In times gone by, decisions made by business leaders often weren't scientific enough. Now, the opposite extreme is happening -- there's too much of a dependence on data. As a result, companies risk losing their connections with customers.
That's the cautionary note sounded by Steve Stoute, founder and CEO of brand-marketing firm Translation, who recently spoke on the issues and opportunities at the intersection of marketing and big data, explored
at The Paley Center for Media’s International Council Summit. Stoute, author of The Tanning of America
(soon to be a documentary on VH1), says decision makers need to strike a better balance between gut-level instincts and hard data.
"Over the last three years, we've heard the term 'big data' used very frequently," he pointed out. "A lot of corporations believe they have it figured out now. But they stopped using their good instinct. I do believe that data should play a big role of course -- it always should have played a role in decision making. However, you can never get away from what your gut instincts and your feelings actually tell you."
A number-crunching-only organization will lose any ability to connect with customers, Stoute warned. "You don’t want your business run only by accountants who rely on data," he said. "You want to have marketing and an understanding of consumer behavior to be part if it. I'm seeing reliance on big data too often making the decisions for the company and them not understanding the consumer in making that decision.
"Ultimately, depending on what business you’re in you have to look at sales, and what's working and what's not working," Stoute said. "There’s no math behind how you can use your art of understanding consumer culture, and taking data to effect that. I think they’re mutually exclusive."
An organization with entrepreneurial spirit will overtake a purely data-driven organization every time, Stoute believes. "I would argue it's about having the right executives -- bringing entrepreneurs inside a company. Entrepreneurs tend to make those decisions very well. They haven’t lost their gut instinct, they haven’t lost their fire. You need to have creative entrepreneurs inside of a company. You can't have a bunch of accountants sitting around trying to figure out the art."
Another tech-driven trend, social media, is also more hype than actual delivery of business value, Stoute added. To illustrate, he pointed out that some companies have social media followers that number in the millions. However, the impact on their sales and revenues is often negligible.
"It's not so much about the numbers, its about the community. You have to have a truly engaged consumer to see results from social media. You need rich content, people constantly involved, people paying attention and having that active dialog. Most brands do not have that. Nokia has 11 million Facebook fans, and that’s where it ends. Out of everything people take their leads from, the number-one lead is still advice from a friend. If I say I like this experience, I like the product. That trumps all marketing."
This post was originally published on Smartplanet.com