Data is the new gold – is your business realizing its value?
In today’s economy, data is the most powerful asset of all, but are you using it the right way?
Data is increasingly behind everything we do. It shapes business decisions large and small, and it has become the world’s most valuable commodity. But, just as data is growing more valuable, consumers are increasingly concerned about how their information is being used. On one hand, it gives us personalized customer experiences and helps businesses reveal crucial insights into their operations. On the other, the public finds itself facing the rising threat of the so-called surveillance economy.
Things like gold and oil have long been hailed as safe investments, particularly during times of turmoil. But the real power lies in data, whether it’s predicting trends in the stock market or helping map out and mitigate the effects of the ongoing Covid-19 pandemic.
There are good ways of using data, and there are great ones. Most companies are already squeezing the value out of data to drive short-term initiatives, such as simple valuations and customer segmentation and targeting. This allows them to deliver personalized experiences tailored to the unique needs of different demographic groups and individual consumers.
Using data for good in the Age of the Consumer
"It’s time for many organizations to ask themselves: How is the data about customers being used to help customers?"
Joe Ucuzoglu and John Hagel III, Harvard Business Review, April 24, 2020
The real power in data lies in its long-term value to an organization. It’s also the most valuable and trusted currency. Businesses can use it to develop and continuously improve customer-centric experiences. After all, product and pricing are no longer the only consideration factors among today’s consumers. They’re also thinking about the experience they have when dealing with a company. A recent study by PwC found that 73% of consumers considered customer experience to be a driving factor in their purchase decisions, yet only 49% claimed companies provide a satisfactory customer experience today.
Data is the driving force behind customer experiences. For example, product data can reveal opportunities for improvement, such as recurring issues. This data can then be leveraged to create a better product or delivering a more efficient and convenient service. It can even help populate self-service support knowledgebase, thus reducing the need for customers having to wait in line on a call to support.
Data can even shape the entire customer journey. With data-driven insights into how potential customers find you in the first place, you can create targeted and personalized experiences. In doing so, you can reduce your marketing budget by ensuring your message reaches the right people at the right time in the right way. Another powerful example is recommendation algorithms, which suggest products and services based on the customer’s previous purchases or browsing habits. This increases the chances of customers making the right purchases; ones which are most relevant to them and thus most likely to lead to greater customer satisfaction.
Today’s organizations need to think about the entire customer journey when leveraging data to drive better experiences. Add emerging technologies like artificial intelligence and machine learning into the mix, and you even have ways of humanizing technology and delivering world-class digital experiences that help enrich your customers’ lives.
Empowering trusted relationships with a proprietary data strategy
"A company’s proprietary data strategy should address the full lifecycle of data — from what might be done with it, to how to get it, to the ethical considerations that might result from it.”
Thomas H. Davenport and Thomas C. Redman, Harvard Business Review, May 4, 2020
Perhaps the biggest challenge in leveraging data as a key business asset is doing it in a way that’s transparent and mutually beneficial. In a time when the trust deficit is at an all-time low, customers are increasingly wary about who they do business with.
Just like any valuable commodity, proprietary data, which is unique to the organization which collects it, can be used ethically or unethically. On top of that, we must consider the external threats to customer data, such as cyberattacks and leaks. More than ever, companies have to develop information governance and security strategy that’s transparent and integral to everything they do. New laws, such as the EU’s GDPR and California’s CCPA, have also been introduced to combat privacy-related offenses and give consumers more control over how and why organizations store and use their information.
By creating a trusted relationship in which we exchange data in a way that’s mutually beneficial to both businesses and their customers, we can start building and enriching these proprietary databases. Once customers can start recognizing the way you use their data to improve their experiences, they won’t just be willing to share their data; they’ll be eager to share more. But to reach that stage, you need to be upfront about the what, where, why, and how of collecting customer data before providing the impeccable customer experience needed to back up your claims. Then, you can collect data across more touchpoints and build a proprietary database that continuously improves the customer experience, drives brand advocacy, and substantially reduces your overheads.
Any organization can easily build a database of customer names and email addresses. But enriching it with further details, such as past purchase decisions, product page views, and demographical attributes, you can narrow down your targeting and personalize the experience all while reducing the burden on your sales, marketing, and support teams.
When building a proprietary data strategy, the first thing to think about is which data is actually likely to be useful. A lot of data has no value whatsoever to a customer-centric organization, including that which hasn’t been collected transparently and with explicit permission from the customer. Your first step is to determine how different types of data can boost your competitive positioning. This might include using data in product ideation, revealing new business models, or enhancing customer relationships. If the data in question can support your business goals, and has been collected ethically and transparently in accordance with privacy laws, then it has value. If it doesn’t, then you shouldn’t be collecting it, since doing so will only become a burden and potentially result in a breach of compliance.
Final words
The digital universe is doubling in size every two years. This unprecedented growth undeniably presents an enormous challenge to organizations as they struggle to retain visibility into their digital assets and recognize which data can support their missions. That’s why businesses need to implement a proprietary strategy that weeds out the dead weights in digital technology and empowers business leaders and their teams to achieve their goals to the benefit of those who matter most – their customers.
