From Analytics to Crealytics: Why big data analysis needs to transform from business intelligence to a source of imagination?

Prof. Dr. Ernst Verwaal EnANPAD 2015 Divisão Marketing 14 Setembro 2015, 10.30AM Sala Ibituruna

Imagination is more important than knowledge, because knowledge is limited, whereas imagination embraces the entire world….. Albert Einstein

Zaga Zoe! is a company that adapts products to new trends for kids. The product developers needs to design new products more than one year before they are introduced to the market http://www.zagazoe.be/fr

Critique: Analytical systems can pose barriers to intuition and creativity (Lens en Lyles, 1985; Mintzberg en Westley, 2001). 1) Analytics lead to “paralysis by analysis”. Furthermore the value of data and analysis is context specific which is only available in informal logic and intuition rather than a standardised set of rules (Verwaal, Commandeur en Verbeke, 2009). Informal logic and intuition are more difficult to immitate and therefore a better sources of competitive advantage (Sawka, Francis en Haring, 1996). 2) Analytics leads to “erosion by standardisation” 3) Analytics without proper intuitive imagination may lead to underusage of data or even false marketing prescriptions (Verwaal and Cavalho, 2015)

Analyses and observation is only possible if it is based on an intuitive conceptualisation of reality (Kant, 1781)

•  Immanuel Kant (1781) demonstrated in the 'Kritik der reinen Vernunft’, that intuitive experience of reality is only possible based on self-developed concepts of reality. This idea is confirmed by modern neuropsychology (Wind, Crook en Gunther, 2005).

•  Analysis of big data should give ample opportunity to use that intuitive experience!

Bounded creativity concept •  Companies need to unleash their creative potential by

allowing for untuitive and creative form of dataanalyses.

•  Fung, Fung, en Wind (2008) show in their research that emotion is an important part of the analytical process but often underestimated because it conflicts with the rules of logic, however, it is also the main source of reconceptualisation and renewal of existing business models.

Zaga Zoe! Is not alone .. There is an increasing gap between data available and data used (Day, 2009)

We only select woman with a very strong intuition for the market. We don’t use analytics reports as they only would disturb the intuitive qualities of our talented women. CEO Zaga Zoe!

Classifcation of customers

•  New data available from big data bases do not fit well with current classifications such as the average customer or standard market segments and preconceived customer profiles.

•  By reduction of customers into anonymous averages the true value of the data for marketing programme development is lost.

Unique customer data •  Big data are often available at the level of unique individual

customers and can be accesed from: o  Online sources o  Customer loyalty programmes o  Point-of-sales data o  Internal and external data of individual customers

o  The biggest part of these data are lost if they are combined into averages and classified acording to existing dominant business models.

Case example Zaga Zoe Mail campagne Conversie Non-conversion Total Succes percentage

A 21100 900 22000 95,9% B 6770 230 7000 96,7%

Totaal 27870 1130 29000

Mail campagne Conversie Non-conversion Total Succes percentage A 6850 150 7000 97,9% B 5840 160 6000 97,3%

Totaal 12690 310 13000

Aggregate Nielsen data

Data for kids only

Mail campagne Conversie Non-conversion Totaal Succes percentage A 14250 750 15000 95,0% B 930 70 1000 93,0%

Totaal 15180 820 16000

Data for adults only

Most analysts don’t believe that this is mathematically possible as they assume proportional weighting of subgroup effects!

Compare aggregated and non aggregated data

Aggregated data Non aggregated data

21100

=

14250

X

15000

+

6850

X

7000

22000 15000

22000 7000 22000

Aggregated data Non aggregated data

6770

=

930

X

1000

+

5840

X

6000

7000 1000 7000 6000 7000

For kids

For adults

Campaign A creates a bigger number of conversions for kids (68%), That is why the overall score (95,9%) in the aggregated table is more influenced by the lower volume for adults.

Yule-Simpson effect for Zaga Zoe!

Children

Adults

New model for Crealitics •  Crealytics model: Imagination as input for data analyses

•  Imagination is more important than knowledge, because the creation of new, deeper and valuable knowledge is not possible without imagination.

•  Ernst Verwaal

Obrigado pela sua atenção!