By Hunter Albright
The opportunity for creating value through data has never been greater. Companies are becoming increasingly aware that they are sitting on huge amounts of under-utilized data and looking for ways to increase its value. According to a recent study by Forrester Research, most companies estimate they’re analyzing a mere 12% of the data they have.
Furthermore, not all organizations are equally adept at translating their data into value, and their ability to do so is impacting their ability to compete. Some businesses, such as information service providers, have always been about deriving value from data. However, the ability to use and monetize data is now impacting almost every type of business. As a result, driving value from data must now be contemplated as part of an overall business strategy.
The companies that are the most progressive at how they look at data, like Google, Uber and AirBnB, are creating significant value and changing the economy. They way they look at data and figure out how to extract value has become a compelling and sustainable advantage.
Opportunities can hide in plain sight. Some ways to positively impact the bottom line using data include:
- Infer customer satisfaction
- Minimize customer churn
- Identify your best customers – your target new customers
- Improve your marketing ROI
- Improve your operations and drive up your margins
- Improve your product development
- Identify a new revenue model
- Disrupt your own business – before someone else does!
Start with Questions
The conditions for data monetization for a wide range of businesses are great:
- Massive volumes of structured and unstructured data;
- Increasing ability to execute data-driven marketing campaigns across multiple channels that create relevant customer experiences;
- Improving business intelligence and processes by applying data analytics.
However, these same trends create challenges for businesses. Too often companies get off course by diving right into the masses of data that is available. Instead, the focus needs to shift to thinking about the right questions and the answers to them — the value is in the answers, not the data.
Therefore, it is important to start with the key questions that can most greatly improve your performance. Use these questions to better define the problems that are most helpful to solve. Then use the data and analytical techniques available to develop potential solutions.
As you go through this process, inspiration for data monetization can come from the questions, from the data, and from the analytical methods.
A Guiding Process for Success
Given that the ability to leverage data significantly impacts a company’s ability to compete, in the next five years, fortunes will be made and lost based on which leaders can most effectively reorient their approach; initiate enterprise-wide; data-led transformations; and effectively monetize this new type of asset.
Every company will approach data monetization differently, and getting it right can be hard. However, you can improve your changes for success by stepping through a simple four-step process:
- Needs Validation – identify a need that has value and urgency for you or your customers.
- Solution Design – collaborate with your potential customers or similar companies in the design of the solution.
- Solution Validation – quickly deploy the solution to validate that it works and quickly iterate to a market ready solution.
- Creating Scale – once you find a solution that works, focus on creating scale.
To learn more, get some top tips and recommendations on tools that can be helpful, check out my Speakers’ Corner webisode, “ Monetizing Data: Are You Doing Enough?”