Data are useful. But don\u2019t let them deceive you.<\/p>\n\n\n\n
I was thinking about data-driven approaches while having a\nconversation with Greg Sherwood on Thursday, when I popped into Handford Wines.\nThis shop has an amazing selection of wines. So many really interesting bottles.\nSometimes it even seems like too many. If you got the accountants in, they\nmight suggest streamlining the business, focusing on the wines that sell best, and\njettisoning some harder-to-sell lines, reducing the amount of capital tied up\nin the business.<\/p>\n\n\n\n
Or think of a major agency business, importing scores of\nproducers into the UK. As well as some gems \u2013 real blue chip wineries \u2013 they\nrepresent lots of smaller, somewhat niche estates. The bean counters might like\nto strip this business back to just the most profitable wineries, and then run\na leaner, more profitable business: the data show that most of the profit is\ngenerated by, say, a quarter of the portfolio, so it makes sense to let the\nrest go. <\/p>\n\n\n\n
Or let\u2019s talk media. These days it\u2019s possible to track\nreader behaviour. I know the sorts of articles and Instagram posts that will get\nme the most views and interaction. Any consultant would tell me to focus on\nthese, and do less of the geeky, niche stuff. <\/p>\n\n\n\n
But in all three cases, the data lead the businesses into danger.\nFor Handford, stripping back the range would erode consumer trust. People shop\nthere, I suspect, because they have such a broad range of interesting bottles,\nspanning a range of styles \u2013 first growths to Ganevat. The diversity engenders\ntrust, and even the bottles that don\u2019t sell well could be playing a role in\nthat range.<\/p>\n\n\n\n
Take a successful agency business and cut out the more niche\nproducers, and you will see that even if people weren\u2019t buying a lot of these\nwines, their presence in the portfolio likely served a purpose. Would the new business\nbe leaner and more efficient? Perhaps. But it might also lose customers for\nwhom the breadth of the portfolio mattered, even if they weren\u2019t buying a lot\nof the fringe wines.<\/p>\n\n\n\n
And as for media, it\u2019s a similar story. If I focused more on what gets the big viewer numbers, would my work be better? It would be less interesting and less authentic, and it would quickly resemble other media outlets all focusing on the middle of the normal distribution, rather than working the tails. Data can drive people into the same competitive space. Diversity suffers. <\/p>\n\n\n\n
[Picture: time for reflection, Vancouver Island]<\/p>\n\n\n\n