12 Sep 2016 14:37 IST

Getting to know the consumer

Big Data is cool, but small data and attention to detail often determine what makes or breaks firms

In the early 1990s, when the Indian economy was opening up to the world, foreign consumer brands began salivating at the prospect of selling to the newly opened frontier of a billion-plus Indian consumers. Market research agencies regularly plied them with breathless reports of the ginormous market that lay waiting for them to tap. Many of these were high on hype, with little or no underlying basis in reality, and sadly for the brands that rolled out their mega-plans for India without due diligence, these reports became milestones on the highway to a hellish rendezvous with India.

That experience is merely illustrative of the perils that beset companies and brands that rely excessively on “macro data” about markets and potential consumers — and not enough on more first-hand, lived-in experiences that offer a more nuanced narrative.

Brand consultant Martin Lindstrom makes much the same point in this iconoclastic book, which shows up the limitations of an excessive (even exclusive) reliance on Big Data, and makes a persuasive case for complementing it with insights gleaned from ‘small data’. In the way that he defines it, Small Data is the accumulated learnings from boots-on-the-ground interactions with consumers (or potential consumers) and up-close and intensely personal observations of their activities of daily living.

Up close and personal

Illustratively, as part of his information-gathering process, Lindstrom walks into perfect strangers’ homes and observes everything about them with a clinical, forensic attention to detail that would do Sherlock Holmes proud. With his subjects’ permission, he peers into their wardrobes and fridges and even toilets, walks with them to a supermarket or a retail store to see how they shop, and at all times observes their body language.

He asks to see their photo albums, and studies their social media posts: what they like, what kind of an image they are projecting about themselves… Heck, he even mucks around in their garbage bins!

And in his interviews with his subjects, he asks probing questions on topics that may seem unstructured, making the whole process seem like a bit of a fishing expedition. But out of all that chaos of information, some order, some insight, seems to emerge, from which businesses and brands appear, by available evidence, to profit.

Illustratively, in 2003-04, the Danish toymaker LEGO, beset by falling sales and on the brink of bankruptcy, concluded (on the basis of reams of Big Data studies) that millennials, who were technology-savvy digital natives, did not have the attention span required to be its brand-loyal customers. The company was considering making its construction challenges simpler by making its bricks bigger.

However, a visit to an 11-year-old German boy’s home — and a chance observation about the serrations on an old pair of sneakers that he prized — turned the company’s fortunes around. Evidently, the boy was a skateboarder, and the precise serrations were testimony to his skateboarding proficiency, and a kind of social currency. It convinced LEGO that children pride themselves in mastery of any skill that will secure validation from their peers.

Based on this insight, LEGO went the other way – by offering more complex challenges, with even smaller bricks. It proved a phenomenal success, and barely a decade later, LEGO became the world’s biggest toymaker.

Leaps of faith

Lindstrom’s success record in shaping the fortunes of companies with his marshalling of Small Data wisdom speaks for itself. And yet, there is a pop-psychological tone to his cross-cultural observations and sweeping generalisations about nationalities and people that is occasionally grating.

His case study on consulting in India for an “unnamed” breakfast cereal maker packs in about as many clichés and stereotypes as an in-and-out ‘parachute artist’ can summon up: Bollywood, cows on streets, saas-bahu dynamics (in which context he cites my colleague Veena Venugopal’s book The Mother-in-Law), the head-bobbing Indian…

And in the end, while his prescription for the redesign of the packaging for the cereal may have worked commercially, the case he lays out for how he arrived at it is far from persuasive.

Lindstrom’s observations about other geographies and cultures require even more spectacular leaps of faith. For instance, he writes: “Generally speaking, when toothbrushes stand in a holder, or a cup, or jar, their owners tend to be less sexually active than not. If and when their owners are romantic, their sex lives tend to be highly structured and less hospitable to spontaneity or innovation.”

And elsewhere, he notes, with a puzzling fetish for dental hygiene observations: “Consumers who discard a toothpaste tube with its cap screwed down tightly seldom allow themselves to relax, and are reluctant to expose who they really are, or to indulge themselves with a luxury.” Elsewhere, he claims with a straight face that Americans have a conflict-aversion instinct that causes them to prefer round cakes to square ones!

Even if Lindstrom makes no claims to being a social scientist, such sweeping generalisations and pop-psychological observations leave one gobsmacked. These irritants aside, Lindstrom tells a masterly tale, connecting the dots between the grassroots-level behavioural dynamics of countless ordinary folks and the business fortunes of companies and brands that grow on their patronage. The problem with Big Data, he establishes, is that it doesn’t adequately capture the “emotions” associated with brands.

That ‘metric’ can be serviced only by fusing Big Data analysis with Small Data anecdotal insights of the sorts that only brand consultants like him can provide. That hypothesis may be self-serving for Lindstrom, but he is such a delightful raconteur and a keen ‘outside’ observer of cultural idiosyncrasies that it’s easy to be swayed by his sales pitch.

(Martin Lindstrom is a brand building expert. He is the author of six groundbreaking books on branding, including Buyology: The Truth and Lies About Why We Buy, BRANDsense and Brandwashed.)

(The article was first published in BusinessLine.)

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