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3 Reasons Why “Big Data” Isn’t Really All THAT Big


Quality Payday Leads

Over the last couple of years, Big Data has been unavoidable. It’s not just big, it’s massive. If you throw a stone down the streets of London or New York, you’ve got as much a chance of hitting a big data guru as you do a social media guru.

Undoubtedly, there is great power in data, but is Big Data all it’s cracked up to be?

50% of my brain thinks Big Data is great, and 50% of me thinks it’s a neologism. I’ve found it difficult to reconcile all of the varying information out there about it.

So join me for the first part of a two-part series looking at Big Data. In part one, I’ll look at Three reasons why Big Data is a big load of baloney. And next week in part two, I’ll look at Three reasons why Big Data is awesome.

1. Big trends are trendy

My pet rock still hasn’t moved, and my Tickle-Me-Elmo still won’t shut up. And also, Big Data is big, at least according to Google Trends:

Targeted Data
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Some other terms once synonymous with the inter-web were pretty trendy too. Remember this one?

Auto Finance Leads
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The adoption curve of the term “web 2.0” looks quite similar to where we are now with Big Data. And yet, if you still use the term “web 2.0” in your job, then you probably think the Fresh Prince still lives in West Philadelphia. (He doesn’t.)

The thing about Big Data is that it really isn’t anything new. Cluster analyses, propensity modelling, neural networks and the like have been in use in the marketing sphere for quite some time.

The phrase used a few years ago for this sort of stuff was ‘business intelligence’

STUDENT LOAN DEFAULT LEADS
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But now, we don’t care about business intelligence anymore. Who needs intelligence? It’s over-rated. Like Goethe said, “All intelligent thoughts have already been thought”.

And yet, Big Data is everywhere. Why shouldn’t it be? It’s BIG. However, you ask 10 people what Big Data means, you’ll get 10 answers, none of which make much sense.

Maybe it’s because of this:

EDU LEADS
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We’ve all seen Moneyball and read Nate Silver’s blog. There are people out there who are better at statistics than you. And this is scary.

So what’s the solution? Throw a bunch of money at Big Data, whatever it is, and sleep soundly knowing that you’ve gainfully employed a math graduate.

And therefore, Big Data is a big load of baloney.

2. Missing one V

Gartner defines Big Data as requiring Three V’s: Volume, Velocity, and Variety. So let’s look at this a bit deeper.

Volume of data: for sure, there’s loads of data out there. Huge amounts. Check.

Velocity of data: yep, data is moved around in large quantities faster than ever before. Check.

Variety of data: in most digital marketing ecosystems, there are the following types of data (yes, I know there are more, but for the sake of argument bear with me):

  • Site stats.
  • Email engagement stats.
  • Mobile/SMS stats.
  • Past purchases.
  • Demographics, preferences etc.

And within each of these, the options are finite. For example, in email, most people measure (at the very least) opens, clicks and conversions. That’s three types of data.

And for all of the other areas above it’s the same. For the sake of argument, let’s say that we’ve got 30 types of data in total.

This is the thing. 30 types of structured data. Processing this data doesn’t require a super-computer, it simply requires robust statistical methodology.

So, if you’re a digital marketer, what you actually have is ‘a few sets of structured, small data’, not ‘Big Data’.

And therefore, Big Data is a big load of baloney.

3. You can perfectly predict the past

With the beginning of the National Hockey League’s 2013-14 season fast approaching, I’ve been spending a lot of time lately trying to determine the best bets to place on the eventual winner.

And of course, it seems Big Data is the best route to my next million dollars. (Btw if anyone is interested in joining my hockey pool then drop me a line – go-live is 1st October!)

I downloaded as many team statistics as I could from last season and embedded them into a spreadsheet. It included rudimentary statistics such as Goals For and Goals Against, right through to Winning % when trailing after two periods, CORSI 5v5, and defensive zone exit rate.

Then I ran a multiple regression and removed non-causal variables. I perfected the model such that the formula spat out expected point totals that were on average within 0.5 points of the actual result.

When I plugged in the raw data from the previous season, the outputted expected results weren’t even close to the actual results.

This is a perfect case of what is called ‘over-fitting’.

When you have a lot of data, the urge is to use all of it and create an uber-complex, bullet-proof formula. Take all of your data points and find the trendline that touches everything. But there’s an inherent problem with this – all you’ve done is create a formula to perfectly predict the past.

The risks that come with an over-fitted model are twofold:

  1. You are assuming that the future will      be the same as the past.
  2. Adding or removing variables becomes      extremely difficult and risky.

So despite there being lots of data out there, the dominant strategy is to focus on the causal variables. In the hockey allegory above, while I won’t reveal my secrets, two of the stronger predictors of eventual success are goal differential and shot differential.

