4 Steps to Harness the Positive Impact of Big Data

The concept of “Big Data” has been a hot topic within financial services for the past few years. Doing a quick Google search for the topic “big data financial services” brings up over 7.5 million hits! Common thinking is that the more data you have on your clients the better you can build relationships with them and provide the highest levels of client service. More recent articles take the notion of big data one giant leap further, coupling increased client data with artificial intelligence will put your business at the forefront of where the industry is headed in the future.

Wrong!

Big Data is a marketing tool and marketing tools can often take on the aura of a “silver bullet” or “magic beans.” Knowing a client’s college alma mater, the ages of their children, or the names of their pets does not mean anything by itself. Without a strong emotional connection, where your client feels that you have his best interest in mind at all times, these data points are nothing more than information masquerading as important knowledge.

Too often we hear that capturing detailed personal information along with dozens of other pieces of data on your clients is vital to creating long-lasting relationships.

If simply gathering as much personal data as possible were enough to create unassailable relationships, we would all feel forever attached to our CPAs and insurance agents. Quick show of hands, how many of you feel a deep emotional connection to your CPA or insurance agent? Not many. Yet, those two individuals have a ton of key information about you and your family – occupation, income, ages, birthdates, investments, business interests, the list goes on quite a while. Big data is not the answer to better client relationships, more AUM, and greater revenues – big data is not “magic beans.”

Making “Big Data” a core initiative of your business stands a much greater chance to destroy rather than enhance client relationships. Why? Because client relationships are not built on data points or your ability to send them an article that an A.I. engine tells you would be perfect for them. The best client relationships are built on developing deep emotional connections with your clients.

Now, I’m not saying ignore collecting data and information on your clients.

By all means, more information is better than less. Yes, it can help you target resources, services, and useful information to your clients. What I am saying is that collecting this data – Big Data – is NOT the critical component to client relationships and focusing too much time and attention on it, especially at the expense of emotion-based relationship building, can be detrimental to your business.

Related: Everybody's in Sales: How to Create a Sales Culture in Your Firm

Here are 4 steps to help you harness the potential positive impact of Big Data while maintaining proper focus on building and nurturing strong emotion-based client relationships:

Make emotion-based discovery and engagement the base of all client relationships. Engage your clients by identifying the top items in their Heart, Mind, and Soul . This discovery will tell you what their most powerful emotional drivers are for decision making.

Know how you plan to incorporate client data in your business – new services, targeted messaging, client networks. Don't ask a client for anything that will not have a usefulness to how you will deliver service and information to them today or in the near future. Eventually clients will start to wonder what you are doing with all them information you are asking them about.

Develop a structured process to capture, archive, and access the data points you are gathering on your clients. If you can't input the data you are capturing into your CRM system in a way that it can be easily accessed, sorted, and retrieved then don't bother gathering the data. Trying to keep this amount of information in random files, notebooks, or other methods only creates unnecessary noise and chaos.

Never forget that client data, without strong emotion-based engagement, is just information masquerading as important knowledge.