Big Data v Customer Value: The Dawn of Mediocrity

Big data harbors great opportunities for companies and customers: Companies realize higher profits as a result of improved customer intimacy, enhanced product innovation, and more focused operational effectiveness. Consequently, customers get more value from products that seamlessly fit their needs. That’s a true win-win value proposition… Or so some would have you believe. 


There’s nowhere to hide anymore. There’s no hiding who we call, what we eat, where we go on vacation, when we surf the Internet, how we date. The illnesses we get, the products we like, the movies we watch, it’s all out there. Every day, more and more data is being gathered, stored, connected, analyzed, and monetized. Big data is an unstoppable force whose size will grow from eight to 35 zettabytes (1 zettabyte = 1 trillion gigabytes) in the next four years.


But do customers and companies really benefit from it in equal measure? McKinsey estimates that the value of big data for companies will reach well into the trillions of dollars. However, better insights are by no means a guarantee for increased customer value. For that, a lot more is needed than just the insights. Let me explain this by using the movie business as an example.


Big data benefits for the movie industry

Box OfficeThe movie industry benefits greatly from big data. Of the 30 highest-grossing worldwide openings (adjustment for inflation doesn’t materially change this list), 19 movies were released less than five years ago. Right about the time when big data started to blossom into adulthood. In fact, less than six months ago, for the very first time, two movies surpassed the magical opening sales barrier of $500 million.


Let’s face it, sifting through extensive social and other data enables the film industry to make movies that more people want to watch. But, here’s the catch, that doesn’t necessarily make the movies better. First of all, there is little to no variety in the genre of successfully opening movies. A whopping twenty-seven of the 30 are either sci-fi or fantasy movies. As for creativity, or lack thereof, consider that twenty-six movies are either sequels or franchised. And only seven of the 30 movies have an IMDB-score of 8 or more.


Big data as compass towards mediocrity

Moviemakers seem only interested in making easy money on movies that more people want to watch. They seem to have no interest in actually delivering what they promise. Last Friday, I was the victim of this phenomenon. For well over a year, effective PR and marketing propelled customer expectations for ‘Batman v Superman: The Dawn of Justice’ (#BvS) to stratospheric heights. Having watched the movie, however, it became evident that Warner Brothers had not a shred of intention to deliver on these expectations:


There is unanimous consent that this movie was no icon of cinematic splendor, to put it mildly. The storyline was moaning under the weight of incoherence. It was like watching a 151-minute trailer for the #BvS sequel. But it was the out-of-the-blue, near-end-of-movie appearance of Xena the Warrior Princess (or Wonder Woman, who can tell the difference?) that delivered the much-needed, kind-hearted coup de grâce to the movie’s integrity, which, up to that moment, had been spasming in a protracted agonizing death struggle.


Why do moviemakers think they can get away with this? Quite possibly because big data is telling them that people will buy their tickets anyway, regardless of the movie’s quality. And, for #BvS, moviegoers made no exception. With $422.5 million, #BvS realized the fourth highest worldwide opening ever.


If we don’t watch out, big data will become a compass towards mediocrity. We see this happening in other industry sectors as well. The food industry, for instance. Big data provides the food industry with granular insights in people’s taste preferences. Not for the purpose of actually delivering what customers expect and need. Of course not. That would be too expensive. Joanna Blythman reveals in her book ‘Swallow This’ that food manufacturers have invented ‘flavour delivery systems’. That’s a fancy way to describe the shady practice of replacing nutritious natural food with an ofttimes undisclosed chemical potpourri of “flavourings, glazing agents, improvers, anti-caking agents, solvents, preservatives, coloring acids, emulsifiers, releasing agents, antioxidants, thickeners, bleaching agents, sweeteners, chelators…”


Don’t ‘sell the sizzle’ without serving ‘the steak’

Mediocrity is the unavoidable byproduct of companies who focus on ‘selling the sizzle’, but forget that, ultimately, no matter how appealing the sound of ‘the sizzle’, customers don’t want to be served anything less than ‘the steak’. Companies who decide to serve anything less may get away with it for a while. But, ultimately, customers will stop being fooled. An expensive lesson that Lionsgate learned after they released their ‘big data-proof’ Gods of Egypt.


PixarlogoPixar, by contrast, is a wonderful example of a movie production company that is committed to ‘serving the steak’. Their philosophy: “You cannot base a whole movie on just the imagery alone. It has to be the story and the characters… Pixar’s stories themselves do not end with the credits, but what we take with us and hold on to for the rest of our lives.” And Pixar is well rewarded for this “story first” approach. With a total production budget of $2.2 billion, Pixar has generated a total of $9.8 billion in worldwide sales. That’s a factor 4.5, which significantly exceeds the 3.5 average of the top 10 movie production companies.


Meaningful and sustained growth comes from delivering meaningful value to your customers. In addition to customer insights, companies need the commitment to deliver customer value. They need (a rekindled) passion to deliver what they promise. Bill Livek, Chairman and CEO of entertainment measurement company Rentrak worded this as follows: “Some things you just can’t research. You need to combine information with art and common sense. Data mainly reacts to historical trends. Why do you think there are so many sequels?” Good point!

Ewald Jozefzoon

Ewald has 20+ years of broad b2b and b2c experience helping companies across Europe and the US (1) professionalize & manage their marketing organizations, (2) develop and launch brands, products & services, and (3) create new commercial opportunities based on market & business intelligence.

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