How Modern Firms Can Capitalize on Data Assets
Adopting a data-driven operating model boosts customer loyalty and drives business.
Most companies are awash in business and consumer data – but they’re struggling to extract full value out of it.
Only 40 percent of C-Suite executives say they’re deriving the full economic potential of their data, according to a 2017 McKinsey survey. A recent study from Pricewaterhouse Coopers and Iron Mountain is even more pessimistic. Analysts found that two-thirds of senior business leaders in North America and Europe got either “little tangible benefit from their information” or “no benefit whatsoever.”
Why? Many modern businesses can’t make timely decisions because their performance reports are fragmented across several departments and businesses. As a result, they have no way of linking this data together to form coherent conclusions. Additionally, because the always-on cloud environment captures volumes of data at an accelerated rate, firms are struggling to measure performance in real time, and with how to pinpoint every opportunity to connect with consumers.
Now is the time to tap into data to boost customer loyalty, personalize experiences, and drive sales. But for brands, gleaning insights from their data will require investing in sophisticated data models and architecture that’s compatible with cloud infrastructure.
The playbook for running the business
It’s essential that organizations analyze the entire customer journey for each line of business, giving stakeholders the insights they need to deliver engaging experiences and drive sales. At Adobe, we refer to this as a data driven operating model.
Think of it as a playbook on operating and running the business for hundreds to thousands of internal team members based on four key tenets: commonality of data, consistency of measurement, actionable insights, and data governance.
Building off of these tenets, business stakeholders must collaborate to agree on key performance indicators (KPIs) to track across the customer journey; the process to take action on KPIs; the teams responsible for driving specific KPIs; and, a unified data architecture that serves as the single-source of “data truth” across the organization.
Putting in place a common data model and unified data architecture can be truly transformational for IT organizations. A data driven operating model solves challenges around disconnected datasets, fragmented KPIs, inconsistent data definitions, and unreliable insights. Additionally, leveraging a single-source of truth across the organization empowers IT to develop robust self-service dashboards and analytical experiences for stakeholders.
Once every company team starts speaking the same data language and agrees on definitions for success, acting on data insights becomes much easier and more informed. The conversation then shifts from tactical discussions on whose metrics are correct to business impact conversations on how to leverage data insights to further the business. Everyone – from the CEO to the data analyst – is well-equipped to turn data into consumer insights. The result is enhanced customer loyalty that drives the business forward.
Currency of the enterprise
Investing in a data model pays off. With data analytics, organizations can identify patterns in data to avoid risks and spot opportunities. According to McKinsey, using data analytics to predict consumers’ demands and personalize relationships can increase companies’ operating profits by about six percent.
The key to these profits is to treat data as currency.
Coca Cola, for example, leveraged data to offer live, personal advertising in grocery stores, with the goal of delivering a personalized, engaging experience to shoppers. The corporation used cloud technology to connect its consumer data systems to HDMI-ready display screens in grocery store soda aisles. The system displayed store-specific deals on the screens and sent customized shopping lists to customers’ phones. During a trial at 250 Albertsons grocery stores, the personalized advertising resulted in a positive return on investment in merely one month. That same personal advertising can be leverage in restaurants, cinemas and more.
For its part, 24 Hour Fitness – with nearly four million members and an industry leader in the mid-tier health club chain category – used analytics to reimagine its communications to members and offer more personalized content and workout reminders that are specific to individual needs and interests. This new method of communication has allowed 24 Hour Fitness to grow and retain members at an increased rate.
And Princess Cruises is leveraging anonymous user data to figure out how to target customers differently based on their interests and preferences on its ships. The cruise line is experimenting with sensor-based technology — people can opt-in for alerts via a physical medallion handed out when boarding. The alerts are based on activities on the ship that consumers are interested in, ranging from movies to yoga to poker games. This ensures people enjoy a personalized experience on their cruise.
There’s no doubt that Coca Cola, 24 Hour Fitness and Princess Cruises invested in their versions of a data driven operating model.
A competitive advantage
For businesses that hope to compete in today’s data and cloud-driven environment, investing in a data model isn’t an option; it’s a necessity. Harnessing a data driven operating model removes the need for data wrangling, keep executives and data analysts on the same data page. It offers intelligent insights in seconds rather than weeks or months, with the power to steer an organization’s entire business.
With such a model, modern firms are in stronger positions to outperform their competitors.
Article originally posted on CIO.com as part of the IDG Contributor Network.