There’s a whole lot of data out there, and it is increasingly important to find ways to measure and make sense of it all. As the CEO of a midsized company, you may already have a firm handle on the world of data – or, you may feel like the value it adds isn’t worth the time it takes to manage. You’ve made it this far without Big Data, and you’re doing just fine. Well, as our guests this week point out, you probably also did just fine up until about the mid-nineties without a website, but times have changed. We are through the data looking glass, and there is no going back.
Data analysis, for many of us, makes as much sense as gazing deeply into a crystal ball and hoping for a recognizable sign, but don’t worry. Help is out there. This week I am happy to welcome Andrew Wells, CEO of Aspirent and Kathy Chiang, VP of Business Insights with Wunderman Data Management. We talked about the importance of data to your mid-sized business, and simple ways it can make a difference.
“Companies that are using analytics as a competitive advantage are winning at a higher rate in the marketplace.” – Andrew Wells
#1 Target Your Promotions
Having great relationships with a local customer base has long been the turf of small to mid-sized businesses, but data analysis is beginning to even the playing field. With data, larger companies are able to use micro-targeting effectively to draw in niche customer groups that would not have been affected by the broader marketing campaigns used in the past.
As I’ve talked about in a past article, The Magical World of the Data Whisperer, data scientists for Target realized that pregnancy was one of the few times that customers go through great changes in their shopping habits. Based on purchase habits, they learned to predict pregnancy with such accuracy that they actually began to freak out their customers by mailing ads for baby supplies before parents had even announced the pregnancy. Target corrected this issue by mixing ads for lawn care or kitchenware in with the baby promotions to make them seem more random. Campaigns like these are extremely effective in drawing in new customers, many of whom may have been your former customers.
Small to mid-sized businesses can use data effectively as well. Kathy gives a personal example. She shops at a local shoe store for a particular kind of shoe. When she gets a coupon she goes into the store, but if her shoe isn’t in stock, she leaves without making a purchase. It would be a very simple matter for this shoe store to note her purchase history, and target her with a coupon when they have that shoe in stock. This would decrease marketing cost and increase sales for the shoe store.
#2 Manage Inventory
The promotion mentioned above would also be a step towards helping the store manage inventory. To move items off your shelves it’s helpful to know which of your customers is likely to be in the market for those items.
External data is valuable here as well. Andrew tells of a car company that mines local search information for data that they can use to stock their dealership appropriately. If they are seeing a high amount of searches for trucks, then they know it’s time to increase the number of trucks on the lots.
The ways to keep track of retail data are increasing. We did a show last August with Trax Image Recognition, a software that uses data from your store, as well as other retailers, to create a highly automated and effective way to keep store shelves stocked with the items your customers are interested in buying. With the right support, it’s incredibly easy to find ways to use data to stay a step ahead of your customer’s needs and desires.
#3 Effectively Allocate Your Assets
Data isn’t all customer centered. B2B businesses can get in on the action as well with things like asset allocation. When should service vehicles come in for maintenance? What routes should delivery vehicles take? Where are you spending money without a return? Solutions like Trax Image Retail are also a great fit for B2B retailers, increasing the movement of the products they get out on store shelves.
#4 Sell Your Data
If you are collecting a lot of customer data, selling it might be an option. This is described by HBR.org as an “edge opportunity”, or a business opportunity that grows as a byproduct of your main operations. It is what many people think of when they hear the term “monetizing data”. It’s certainly not the only way to monetize, but bears mentioning. The key here is to find companies that would be willing to pay for the data, but who are not direct competitors. Those that offer a different product to the same client base, or who operate in related fields.
The article says, “Many companies guard their data as their crown jewels. They mine the data looking for every possible advantage over their competitors. Most are not inclined to ask,‘What company would be willing to pay for that data?’ But by failing to ask this question, they are leaving money on the table.”
#5 Balance Product Complexity
Many products these days are configurable. Using data, explains Kathy, you can look at what people are ordering, and adjust placement on your website to “nudge” them towards ordering the products that are easier for you to produce.
She says, “How you place the information, how you present information to your customers, can go a long way to helping to maintain or create economies of scale in your manufacturing or production processes.” Selling more is not always the answer. Selling smart can go a long way towards increasing your bottom line, and data can help you do that.
#6 Make Reports Actionable
Easy reports are probably not the first thing you think of when you think data, but used the right way, good data analysis can greatly simplify the information shared with different players on your team. Andrew says, “It’s a fundamental change in how people view analytics. It’s more actionable. Instead of you seeing a report that shows you 1,000 different products on it with all their different stocking levels, you see a report that just has 10 on them. And those 10 are the focus areas.” Good, targeted data can help team members decide where to focus their attention.
#7 Build a Strong Team
The use of big data in human resources is growing quickly. Entrepreneur.com states reasons to use big data in hiring and retaining staff including finding the right people, making the most effective offer, training employees, and retaining team members. You can decrease the cost of finding the right employees, train them with less expense, and, by knowing what keeps your best employees happy, avoid the high cost of employee turnover.
#8 Make Great Decisions
The analytics maturity model is a common data model that starts with the descriptive, or the “what happened?” From there it goes to the diagnostic question, “Why did it happen?” Then, the predictive question, “When will it happen again?” Then, you look at how to change your future. Says Kathy, “If you start thinking about that as a natural, logical thought process, and you start mapping your data to that thought process, it can actually help you be more focused and targeted in your actions.”
To make date more effective, Andrew and Kathy utilize decision theory, data science, UI/UX, and agile analytics. I won’t go into all those here, but you can read more in Andrew and Kathy’s new book Monetizing Your Data. Long story short, by targeting the right data to the right people, you can simplify the decision making process. And, as I’ve mentioned before, data analysis is a great place to bring experts that can target the data in such a way that it makes bottom line sense for your business.
Big Data is here to stay, even for the small to mid-sized business. It can make you more money, and can simplify your life in many ways. Find a way to structure it so it works for you, and you will be armed and ready to face the future. Just like that time you finally got yourself a website.