After having defined the business snags their company is struggling with, managers would do well to start working backwards before embarking on an analytics driven project. Spending quality time on identifying what kind of data they need, what information they actually require to provide them the knowledge they lack will help identify the right kind of raw data they require, which will then make it easy to deconstruct and interpret data in order to provide solutions that fit perfectly.
Analytics has become a powerful business tool today, but like any other tool, if it is misused, or not used to its full potential, the results can turn customers off instead of luring them to you. Here are three ways in which faulty use of analytics can harm a business instead of helping it.
Over personalization: Whether you’re automatically sending marketing emails based on previous clicks, or following your website visitors around the web, personalizing the online experience based on big data and analytics is arguably the most advanced marketing strategy available today. But have you given a thought to the fact that your focused targeting and personalization can misfire or that your analytics-driven marketing tactics can turn your customers off (or worse, creep them out), in the process hurting your bottom line instead of helping it.
Knowing too much: With data becoming increasingly granular and throwing up detailed demographics and psychographics, businesses are creating highly customized offers that they think will steer consumers to the right product or services at the right moment, at the right price, and through the right channel. However, customers have experienced that sometimes these offers are indiscriminately targeted pitches as they have already bought the offering. A retail bank for example discovered that its next best offers were more likely to create ill will than increase sales.
Invasion of privacy: It is generally assumed that there is a certain level of privacy on the web. Even if they don’t make a conscious decision to remain anonymous, they typically like to keep their online activity to themselves, at least until they voluntarily choose to reveal their identities. However, online privacy has eroded over the years while society at large is still innocent about the role of technology, marketing, privacy and acceptable trade-offs. The trade-off here is that people accept a reasonable amount of privacy-loss for the “free” Internet, believing that it is foundational to the quality of our lives.
Businesses are now at a crossroads between data quality and data results. It’s no longer enough to dabble in analytics and come out with solutions required for informed decision-making. Integrated systems across the IT infrastructure must champion the cause of improved data collection and governance of that data.