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Why Small Data Makes a Big Impact on Understanding Customers

By Janrain Team | Posted on August 18, 2016

Why Small Data Makes a Big Impact on Understanding Customers

It’s time to sweat the small stuff. Most companies know big data is impactful as it analyzes large data sets to understand patterns, trends and interactions. But what about small data? If big data is all about finding correlations, small data is about finding the causation and the reason why.

Small data is using small data sets to make a big difference. In identity data, this can be tiny data elements – like a Facebook like – that give perspective and view into who a person is and how a company might be able to influence that particular customer.

Creatures of habit

We are creatures of habit. 46 percent of what we do, we do every day. This creates both opportunities and challenges for companies.

The challenge: Customers are often set in their ways. By spending almost half of their day repeating the same things, there isn’t much room to try something new. They know what they like and it’s hard to persuade them otherwise.

The opportunity: Companies can use small data to understand customer habits and find ways to cater to them. Does someone tag the same place on social media multiple times? Are they liking certain products? Where do they eat lunch during the week? What possessions mean the most to them?

Companies can take these small insights and place themselves in customers’ paths. They can be where the customer is and they can use the data to know which types of products to promote use these insights to change company strategy and find new ways to reach customers.

Use small data to build a better experience

In his book ‘Small Data: The Tiny Clues That Uncover Huge Trends,’ Martin Lindstrom suggests companies use small data to come up with hypotheses about customer behavior and then validate those with more research.

Companies must go beyond digital dashboards to find ways to connect with customers on an emotional level. This means using offline experiences and digging into identity data to help inform decisions on creating the customer experience.

Lindstrom uses an example of when he was visiting IKEA in Stockholm and was looking to meet with the CEO. When he asked where he could find him, employees pointed him toward the checkout. Sure enough, Ingvar Kamprad was checking out customers as a cashier. When Lindstrom asked him why, he responded, “Because this is the cheapest and the most efficient research ever. I can ask everyone why they choose it and why they didn’t choose it.”

Using small data to gain loyal customers

Companies can use loyalty programs to get to know people better and build better personalized experiences. But to make it successful, companies need to go beyond just swiping cards to gain points.

“People don’t want more rewards or points, they want brands to help them in their everyday lives by offering exclusive or personalized benefits, symbols of belonging or unexpected surprises,” said CEO of InSites Consulting, Kirstof de Wulf.

To really create loyal customers, companies need to use small and personal insights to stand out. Customer engagement and identity management platforms play an important part in helping companies gain these insights.

To learn more about our Customer Engagement Insights platform, go here.

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