Not rocket science, I know – if you take more shots than your opponents you’ll generally score more goals than your opponents. However, I did learn to remove strictly correlative variables (such as Faceoff Win %, PDO and punches thrown).

Instead of focusing on Big Data and its billions of variables, I’m instead focusing on a small amount of variables that actually matter.

Within your organisation, what are your causal variables? By looking at all the Big Data available to you, you run the risk of the truly valuable signals being obfuscated by irrelevant correlates.

And therefore, Big Data is a big load of baloney.

Disagree?

I do too. Well, 50% of me does. Feel free to elaborate on your point of view in the comments section below.

Parry Malm is Account Director at Adestra and a guest blogger on Econsultancy. Connect with him on LinkedIn or Google+.

Topics:Data & Analytics

by caesararum

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What Goes Around Comes Around – Taking Care of a “Problem Client”


By Ron Burley | Inc

 

Several years ago, a single problem customer changed the fate of my company. Here’s the story.

In business, we’re often all about the numbers–occasionally to a fault. I’m not saying statistics and metrics aren’t useful tools. Sometimes, however, the success or failure of an enterprise comes down to individual interaction–say, a handshake or a phone call.

Let me give you a good example.

In 1995, I bootstrapped a tech company, Broadcast Software. We created digital audio and automation software for broadcast radio stations. After four years, we had 16 employees and customers in 40 countries.

But we were at a transition point. If companies need to grow or die, we were in need of a transfusion. We had grown beyond my ability to fund future growth out of my back pocket, and it was time to get outside capital. It also turned out to be time for the tech bubble to burst. Our potential funding sources instantly disappeared.

I was a hands-on CEO. I had written the original code and knew many of our customers personally. I had told my employees that the buck stopped with me, that I’d be willing to speak with any customer they couldn’t help or satisfy. If need be, they should even give out my personal number.

Challenging Customer

So when my cell phone vibrated at 2 a.m. on a Sunday morning, I recognized the 618 area as Southern Illinois. That meant the caller was Bob, a crusty old-time radio engineer and owner of a very small rural radio station near Mt. Vernon. He’d purchased one of our systems several months before and had been struggling to get it up and running.

Bob’s biggest problem was that he’d never even used a computer before. My support manager more than once had recommended that we just refund Bob’s money. But we’d marketed our products as easy to use, so we couldn’t abandon someone because they’d found otherwise.

I climbed out of bed, closed the door behind me, and spent the next two hours coaching Bob on how to configure the start-up options for Microsoft Windows. It wasn’t an issue with our software, but it was a problem for our customer, Bob–which made it our problem. At the end of the conversation, I thought we’d made a lot of progress. Bob was enthusiastic. I was hopeful.

That was the last anyone heard from Bob. He didn’t call tech support. He didn’t call me. As time passed, I wondered whether we’d actually fixed the problem or whether he’d just given up. I made a mental note to check in on him as soon as I’d figured out the bigger financial issues.

Surprise Windfall

One situation was about to solve the other. Almost six months to the day after I’d hung up the phone with Bob, I received another call. The chief of engineering of a major media company informed me the company had decided to standardize on our software across its entire chain of more than 300 radio stations. It would be the biggest order in our history–more than $4 million–and would easily provide the capital we’d been needing.

The call was a complete surprise. We’d not pursued their business. In fact, it had been public knowledge that they were selecting one of our competitors. As it turned out, the reason for their mid-course change was … Bob.

That phone call with Bob saved our company. He hadn’t given up on us; he loved us. Shortly after my call with him, the same media giant made an offer he couldn’t refuse to purchase his radio station, and Bob had stayed on as a consulting engineer.

An Internal Champion

Not long after, a company meeting centered on their intentions to purchase our competitors’ products. Bob had raised his hand at the back of the room: “Have you ever heard of Broadcast Software?” he asked. He told his new colleagues the story of our phone call, and how we’d stuck with him for months even when the problems weren’t really ours. Over lunch, and then dinner, Bob sang our praises. At the end of the evening, he scribbled our website and contact info on cocktail napkin and handed it to the chief of engineering. “Check these guys out,” he said. “They’re great.”

They did, and the rest was history. Our history.

There’s a moral to the story: Every customer needs to be treated with respect, and no customer should be left dissatisfied. I’m not saying that every customer call is crucially important. But some of them certainly are–and you never know which one might be your “Bob.”

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“The harder I work, the luckier I get.”
Samuel Goldwyn

Hard Work Wont Get You Ahead


Late last week, I had several different challenging projects on my plate, each with fast-approaching deadlines. Feeling the pressure, I awoke earlier than usual in the morning and got to my desk by 7:00 am.

Four hours later, I was still sitting there, barely having budged from my chair. To my surprise and frustration, I still hadn’t finished my project.

