It’s All About The Data…Or Is It?

Until last November, my entire career was in the insurance industry. The industry has been slower to change than many others. This is due in large part to legacy mainframe systems, state regulations, and no sense of urgency. However, over the last five years the pace of change has accelerated. The reason; new competitors threatening to disrupt the status quo.

Big data is one factor that’s making a huge impact. In the past, insurance companies were limited on the data they could capture and mine from their old mainframes. Whether it’s insurance or any other industry, the more data a company has, the better it can do when it comes to predicting customer behavior.

That could lead you to think it’s all about the data. Or is it?

Less is More

Generally, more data is better…at least to a point. Research shows, given too many options people end up making fewer choices. This was born out in a well-known study conducted by Sheena Iyengar and Mark Lepper using jam displays in a store.

People entered the store and either saw a selection of two dozen types of jam or six choices. People were attracted to the larger selection, with approximately 60% of shoppers stopping to peruse the table with 24 choices. But, only 3% of those shoppers bought a jar of jam.

Far fewer people, only 40%, stopped by the table with six jams. However, 30% of those people bought a jar. If you do the math, the table with only half a dozen choices sold nearly seven times more!

On the surface this seems counter-intuitive. But, it makes sense when you realize the struggle humans have with discriminating between items when all the choices appear relatively similar. The same thought process applies when too much data is presented for consideration; it can cause analysis paralysis.

Not The Whole Story

Data is limited in that it’s only as good as what can be collected and it rarely tells the who story. Have you ever used a dating app? I know many people who have. Rarely is it the person who seems to be a perfect match on paper who ends up being the love of their life.

Having lots of data is good but just like a dating app has its limits. The data points are like still images taken from a video. You may get a strong sense of what’s going on by looking at the right pictures but you might also jump to the wrong conclusion if important pictures are missing.

What’s Your Message?

Perhaps most important is what you do with the data you have. At some point communication has to happen between people. It may come via a website, an email, a phone call or face-to-face. Good data will be worthless if the person using it doesn’t know how to communicate.

For example; if there’s a problem – people not voting, kids cheating, citizens not paying taxes – you will hurt your chances of changing that behavior by normalizing it with big numbers.

Normalizing it might go like this; it’s terrible that more than 60% of college students cheat (I made that up). If you understand the principle of consensus, people are more inclined to follow the lead of similar others, then you know the statement above may encourage more students to cheat! “Hey, if more than half of the kids are cheating I might as well too,” goes the thought for some students.

I’ve also seen companies use verbiage on collection notices and cease and desist letters that do nothing to help them achieve their goal. Often it makes the person who receives the intimidating communication dig their heels in more! Humans are funny that way. It’s not uncommon for people to forego what’s best for them in order to teach the other person or organization a lesson if they feel they’ve been treated unfairly.

To Do This Week

Think about all the data you encounter and attempt to use to move your organization forward. How can you maximize the effectiveness of that data? At some point you’ll use data when interacting with other people. This is where the rubber meets the road; getting or not getting what you want. Consider the following:

1. Less is more. Don’t overwhelm people with charts, graphs and numbers. Think about the data that will help reach your objectives and discard what’s not essential.
2. Account for limitations. Data is good but it’s not the answer, only a tool to help you get answers. Think of it like a map; it’s helpful but it’s not the actual terrain. What might be missing that could help make a better decision?
3. Manage your message. Don’t share big numbers to impress. Consider the psychology it will trigger in those who encounter it. Will it move people in the direction you want? If not, rethink what you’re going to share and how you plan to share it.

Brian Ahearn, CMCT®, is the Chief Influence Officer at Influence PEOPLE, LLC. An author, international speaker, coach and consultant, he’s one of only 20 people in the world personally trained by Robert Cialdini, Ph.D., the most cited living social psychologist on the planet when it comes to the science of ethical influence.

Brian’s first book – Influence PEOPLE: Powerful Everyday Opportunities to Persuade that are Lasting and Ethical – has been one of the top 10 selling Amazon books in several insurance categories and cracked the top 50 in sales & selling.

Brian’s LinkedIn Learning courses have been viewed by nearly 85,000 people around the world! His newest course – Advanced Persuasive Selling: Persuading Different Personalities – is now available through LinkedIn Learning.