20The Power of Experts
One of my career highlights was a predictive analytics project I worked on in partnership with the big data analytics firm MAX451.19
Not that long ago, a company would put out the same offer to all of its customers. For example, PetSmart would email their entire database an offer for 25% off dog food. The problem is that some of their customers had cats, fish, or frogs. Cat people considered the offer irrelevant and opted out from further messages. They might even get irritated with the company: “You know I have a cat; why do you keep sending me dog offers?”
Over time, companies got smarter and began segmenting customers. I'm guessing “pet_type” is a field in PetSmart's customer database, and now only dog people get dog offers. This is a good start, but it falls apart for big-ticket items. Once you decide to make a large purchase, like a new laptop, your social media and inbox will magically begin filling up with laptop offers. Are they listening in on your conversations, or reading your mind? That's a topic for another time, but you're searching, and they know it.
You do your research, make your decision, and buy that laptop. What happens next? You continue to get laptop offers for months after the purchase. Unlike dog food, you only buy a computer once every few years, so the ads are ineffective. The company needs to know what you will buy next.
At Pier 1 Imports, when a customer bought a dining table, we didn't want to continue pushing dining tables ...
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