At first, I attributed my failure to the difficulty of the task. But the more I thought about it, the less that made sense.

A Faulty Instinct to Work Harder
Suddenly, it dawned on me. Anxious about all the demands on my plate, I’d defaulted into a way of working that doesn’t work.

I hunkered down, powered through, stayed the course. Along the way, something insidious, inevitable, and mostly unconscious happened.

I started reading emails, and responding to them. I remembered little things from my to-do list, and decided they were actually quite urgent. I made some phone calls. I rewrote my to-do list. Feel familiar?

This isn’t the sort of thing that should happen to me. I run a company called The Energy Project, and we’re in the business of energizing individuals and organizations to be more productive and higher performing by learning to balance work with strategic periods of renewal.

Alas, I’m also human. I violated the very lessons we teach.

Professionals live today in a world of relentless demand. To meet their obligations, their default instinct – including mine, if the pressure gets high enough – is simply to push harder.

The problem is human beings aren’t meant to operate the way computers do: at high speeds, continuously, for long periods of time. To the contrary, people perform best when they pulse rhythmically between spending and renewing energy – not just physically, but also mentally and emotionally.

Unfortunately, rest and renewal get no respect in the organizational world. Most managers view the need for downtime as weakness. The problem is that when their employees work without pause, they very quickly get decreasing incremental returns on each hour invested.

Just as I did, you stop thinking as clearly, creatively, and strategically, and you take more time to get less accomplished.

Though you may not realize it, you’re physiologically designed to operate in cycles of approximately 90 minutes, during which you move from higher to lower alertness. These phases are called “ultradian rhythms.”

Don’t Ignore Your Body’s Signals
When you need a break, your body sends you clear signals, including fidgetiness, hunger, drowsiness and loss of focus. But if you’re like most people, you override them. Instead, you find artificial ways to pump up your energy: caffeine, foods high in sugar and simple carbohydrates, and your body’s own stress hormones – adrenalin, noradrenalin and cortisol.

Relying on these hormones for energy prompts the state we all know as “fight or flight.” It’s great for escaping danger, and terrible for performance. In fight or flight, people become less capable of thinking clearly and reflectively, more emotionally volatile, and burn down their energy at a rapid rate.

The Value of Working in Spurts
The counterintuitive secret to great, sustainable performance is to live like a sprinter. In practice, that means working with the high intensity, uninterrupted, for periods no longer than 90 minutes, and then taking a break to renew and refuel.

For the first several books I wrote, I typically sat at my desk for 10 or even 12 hours at a time. There was no way to stay fully engaged the whole time, so I found ways to distract myself along the way. Each of the books took me at least a year to write.

For my most recent book, I wrote without interruption for three 90-minute periods in the morning, and then took a break in between each one. I wrote no more than 4 ½ hours a day, and I finished the book in less than six months.

Obviously, it’s not possible for most people in most companies to work in a series of uninterrupted sprints the way I did. Let me challenge you instead to try a smaller experiment.

For the next week, take on your most challenging task first thing in the morning, for 60 to 90 minutes, uninterrupted. Then take a break. You’ll get an amazing amount done – and feel better the rest of the day.  By Tony Schwartz

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Payday Loans Becoming More Popular With Middle-Income Earners


 

As many middle-income earners struggle financially, payday loans are becoming a more popular source of money. Are they though the best option for a short term loan?

With prices on the rise across many staple household needs, including gas and electricity, petrol and food, many families face falling into debt as they struggle to keep up with their outgoing payments.

And it’s not just low-income families who are struggling, it’s middle-income families too. According to This is Money, around 57% of payday loans provider Instant Loans Direct customers, are people earning between $35,000 and $65,000 above the national average wage.

 

With credit cards maxed out, credit rating unattractive to lenders, payday loans can appear attractive as a short term loan. After all, for what seems a small amount of money you can borrow a few hundred dollars for a few days – that’s what they’re designed for, to get you out of a hole until payday comes.

Few credit checks are made and you can get the money into your bank account very quickly.

The issue is, for this convenient access to money, interest rates are very high, and can be equivalent to over 1,000 per cent.

 

If a loan is not repaid in the agreed time, the charges can be significant and you can easily find yourself with further debt that you have little chance of being able to repay.

The payday loans industry is already worth over $1 billion and growing rapidly as more and more people need quick loans and are either denied access to or are not prepared to approach conventional lenders, such as banks and building societies.

 

MoneyHighStreet comments: “When your salary runs out before the end of the month and yet you still have bills to pay, turning to a short term loan to ‘tide you over’ will be a welcome option for many.

The issue is though unless you address the underlying problem of your outgoings exceeding your income, you will find yourself in the very same position next month. In fact it’s likely to be worse in that you’ve added to your outgoings by the cost of your short term loan.

