It seems like every digital marketer and agency is talking about the power of listening to your consumers in the digital space.  This is fuelled by an entire industry of online listening technology providers that have popped up over the last few years.  They all promise the ability to mine the incredible wealth of information available on blogs and social networks to generate insights about what consumers talk about, what’s on their minds and what language they use to talk about the brand or issues related to the brand.  While the technological possibilities seem limitless I have still only seen a handful of clients use the information to actually improve their communications.  Earlier this week, Emily Steel from the Wall Street Journal wrote about how Ogilvy helped IBM and Harrah’s do this.  

I would just like to spend 2 minutes on the Harrah’s case study for 2 reasons.  First I would like to give the credit for the work to Jim Dravillas and his team.  They have really done tremendously inventive work for Harrah’s over the years.  Sorry Jim – in terms of recognition I realize the doublethink isn’t quite the Wall Street Journal!

The other thing I want to point out is how the Harrah’s example shows that action is more important than listening.  The Harrah’s analysis was surprisingly simple.  While we have used online listening technology in the past, in this case Jim and his team simply read the top 50 tripadvisor.com ratings and categorized the topics they saw using common sense.  My grandmother could have done this (no disrespect to Jim and the team – or my grandmother).  What was brilliant about this case however was that the team came up with clear and simple recommendations upon which they acted by changing the communications.   It’s this last step – taking action – which is always the hardest.  Listening is easy.

I had a similar conversation with my dad about 10 years ago.  He told me that I could have done a lot more with my math degree than waste it on selling “air” as he called it.  He sells steel for a living … .  2 years ago I gave him Ian Ayres’ Supercrunchers for his birthday and last year I gave him Stephen Baker’s the Numerati.  He now thinks I have the coolest job on the planet.  If you are in marketing analytics and always struggle to explain your job to friends and family and make it sound interesting, these 2 books are great.  They give you the perfect data stories for social occasions.  Here are 5 of them for 5 different occasions :

1. You’re in a restaurant : The Bordeaux Equation

A Princeton professor named Orly Ashenfelter created the Bordeaux equation which 0s a  mathematical equation which predicts the quality of a Bordeaux wine year by just looking at winter rainfall and growing season temperatures.  He predicted 1989 was a fantastic Bordeaux year which wasn’t hard – everyone in France would agree with that.  However he caused a lot of consternation among wine connoisseurs when he claimed they had overhyped 1986 which according to his equation was actually one of the worst years of the 80’s.

2. You’re at the movies : Making a Blockbuster

UK company Epagogix uses statistical techniques to analyze movie scripts.  This allows them to predict whether the script will be a commercial success before the 1^st scene is shot.  They also help studios in developing scripts.  They found out that having star actors or a star director is actually not a great predictor of a movie’s success, thereby questioning Hollywood’s business sense of paying them their astronomical wages.

3. You’re at the ball game : Moneyball

Most baseball teams these days use advanced statistics to predict how good a player will perform in the future.  Michael Lewis wrote his book Moneyball about how the Oakland A’s pioneered this.  They found through statistical analysis that the on base percentage and slugging percentage were by far the best predictors of offensive success.  The Mets, Yankees, Padres, Red Sox and many others are now using these techniques.

4. You’re playing poker : The Pain Threshold

Did you know that Harrah’s monitors all gambling transactions that happen in their casinos through their swipe cards real time?  They use statistical models to determine the pain threshold for every gambler.  This is the point at which a person has lost so much that their experience becomes unpleasant.  When high value customers reach this point, Harrah’s will send over a casino worker to invite them for a free meal to ease the pain.

5. You’re on a date : The Algorithm of Love

The online dating industry has been hiring armies of statisticians to optimize the algorithms that match one people together.  Chemistry.com’s algorithm uses a questionnaire to derive your balance of 4 different hormones : estrogen, testosterone, dopamine and serotonin.   Apparently these hormones mold our personality and people look for others who complement them and provide them what they are missing.