There Is So Much Data – How Do You Exploit It?
You would have to have been living under a rock to have missed the explosion in the amount of data that is available to businesses nowadays.
From data produced by website visits to sales data from operational systems to external data that you can access on both free and paid for public sources, data is everywhere.
We saw in our recent event Innovation Driving Growth how the Internet of Things (IoT) has produced many more possibilities for developing data sources but this begs a question “with all this data around, how do you exploit it?”.
In the second of our event inspired articles (you can find the first here), we are looking at how companies can use the data that they obtain to make life better for their customers and to produce efficiencies and of course more profits for their company.
In this post;
- Using data to develop your offer
- Marketing is about testing
- Using data to understand your customer
- Starting the data journey
- Summary: data is here to stay so make it work for you
Using Data to Develop Your Offer
The first place that data can help businesses is in developing their service and product offers for customers.
Although we are talking about future developments in data use, this is an area that companies already have a lot of data about. For any business that is already operating, data will exist in their internal systems to show what products are the most popular, what is most profitable and what things people typically buy together.
It is simply then a matter of spending some time analysing this to develop an insight into what products should be dropped, what nurtured and what future developments may make sense.
And those developments don’t need to be earth-shattering or massively innovative. Just the act of assessing what products customers typically buy together and then producing bundles, upsells or pop-ups that lead the buyer of one item to buy a second will pay dividends.
But taking that a step on, understanding customer behaviour can lead you to develop new products and services that address a need that you haven’t yet identified and this is made much easier by excellent data analysis.
Marketing is About Testing
One of the most misunderstood aspects of marketing is that you can take an approach, apply it to a company and it will instantly work.
Whilst this is sometimes true, on most occasions marketing becomes a lot more like science in that you produce a hypothesis, test it, analyse the results, revise your approach and then test again.
None of this is possible without access to credible data.
This is the reason why marketing systems like Hubspot have A/B testing options, where landing pages, emails and signup forms can be tested against one another to see what works the best.
Data can be gathered on the options, changes made and then new data gathered about the effect of those changes.
One of our panellists, Melanie Vasser explains “it settles arguments within organisations because you can have data provide the evidence of what works better”.
But it is a mistake to think that because one marketing approach works well with one section of your target customer base it will be universal.
Jelte Liebrand. Co-founder of Savvy Navvy gave his experience of working with global customers “We have users in the US, Australia, Norway etc and each market behaves differently and if you try to internally guess you are going to get it wrong. If you A/B test it then you are going to get a lot more valuable insights.”
So although you may have something working brilliantly for 50-60 year-olds, you may need to produce a new approach for the 18-30 age group.
Using Data to Understand Your Customer
Being able to truly understand your customer is the marketing nirvana for any organisation and data gives us a way to do that.
Deep customer insights can help us to segment so that we are serving people better, reward our most valuable customers, win back lost customers and get real-time feedback from them to understand our current service levels.
Melanie gave some insight into her experience when she said “When I think about the retailers I have worked with who brought together data from their website, transactional systems and loyalty cards they were able to quantify just how valuable the customers were, a telephone orderer versus a website customer for example”
Real-time data analysis allows your business to be agile, responding to changing demands, acting on issues that occur and reacting to competitor initiatives.
There is also an important strategic point here. We’ve focused on the micro-level of data, looking at how we can better serve individual customers.
But it is also important to look at your data in the round at a macro level. This will give you a sight of the big-picture and allow you to develop strategic plans around changing customer tastes and habits.
Starting the Data Journey
If we have convinced you about the opportunity that data presents then you are probably asking about how you start on your data journey.
The first port of call has to be to understand what information you have and what you can get. At the start, you won’t know what is important and the truth is that sometimes insights can pop up in the most unexpected places, so collect as much as you can.
Then look at data quality. Drill down into the numbers and make sure that what you are seeing is accurate.
Then look at ways to draw this together. If you are like most businesses, your data will exist in virtual silos.
Paul Tansey from Intergage made the point about small islands of data “almost every small business I come across has that challenge. They have separate CRM systems, accounting systems, email, websites and of course hundreds and hundreds of excel spreadsheets. In fact, I’d say that if they were asked to remove a customer’s data under GDPR 98% wouldn’t be able to because they don’t know where it is”.
Once you have integrated the data then you need to think about how to analyse and present it.
Data analysis is a very specific skill set and so if you are large enough then it is worth bringing in data analysts to work on your systems. If not, then the good news is that there are a lot of freelance analysts that can be contracted to work on specific projects or engaged on a retainer to help you with your data journey.
When you have started producing analysis it is then time to look at it with a critical eye and decide what is important to you and which areas you should focus on.
Paul again “We’ve all got to make sure that we look at data and understand what is actually the important stuff and then present that in dashboards that make sense”
A note of caution here though. It is not always possible to find the data on the things you are looking to change, but Jelte gave a good solution to this “It’s not always possible to find data on the thing you are looking to improve, so you can use a proxy to look around that and ask if there is anything in customer behaviour that will give you an answer.
Once we have the right data, presented in the right way we can then start to ask important ‘what if’ questions.
And this is where data analysis really starts to add value to a business.
Questions like “what happens if I get 10% more people to my website”, “What happens if I make 5% more phone calls” or “what happens if I can get back 20% of lost customers” have the potential to transform the sales function of the company.
Melanie has some sage words of advice. “Remember to start small and then build up. You will ask the wrong questions but you will always learn something and then you can revise and retest.”
Summary: Data Is Here To Stay So Make It Work For You
It is a fair bet that if you are reading this then you have some data available.
Whether it is in your accounting system, your e-commerce platform or your operational systems, it will be there.
So to a large extent, exploiting that data is a matter of deciding what you want to do and what outcomes you want.
You may have to put in new systems to collect additional data but as long as it is accurate and credible then it will be worth it.
Data analysis can add value to your company by increasing the average spend of your customers but it can also give them a much better experience leading to better loyalty and more frequent purchasing.
If you don’t have the skills or experience to start on your data journey then you can find plenty of data analysts, marketing professionals and technical systems engineers to help.
Take Melanie’s advice and start small, but start today on your new data analysis journey.