Executive Times






2008 Book Reviews



Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart by Ian Ayers








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If, like me, you last took a course in statistics decades ago, you’re likely to be refreshed after reading Ian Ayers’ book, Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart. In a conversation style packed with anecdotes and examples, Ayers explores the ways in which analysts, policy makers and others are mining vast amounts of data to use a fact-based approach to making decisions. Here’s an excerpt, pp. 172-174:


Beware of Super Crunchers Bearing Gifts

Everybody loves a freebie you know, those little gifts that sellers send their best clients. Still, we should be worried if we see a seller treating us better than its other customers. In a world of Super Crunching, sellers' promotions are far from random. When Amazon sends you a nice desk ornament out of the blue, your first reaction should now be "Yikes, I've been paying too much for my books."

When firms Super Crunch on quality, they tend to help consumers. However, when firms Super Crunch on price, hold on to your wallet. The dark side of customer relations management is firms trying to fig­ure out just how much money they can squeeze out of you and still keep your business. In the old days, the firm's lack of pricing sophisti­cation protected us from a lot of these shenanigans.

Nowadays more and more firms are going to be predicting their customers' "pain points." They are becoming more adept at figuring out how much pricing pain individual consumers are willing to en­dure and still come back for more. More and more grocery stores are calculating their customers' pain points. It would be a scandal if we learned that your local Piggly Wiggly was charging customers differ­ent prices for the same jar of peanut butter. However, there is nothing to stop them from setting individualized coupon amounts that they think are the minimum discount to get you to buy. At the checkout aisle, after they have just scanned in all that information about you (including swiping your loyalty card), they can print out tailored coupons with prices just for you. This new predictive art is a weird twist on the Clinton line "I feel your pain." They feel your pain all right; but they experience it as pleasure because the high net price to you is pure profit to them.

In a world of Super Crunching, it's going to be a lot harder to rely on other consumers to keep your price in line. The fact that price-conscious buyers patronize a store is no longer an indication that it will be a good place for you, too. The nimble number cruncher will be able to size you up in a few nanoseconds and say, "For you, the price is . . ." This is a new kind of caveat emptor, where consumers are going to have to search more to make sure that the offered price is fair. Consumers are going to have to engage in a kind of number crunching of their own, creating and comparing datasets of (quality-adjusted) competitive prices. This is a daunting prospect for people like me who are commercially lethargic by nature. Yet the same digitalization revolution that has catalyzed seller crunching has also been a boon to buy-side analysis. Firms like Farecast.com, E-loan, Priceline, and Realrate.com allow customers to comparison shop more easily. In ef­fect, they do the heavy lifting for you and help level the playing field with the price-crunching sellers. For consumers worried about the im­pact of Super Crunching on price, it is both the best of times and the worst of times.


Ayers presents many of the pros and cons of the ways in which the use of knowledge gleaned from vast amounts of data can help and hurt oneself and others. Super Crunchers may not break any new ground, and will be old hat to those who work with databases, but for the general reader, there’s likely to be new insights here about what the use of data can mean.



Steve Hopkins, December 20, 2007



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The recommendation rating for this book appeared

 in the January 2008 issue of Executive Times


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