No matter what business you are in – whether you are a travel manager booking reservations for corporate travelers, a retail department store manager, or an online game developer – you are constantly collecting customer information on your products and services.
Travel managers have data on clients’ travel spending, credit cards, and frequency of travel. Department store managers know about purchasing trends at their locations. Game developers have access to their customers’ computing preferences.
The New York Times famously reported that Target, which studies customers’ shopping patterns, tries to identify which patrons are pregnant in order to find ways to gear their sales towards this customer group. Target has over 50 employees who analyze customer purchases and other data, helping to determine the coupons customers receive in the check-out line and what they see when one visits the retailers’ websites.
Both traditional businesses and new-age tech companies are leveraging data to their advantage and the companies who unlock the value of this data are the ones who thrive.
What kind of data do you need?
What kind of data have you collected about your customers and their needs? How is your company using this to drive new revenue and to build brand loyalty? Some business leaders feel overwhelmed by the data that surrounds them and have not yet developed a disciplined way to use it. They don’t know which analytical techniques to use to generate new insights.
David DeWolf, CEO of software development company 3Pillar Global, said: “In the digital economy of today…instead of driving incremental profit, data should be used to create brand new, highly-leveraged and profitable business models that result in exponential growth. Innovative companies are finding new ways to provide Data-as-a-Service to both existing customers and brand new markets.”
Similarly, a recent McKinsey report stated that open data – machine-readable information, particularly government data, that’s made available to others – has the potential to generate significant economic value.
The report mentions that open data can become an instrument for breaking down information gaps across industries, allowing companies to share benchmarks and spread best practices that raise productivity. In doing so, it can unlock trillions of dollars in additional value.
Here are five ways you can unlock your company’s data to power your business:
1. Ask yourself where data by-products fit into your strategy and how you can harness them to drive new revenue streams. These data by-products are the trends and opportunities that you have already identified through your analytics to improve processes. DeWolf cites Cisco’s investment in driving the Internet of Things, with its collaboration platforms, as an example of a company looking to enable the next generation of data-driven products. DeWolf adds, “consider what insights you might provide to the market and explore the value of a Software-as-a-Service business model in providing them to new and existing markets.”
2. Look at your existing data sources and determine whether they provide a complete picture of all spending in a timely and uniform manner. If you are selling sneakers to millennials in Brooklyn, do you have data that informs your company on what price point sells best? Is your data discovering what brands are most popular, and what time of year sneakers fly off the shelves? This data can also be packaged and useful to other retailers in similar markets: in San Francisco, Atlanta and Austin, for example.
3. Expand your data sources. If you’re a travel manager, don’t just rely on customer data, also take a look at their individual payment methods, third-party consolidators, government agencies or data providers such as ARC – the Airlines Reporting Corporation. ARC has the largest airline database in the world, and for travel managers who are using data to determine which carriers and flights provide the best overall service for their corporate clients, ARC is a gold mine.
4. Be creative in your approaches to data. Use it to innovate and transform. For instance, a maintenance company can leverage service records and strategically placed sensors to provide proactive notifications of necessary maintenance to customers. By utilizing all available data from manufacturers, products and consumers, repairs can be predicted and prevented before a breakdown occurs. This then improves customer satisfaction and loyalty.
5. Trust your data. An even mix between human judgement and machine-operated algorithms ultimately creates the perfect outcome. A confident executive will use data to complement his/her decisions. You want to capture, organize and analyze your data about your customers and markets, and then you want your team to pore over this data and use their wise and experienced judgment to put it to good use.Data is power. Use it to your advantage and be creative. Don’t be left behind your data-driven competitors. Employing the information well will lead you towards a more profitable future for your business.