For years, corporations have used big data to make decisions and drive strategy. This is no longer a viable option. Companies aren’t correctly using their data and while the concept remains popular, the current methods of using big data aren’t successfully meeting the need. Corporate researchers and marketing experts still use data without supplying the proper context. Saying that a data point is up or that another has decreased makes no sense without the entire story. Changemakers need to know the goals and what changes will be required to get there. Visionary companies are using smart data instead of big data. Smart data is timely and is used to help transform business operations.
To see the difference, let’s start with review data. Most of those in the service industry consider review data essential to successful operations. Reviews tend to impact a consumer’s shopping experience. Today’s consumers are savvy enough to look a company’s or product’s reviews before purchasing. Positive reviews have a positive impact. Negative reviews have the opposite effect and consumers don’t spend their money with that company or on that product. Additionally, negative reviews tend to earn more negative reviews. However, asking customers for reviews is part of the process and you will always run the risk of a negative review. Reviews are great for the customer and provide them helpful information to make their purchasing decisions. One the other hand, companies often have trouble leveraging reviews in their favor.
With so much information coming in from reviews, how does a business owner interpret the content and put it to use? In the hospitality industry, the total impact of reviews is enormous. Annually, more than 350 million reviews are published online. These reviews appear in dozens of languages and on thousands of different websites. Each review typically has seven data points including the room, the service, the food, etc. Each of these is called a sentiment category and when totaled provide billions of data points. Add it up, and there are billions of data points to understand.
What usually happens with these data points is they are compiled and averaged so business owners can see the review and the score for various categories. But how helpful is this, really? What does a room score of 85 or an overall hotel score of 60 really tell us?
According to industry experts, more than 80 percent of companies struggle with interpreting their data. Most executives have no idea what it all means, so the data is often set aside. What leaders and businesses really need is an insight into what the data is saying. How can it be used to create forecasts, identify trends, improve overall scores and eventually drive more business?
This is where smart data can help. Most data companies realize that providing raw numbers isn’t doing much for their customers. Their clients need data that can be used to create organizational change and foster improvements. This is harder than it sounds. There are two primary factors when it comes to smart data: understand the why and use this knowledge to create organizational change.
Once a business owner or manager understands the context behind a score or data point, they can use it so create improvements and drive change. A good example is a hotel room score. If the review is negative, the hotel management can use smart data tools such as TrustYou to understand what is driving the low score. This information helps management understand the problem.
They discover their room scores average 62 over more than 4,000 reviews in the last month.
Once they check into the why they discover it is because the rooms weren’t cleaned and the climate control system wasn’t operating properly.
Choosing Where To Invest Based On Smart Data
Every manager or business owner knows that not every complaint or negative review results in an investment of funds. What they do provide is information that helps identify current or potential problems. Businesses can then use this information to determine which investments will result in the biggest improvement to the bottom line.
One of the newest and most powerful tools for this process is Impact Scores. This is a new element in the TrustYou analytics and allows hotel management to determine which improvements will have the greatest impact on their overall review rating. The model tells management just how much change will occur in a given review category score based on improvements to certain factors. To demonstrate: an impact score of -4.4 in cleanliness is telling management that there will be a 4.4% drop in the overall score for every negative mention about cleanliness. Management can then bring about the most positive change by focusing on improving the review categories with the highest negative impact scores.
What it really comes down it is collecting the right data and making it a change agent. Using smart data instead of big data to drive change and create organizational improvements is the way to grow the business and attract new customers. When a business can look to its data and see where improvements are needed, they can then make the necessary business process or organizational changes to see improved results. Reviews provide a wealth of information and when companies know how to correctly interpret the data, they can build a better brand and grow their business.
Image Credit: one photo/Shutterstock
Author : Cormac Reynolds
I’m an online marketer who loves the freedom big data gives to make decisions in everything from my work to society. We’re entering a big change to the way we do things and it’s exciting to be part of it.