campaign.
ANALYTICS WIN OVER GUT CHECK IN SURVEYS
Despite personal beliefs and gut instincts it always makes for better business decision making to find information, interpret and use it correctly. In 2012 a number of surveys of thousands of companies were conducted to find out what gave certain businesses the competitive edge. It turns out the use of data analytics was the main tool to gain this advantage.
Analytics Define business success over instincts
Companies around the world that are making billions of dollars are using data analytic insights to develop operations, products and services. And based on surveys it appears these companies are twice as likely to experience top financial performance, cutting edge decision making and come to those decisions faster.
Helps with the improvement of information and therefore better performance
There is a direct link between increased performance and the use of data analytic strategies. These top performers were not only getting the right data, they were also managing the amounts and understanding how to apply the information to the improvement of their business.
The use of big data analytics in market research improves product launch and innovation
Finally and just as prominent for businesses is the use of data analytics to increase product success rate. The research claims, that companies that use an idea to launch process along with advanced market research, experience three times the success their competitors have when launching new products and innovative ideas.
FUTURE OF MARKETING: A MARRIAGE BETWEEN BIG DATA ANALYTICS AND THE GUT CHECK
So far we have seen that data analytics work to give business the competitive advantage, but have some limitations that need to be filled in by human intuition. When combined to balance each other, the best results will be measurable and obvious in the company’s performance and product launch success rate, among other things.
Companies need to do the research, gather and analyze the data so they are prepared to fully follow and prove or disprove a gut feeling. And keeping the gut check in check with scientific analysis of the tremendous amounts of data available to each business is the ideal balance for success.
Human Input helps Data Analysis
Simply put, machines are great at reducing errors and creating figures, but when it comes to getting the right kind of information, businesses and especially marketers will have to rely on human input to help them determine what customers need, what data should be used and what should be dismissed.
Leveraging big data depends on use of Information from all relevant sources
Top performing companies that manage the information streaming in to their data warehouses use all the available sources to get the best vantage point. Analytic specialists can provide vital information about the numbers but production workers can also provide information that would not be otherwise accessible by company executives. A wise marketing team will recruit information from every possible source and use it all to ensure the company is performing at the highest level.
Balance the limits of Big data and instincts
Without human assistance machines would be useless, and inversely without the scientific methodology behind big data analytics people would have to rely on their feelings whether wrong or right. By leveraging the two, companies could out perform the competition that depended solely on one or the other and double or triple their profit over time. The ideal market research and information management plan should be to blend big data analytics with the gut check and allow hypotheses to be proven or disproven, while allowing intuition to be the innovative force it can be.
Over the past few years, traditional business and market management have changed dramatically in …