Data is a strategic asset for business whatever the size. Getting value from your data however, can present a challenge for many, and a sound data strategy will define the route map and capabilities you needed to be successful.
Your data strategy will identify challenges and set out the approach for how your business will operate with data to avoid these.
Why do businesses need a data strategy?
A data strategy sets out how your business should use data in practice and what its priorities should be. It defines the most important data, how it needs to be collected and stored, and what needs to happen to turn it into something useful that will generate returns.
Crucially, the strategy details how your business should execute this safely, protecting customers from privacy breaches and protecting the business from data mis-use.
A data strategy should also be part of the wider business strategy and plans for change. It acts as the unified voice for data and sets out the vision and goals for what success looks like.
Improved decision making and goal setting
In today's highly competitive multi-channel world, being able to access robust intelligence on your business, so you can make informed decisions has become a crucial capability. In the world of retail and online this has become an absolute necessity, for example having the ability to rapidly respond to competitor activity with effective changes to online advertising and pricing.
Likewise, with so many more moving parts to contend with, data plays a valuable role in the ongoing tracking of performance against targets, helping managers to keep on top of performance and knowing early enough when to make changes.
How business should use data strategy
The overriding goal of the data strategy is to enable the business to use analytics effectively and access fully the opportunities it presents. Success is measured by the attainment of increased revenues, operational efficiencies and increased customer satisfaction. Central to all of this are the people who need to affect change off the back of the data insights and this relies on their engagement and buy-in to make change happen.
It’s vital therefore, that the data strategy is a collaborative, shared endeavour and not something that is done to people or teams. This is one of the main reasons we advocate an approach that focuses on delivering quick wins alongside the strategy. These quick wins can be small in scope and scale and relatively easy to implement such that you can afford to do many of them and in doing so demonstrate the benefits to many different stakeholder groups.
These quick wins do not need to slow down the broader implementation of the data strategy and can instead serve as rapid proof points for key decisions, such as system and tool choices further building confidence and engagement with the business.
If you would like to discover more about the value of implementing good data strategies within business, contact our team of experts directly. If you enjoyed this article you may also be interested in our strategy consultants insights including similar articles: A Guide to Defining your Data Strategy and The Key Components of Data Strategy or Unlocking Data Insights for Customer Loyalty.
How can businesses benefit from a data strategy?
Throughout our many years of data analytics consulting we have worked with many businesses on their own specific applications for data and whilst many of them are similar, we are constantly discovering new ideas and realising that the applications can be limitless.
The main ways we see that businesses can benefit from big data analytics are:
Improved decision making and goal setting.
Customer understanding and trends.
Delivering operational efficiencies.
Developing new products and services.
Improving and optimising the customer experience.
Improving the workplace.
Creating new revenue streams.
Customer understanding and trends
Staying on top of how customers are shopping with you has always been a cornerstone to managing a business. Data follows these customers throughout their interactions with you and all of these points can be joined up to paint a highly accurate picture of their journey and what is going on and perhaps is not working as effectively as it should.
Data also takes on many guises and one incredibly powerful type is the metadata that sits behind the product and content your customers are consuming. This can be used to help create powerful lenses into the needs and preferences of your customers.
When this understanding of needs is combined with the behavioural view of their interactions, incredibly actionable insights can be developed to inform product and pricing strategies as well as the overall customer experience. Likewise, this understanding can be used to track when behaviours appear to be changing for the worse.
Attrition models rely heavily on understanding a range of different behavioural cues for each customer. This can be immensely effective at providing an early warning system that a customer is switching. For example, a B2B credit card business has increased its awareness of potential attrition from practically zero (e.g. it was nearly always too late to recover the client by the time they realised) to almost six months. This has reduced attrition rates by 18%.
Delivering operational efficiencies
Data can help optimise your operations in many ways. In manufacturing, for example it is the cornerstone of planning and supply chain management and is what sits behind the technology that drives automation and robotics. In consumer-focused sectors it can be used in operations; to optimise where to locate your stores, to get your opening times right to maximise takings and all manner of workforce scheduling for sales and delivery teams.
Developing new products and services
For many brands, keeping product offerings fresh and up to date has moved from an annual or quarterly strategic planning event to something far more dynamic. You only have to look at the pace of change and new product delivery expectations in the fashion sector, as an example.
Data can build understanding of how your customers are using your products and even the combination of products in their basket can help you uncover useful insights into what else you could be selling them or how you could make changes to your products to meet new needs.
Improving and optimising the customer experience
Many businesses are now delivering their products and services, if not entirely online, then with a large proportion of the customer experience through digital channels.
It is absolutely essential to ensure that every customer that visits your website (who you may well have invested heavily on advertising to get there) is presented with a relevant experience that encourages them to stay, explore your products and eventually purchase. Otherwise in one click they are off and with a competitor who is offering something more relevant.
In the digital sphere, data is sitting behind every interaction and mouse click and there is a great range of tools available to help you track and understand consumer behaviour. Pulling all of this data can often be quite a task to start with but over time the benefits can be huge.
These range from quickly spotting areas that are leading customers to drop off and rectifying this, to the revenue gains from increasingly sophisticated targeting of personalised messaging and content based on behaviour, that ensure the customer sees what they want and makes a purchase.
Improving the workplace
People are at the heart of any business and data can play a role in improving the workplace too. This can be as simple as making information more readily available so everyone knows what to do.
For example if a sales agent knows exactly where they stand on their weekly targets and what they need to do to exceed them and secure a bonus, they will likely be far more motivated than one that doesn’t find out until month end.
A recent project we worked on for a retail client looked at providing simple sales reporting dashboards for every individual sales agent. These give each agent a detailed breakdown of where they are at and what they need to do to hit their targets. Sales productivity has increased by15% following the implementation.
Smart buildings are becoming an expectation of the modern workplace and data enables this, be it through ensuring meeting room bookings are easy and availability is optimised through to managing the environmental quality through smart sensors.
Creating new revenue streams
Some businesses create huge streams of data that can often hold intrinsic value to other companies in the form of insights. Think, for example, of the travel booking and payment platform that processes millions of transactions and the unique view they might have on a particular consumer segment or market.
These insights are of huge value to people in and around the travel industry such as tour operators, tourism bodies and airlines for example. When packaged well into digestible and actionable insights, they can generate great new revenue streams for a business.
One such solution for one of our clients has grown from a standing start a couple of years ago to having more than 800 travel agencies subscribing to their market intelligence solution.
How do you leverage data to develop a strategy?
A good strategy is built from sound problem solving techniques and creative idea generation wrapped up with a solid understanding of your customers. This is data’s bread and butter.
Data will provide a factually accurate and impartial view on your business performance across a number of important dimensions. It will tell you not only what is selling well, but who is buying. Conversely, it will help you spot the drivers of poor performance and help point you to the causes. This will give you the foundation to your business strategy by answering what is going on today, how you got here and what is or isn’t working.
This foundation is the basis from which we can model and scenario plan your new business strategies. You can use this to provide realistic scenarios based on true customer behaviour that will allow you to sense check what has to happen to meet your revenue goals or aspirations. This will ensure your strategy is realistic and not exagerrating the market potential or assuming unrealistic purchase rates from your customers.
This robust approach to business planning and enabling the business to see the size of the prize of the key strategic initiatives it wishes to undertake. It can also form a sound business case for the implementation of the data strategy and required investment in the people systems and tools that will be needed.
Finally, data sits at the heart of measuring progress against your strategic plans and will help you quickly identify when and why you are heading off course.
For further insights please speak to our expert team directly, or you may enjoy another of our Featured Insights such as Unlocking the Value of Data in the Subscription Economy.