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The biggest challenge researchers in Autonomous driving say they have, is blending them into a world where humans don’t behave rationally.
In a world preoccupied with big data where everything can be judged instantly many people have come to believe interacting with customers is not necessary anymore.
This is the paradox of online behaviour: we are rarely acting rationally when acting online. Especially when we communicate anonymously we can be anyone we want. And even when we do have an avatar or name people can recognize, we still present a version of ourselves we want to be at that moment.
Despite the almost 3 billion people online generating 90% of all the world’s data over the last two years, Google still hasn’t figured out a way to understand people’s motivations. Sure, robots can show unusual correlations and even tell how people feel, just by analyzing the way they type. But big-tech companies still cannot predict a single motivation about what drives us. Today big corporations are going back to do what smart marketers have been doing for centuries: talk to people and observe them, to truly understand why they do what they do.
quoteBig-tech still hasn’t figured out a way to understand people’s motivations.
When LEGO saw a negative spiral unfold in 2013, they looked into their data to find a solution. What they found out was that revenue was declining on all fronts. It wasn’t a single point of failure, all of its products and business units were losing. Market research confirmed that the kids to which LEGO had been selling successfully for years, moved their interest online more and more. The research concluded that the decline of attention and the need for instant gratification required simpler sets and bigger bricks. Just as management was putting a new strategy in place, doubling down on the parts where LEGO seemed to do right (at the time the simpler sets with bigger bricks seemed to still be doing well), it made a radical move. It went out to interview a bunch of kids.
At the same time, most marketing-driven organisations have lost their way. Where personalisation was one of the digital age’s big promises, almost no business has consistently been able to market products truly personal. Most personalisation efforts focus on grouping people together based on a set of actions, then bombarding them with messages, and the ones that stick end up in boardroom presentations to show the quality results. This survivorship bias is now getting debunked as real results (like revenue) don’t seem to show the same picture.
Big data is on its way down as it doesn’t tell the whole story and probably never will.
When talking to these kids, one boy, in particular, stood out and as it turned out was an embodiment of the ideal LEGO persona he was part of. When the researchers were in the boy’s room talking about the things he liked, there was one thing that stood out. He displayed his shoes very prominently. The shoes however were old and scratched. When the researchers asked about it the boy answered with great pride his shoes were like a trophy. The proof that he was the best skateboarder in town. The marks on the sides of his shoes showed his dedication to skateboarding.
quoteThe process was the gratification.
They were his way of saying he put in the time, the blood, the sweat, and the tears to be the best. After talking to other kids LEGO soon discovered that while most of them did spend more time online, they never lost interest in mastering a skill, putting in the time to pull off something great or simply put: they didn’t need instant gratification at all: the process was the gratification.
We like to have more information mostly because it comforts us in making the right decisions. If it turns out we are wrong, we at least can trace it back to a data set that we all agreed was showing the right insight. While that might keep us from losing our jobs, our customers still don’t buy more in spite of the mistakes. Instead, it’s time to involve them in the mix.
Big data can reveal patterns no human brain can possibly generate on its own, but it can only reveal a pattern. The next step is to figure out why the patterns are there in the first place and that’s where people outperform algorithms 100% of the time.
When LEGO understood the core human insight behind the data, instead of making their sets simpler with bigger bricks, they did the opposite of what any marketer would have advised: They made the bricks smaller, introduced more technical depth which required more focus and skill, and made complex and big sets. Within a year, sales were through the roof and the company had been thriving ever since.
The truth for most businesses that rely only on the patterns their algorithms reveal, is that they are missing the tiny clues that can produce breakthrough results.
The next time you are in need of answers, conducting market research can get you this far, but instead of spending €50k on pattern recognition, try spending 5 hours interviewing a couple of people you consider your customers. You will be amazed by what they have to tell you.