 

So can you set a budget so that your income exceeds or at least equals your outgoings? Can you save money anywhere?

 

If not, or you can’t totally balance your money, is there another option you can use for a short term loan? For example do you have any assets, such as a car, watch, jewelery or perhaps some art, that you can use to secure a loan?

 

In this way you are making your assets work for you. Of course you still need to pay the cost of the loan but in a worst case scenario you can sell your assets to cover the loan – or rather more positively get your assets back once you have improved your financial position with your better money management and sticking to your budget.

 

Another option may be to turn to family for a loan. Many are seeing this as an easier option and in certain circumstances it can work well.

 

If you are facing mounting debt though that you have no chance of clearing, even if you manage to get a loan for a period, you really need to tackle the route problem sooner rather than later – debt will not go away on its own, you need to take steps to clear it, getting advice from a professional organization.

Five Things to Absolutely Avoid While Negotiating


Every entrepreneur spends some time haggling, whether it is with customers, suppliers, investors, or would-be employees. Most business owners are street smart, and seem to naturally perform well in negotiations. You probably have a trick or two—some magic phrases to say, perhaps—that can help you gain the upper hand. But, often, the moment you get into trouble in a negotiation is when something careless just slips out. If you are new to negotiation, or feel it is an area where you can improve, check out these tips on precisely what not to say.
1. The word “between.” It often feels reasonable—and therefore like progress—to throw out a range. With a customer, that may mean saying “I can do this for between $10,000 and $15,000.” With a potential hire, you could be tempted to say, “You can start between April 1 and April 15.” But that word between tends to be tantamount to a concession, and any shrewd negotiator with whom you deal will swiftly zero-in on the cheaper price or the later deadline. In other words, you will find that by saying the word between you will automatically have conceded ground without extracting anything in return.

2. “I think we’re close.” We’ve all experienced deal fatigue: The moment when you want so badly to complete a deal that you signal to the other side that you are ready to settle on the details and move forward. The problem with arriving at this crossroads, and announcing you’re there, is that you have just indicated that you value simply reaching an agreement over getting what you actually want. And a skilled negotiator on the other side may well use this moment as an opportunity to stall, and thus to negotiate further concessions. Unless you actually face extreme time pressure, you shouldn’t be the party to point out that the clock is loudly ticking in the background. Create a situation in which your counterpart is as eager to finalize the negotiation (or, better yet: more eager!) than you are.

3. “Why don’t you throw out a number?” There are differing schools of thought on this, and many people believe you should never be the first person in a negotiation to quote a price. Let the other side start the bidding, the thinking goes, and they will be forced to show their hands, which will provide you with an advantage. But some research has indicated that the result of a negotiation is often closer to what the first mover proposed than to the number the other party had in mind; the first number uttered in a negotiation (so long as it is not ridiculous) has the effect of “anchoring the conversation.” And one’s role in the negotiation can matter, too. In the book Negotiation, Adam D. Galinsky of Northwesten’s Kellogg School of Management and Roderick I. Swaab of INSEAD in France write: “In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer.”
4. “I’m the final decision maker.” At the beginning of many negotiations, someone will typically ask, “Who are the key stakeholders on your side, and is everyone needed to make the decision in the room?” For most entrepreneurs, the answer, of course, is yes. Who besides you is ever needed to make a decision? Isn’t one of the joys of being an entrepreneur that you get to call the shots? Yet in negotiations, particularly with larger organizations, this can be a trap. You almost always want to establish at the beginning of a negotiation that there is some higher authority with whom you must speak prior to saying yes. In a business owner’s case, that mysterious overlord could be a key investor, a partner, or the members of your advisory board. The point is, while you will almost certainly be making the decision yourself, you do not want the opposing negotiators to know that you are the final decision maker, just in case you get cornered as the conversation develops. Particularly in a high-stakes deal, you will almost certainly benefit from taking an extra 24 hours to think through the terms. For once, be (falsely) humble: pretend like you aren’t the person who makes all of the decisions.
 5. “Fuck you.” The savviest negotiators take nothing personally; they are impervious to criticism and impossible to fluster. And because they seem unmoved by the whole situation and unimpressed with the stakes involved, they have a way of unnerving less-experienced counterparts. This can be an effective weapon when used against entrepreneurs, because entrepreneurs tend to take every aspect of their businesses very personally. Entrepreneurs often style themselves as frank, no-nonsense individuals, and they can at times have thin skin. But whenever you negotiate, remember that it pays to stay calm, to never show that an absurdly low counter-offer or an annoying stalling tactic has upset you. Use your equanimity to unnerve the person who is negotiating with you. And if he or she becomes angry or peeved, don’t take the bait to strike back. Just take heart: You’ve grabbed the emotional advantage in the situation. Now go close that deal.
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By Mike Hofman