Martin Lindstrom: ‘Ditch big data and spot new opportunities’

Martin Lindstrom on why business should ditch big data and spot new opportunities

Leaders should trade tech tools for traditional human observation to discover new business streams, according to brand guru and Time magazine ‘100 Most Influential People’ honoree, Martin Lindstrom

Back in 2002, Lego was in deep trouble. “It was perhaps half a year from bankruptcy,” explains branding expert Martin Lindstrom, who was called in to help reverse the decline. “So, relying on big data, they decided that the instant gratification generation had arrived, and dumbed-down toys, changing the size of the bricks from tiny to gigantic.” Lego sales plummeted considerably further in 2003.

A eureka moment for how to turn things around came when Lindstrom visited an 11-year-old, deemed a typical Lego customer, in Germany. Asked what his prize possession was, the boy proudly produced a battered old pair of Adidas trainers. “The sneaker proved that he was the best skater in town,” says Lindstrom. “Lego realised from this that if children have passion, they’ll spend thousands of hours on something. That led to a return to larger, more complex Lego kits with smaller bricks.” Lego’s seemingly unstoppable growth (27 per cent in the first six months of last year) tells the rest of the story.

Lindstrom refers to himself as “an ambassador of the consumer” and a “neuro-marketing consultant”. In his capacity as CEO and chairman of the Lindstrom company, he spends over 300 days each year travelling (“I’ve visited and stayed in more than 2,000 consumer homes in 77 countries over the last 10 years”). He thinks nothing of travelling from a Brazilian favela to the refined milieu of European royalty overnight, in pursuit of new clues about how the world’s consumers tick. As well as the Lego coup, other game-changing observations made during these travels, and detailed in his seventh book – Small Data: The tiny clues that uncover huge trends – include the ergonomic layout of a car dashboard informing the redesign of the iRobot Roomba vacuum cleaner, and the low positioning of fridge magnets in Siberia, a sign that children there lacked play objects, ultimately leading to the establishment of Russia’s first major toy chain.

He’s also a reality TV star – in NBC’s Main Street Makeover, Lindstrom attempts to turn small businesses’ fortunes around in 24 hours, using techniques honed proffering future-proofing wisdom to Fortune 100 brands including McDonald’s Corporation, Nestlé, and Microsoft – and was named one of Time magazine’s ‘100 Most Influential People in the World’ in 2009. And, in Lindstrom’s extensive experience, modern business leaders are missing a very simple trick. “You and I every day leave a trail of what I call emotional DNA behind us,” he says.

“There are some fascinating, observable correlations – for example, between how you decorate your home and who you are as a person. The size of paintings in a home – if they’re large and colourful, that has a direct correlation to your level of self-esteem. Your bathroom, how you place your shoes, how you sit – all of this reveals a fascinating story, one that cannot be communicated verbally or via any amount of big data.”

Big data, for Lindstrom, is a huge part of the problem – hence the title of his book which, far from being about a new techie fad, actually calls for readers to turn away from data analysis and return to basic human instinct and observation. “People are becoming incredibly obsessed with it, and this obsession makes us fundamentally believe we can sit behind our computer screens and gather an enormous amount of insight about consumers without having to leave the office. Nothing could be further from the truth – the best research you can ever conduct is in person.

“Small data – picking up those subconscious clues in people’s homes and lives – is dirt cheap, and yet it’s in my opinion one of the most powerful tools for start-ups. If they can find a way of picking up all these insights, they can have insight into the consumer and what they have to change to make their brand powerful. Branding is all about an emotional connection between a product or service and a consumer, so if you don’t understand who you’re dealing with how can you make that connection?” Does he feel that business leaders are, by and large, oblivious to these invaluable clues into consumer tendencies?

“Absolutely. I did a talk in New York City the other day for 6,000 business people, and asked the audience how many had spent time in a consumer’s home – someone they didn’t know – over the last year. Just two raised their hands. That’s the state of the business world right now. People are too busy sitting in meetings, handling politics and digesting data that’s come through a cable and so on.”

Lindstrom’s own strategy involves a measured, time-consuming step-by-step process of data gathering, dot-joining and evaluation. “The first thing I do in a new place is go and get a haircut,” he says. “Talking to the local hairdresser will give you a point of view of the community and the state it is in, which is a foundation for further exploration.” But what can time-poor business leaders do to harness at least some of the benefit of Lindstrom’s approach? “I recommend clients spend at least two days a year in random consumers’ homes, relevant to the audience you’re trying to appeal to,” he says. Is two days enough? “When I went for a health check in Switzerland the other day, they didn’t take six litres of blood from me – they took a couple of drops. They’ll be the most valuable days you ever invest in. You’re also sending a very clear message to your organisation that you care about consumers.”

Social visits to friends don’t count: “It’s important to have an arm’s-length distance from the people you visit; cocktail parties are staged scenes – and it’s essential to be in-the-moment in order to absorb potential clues: “You have to be present and mindful,” he says, “which is why I never use a mobile phone.” So while it might be a bit hasty to ditch big data from the agenda just yet, if you can also learn to absorb clues at the rapid-fire rate of a certain fictional sleuth in a mega-popular TV series, well, you just might strike commercial gold.

Martin Lindstrom CV

1970 Born in Denmark

2000 The first of his books, Brand Building on the Internet, is published. Six more would follow, including Buyology: Truth and lies about why we buy (2008) and Brandwashed: Tricks companies use to manipulate our minds and Persuade Us to Buy (2011)

2009 Martin Lindstrom listed as one of Time magazine’s “World’s 100 Most Influential People”

2011 Appears in the Morgan Spurlock movie The Greatest Movie Ever Sold, as well as reality show America’s Next Top Model

2015 Martin Lindstrom is ranked in 18th place among the world’s most influential management gurus by Thinkers50

Watch an interview with Martin Lindstrom here



About author

Nick Scott

Nick Scott

A former editor-in-chief of The Rake and deputy editor of the Australian edition of GQ, Nick has had features published in titles including Esquire, The Guardian, Observer Sport Monthly and Rolling Stone Australia and is a contributing editor to Director magazine. He has interviewed celebrities including Hugh Jackman, Daniel Craig and Elle Macpherson, as well as business people including Sir Richard Branson, Charles Middleton and Nick Giles and Michael Hayman MBE.

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