This isn’t a blueprint about how data can make you money. Yet, you may find some sage advice.
Of all the advantages that evolving technologies offer to the business owners of today, few compare with the power of data. We now collect, store and use more data than we ever have – and the ensuing effect on businesses has been transformative, to say the least. In fact, telecom giants EE, for example, now have a dedicated strategy department just to evaluate how their data (location data, for example) can be monetised.
However, despite living in an era where data is the keyword, the flow between data, actionable insights and monetisation may not always be as obvious as one may think. In fact, it hardly is. So much so, that a keyword search of ‘don’t know what to do with data’ on Google yields an astonishing 5.3 billion search results! While this number may be different depending on where you search it from, the essence remains the same: people, on the whole, are still very much unsure of how to use data effectively.
Esteemed technologist Bernard Marr seeks to address just this in the current edition of his weekly newsletter and it’s rather interesting that he does this. The previously mentioned Google search found articles dating as far back as 2005 addressing the very same issue. The fact that we are still tackling the same issue almost two decades later, is testimony to the monumental power that data possesses.
Of course, the way we conceive data has evolved almost radically since then. What hasn’t changed one bit, however, is the constant human endeavour to extract the last ounce of convenience from this resource, much like oil. Data is, in fact, the new oil that drives the economy.
“We have all this data. How do we monetise it?”
Honestly, if there was an exact blueprint to follow, this writer would be rendered honourably unemployed almost immediately. As the case stands, there isn’t. However, most organisations that seriously looks at data-monetisation, adheres to the following pointers:
- Customer-first: The primary way to make data work for you is to use it to capture market trends and shifting consumer demands thoroughly. Often, analysing regular streams of data can offer incomparable insight into what the consumer wants – both now and into the future. And this should be the primary focus of any consumer-centric business.
Forbes adds: “Regardless of whether you run an e-commerce store or sell B2B services, understanding your customers is key to your growth…As just one example, tracking results from website traffic and social media campaigns will reveal how your target audience is responding to your messages.”
The Customer Relationship Management (CRM) software business is booming at the moment, and will continue to do so at least for the foreseeable future. This is because it simplifies “each interaction a prospect has with your brand, allowing sales teams to better prioritize their efforts.” In fact, research from Canton Group even reports that analytics is now being run in real time to perform speech analysis to aid sales representatives match keywords – even the tone – that the customer uses.
Marr sums it up really: “Using this strategy for monetizing data is a great long-term move for your company, because your responsiveness establishes customer loyalty, which in turn increases the lifetime value of each customer.”
- Expense Management: This is another area of your business that, simply put, needs data to be done right. Data must be used as the central pillar of your business back-end, to both streamline and optimise operations and reduce business expenditure. This becomes especially relevant if the business in question produces a physical product and needs to tackle supply chain inefficiencies.
“As just one example, Supply Chain Dive reports that 40 percent of food waste in the United States is caused by supply chain issues – in this case, because of food spoilage that occurs while in transit. Damage to fragile items, or even shipping delays, can cause similar waste across many industries, which can greatly hurt a company’s bottom line.” — Forbes
Data must be used to optimise said processes by automating tasks with AI, reducing marketing costs and handling logistics and transportation issues. Consider, as an example, the use of small analytics tools such as Logmore – the company’s small, inexpensive logger devices collect data on shipments and sync it with cloud servers with a simple QR scan using any smartphone. This helps businesses deal with temperature-sensitive items, allowing them to identify which suppliers are creating waste. In this case, using data to know when to switch suppliers could help a company avoid major losses.
- Selling/Renting out Business Data: Marr makes a rather astute observation, in this regard: “a company’s data is becoming increasingly important as an asset in its own right.” In fact, data assets are now regularly considered a part of a company’s overall valuation.
Selling business data may offer much value, especially if it is the kind of data that is unique, or difficult to accrue. Finance giant Visa, for example, adds over a billion dollars to their annual revenue just by selling customer purchase-pattern data back to retailers.
Marr opines: “even organizations that are not strictly data companies can make money from their data. For example, farm equipment and tractor manufacturer John Deere created an intelligent farming system that pulls in soil and weather information, then provides recommendations to farmers about what to plant, when to plant it, how much fertilizer to use, and so on. John Deere makes over a billion dollars a year selling their data to farmers.”