Want to reduce the time your used car spends at the repair shop? Buy a used car in an unusual color – like orange.
Want to drastically increase sales on your site? Change your font color.
These are just two examples given by Manish Goyal and Homayoun Hatami (both from McKinsey) in the latest Harvard Business Review webinar entitled “Mining Big Data to Find New Markets”. In the first example of the used car, delving into big data discovered that owners of cars with unusual colors take better care of them, so if you buy it, you’ll most likely have less repair costs. In the second example, Google tried out dozens of shades of blue on 1% of their pages and found one hue that really made a big difference in clicks. This color change netted them $200 million in revenue.
Got your attention? Well, it got mine too! So what is “Big Data”? It’s the use of large data sets – both internal to the company and external – to take the guesswork out of selling. It came about in the past few years as companies had limited resources and wanted to use them more effectively. They found that by using data from multiple sources, they could more effectively target markets (even micromarkets) and use the data in real-time to make real-time decisions. Companies are now able to use this data to increase growth and cut costs.
Where is Big Data? It comes from multiple departments and requires a cross-functional team of about 4-5 people to analyze the data and make the findings understandable and usable by sales and marketing. They must be able to sell the sales reps and marketing department on the findings. If you can’t make them believe it, then your data analysis has failed. The process can’t be a black box.
How can small- to medium-sized companies use it? They must narrow down their choices to 3-4 sources of data to consider (i.e. sales rep coverage, partnerships, competition, etc.), only looking at what’s practical. You may not be able to get detailed targeting of micromarkets, but you will gain some insight.
How does Big Data affect traditional sales? Big Data changes conversations from outcomes-based to coaching-based, which improves communication and increases cross-functional cooperation.
There is risk to using Big Data, however, as your internal data may not be completely accurate, and it may not overlay on external data well. Also, the analytics for this process can be very complex. This process must be seen as a journey of lessons and discovery.
For more information on this topic, the speakers from the webinar suggest the following book: “Sales Growth: Five Proven Strategies from the World’s Sales Leaders”.
