As a business professional, you must always assess your return on assets. Return, as the numerator, can be measured on how you earn, quantitatively or qualitatively. Assets, as the denominator come in many shapes and sizes.
As an example, one of your greatest assets are your relationships. You nurture them, you understand them, you connect them and you invest in them in an effort to drive return.
Today, data is becoming as important as your relationships and you should treat it similarly; nurture, understand, connect, and most of all, invest in data.
Business success rests on one fundamental principle, selling a product or service to your customers. Therefore, understanding your customers wants, needs, problems, and desires is at the heart of every organization. As options to purchase exponentially grow, customers have countless options. For this reason, consumers’ tastes, desires and expectations are changing far more quickly than in decades past. Remember the Ford Model T? You could purchase this car in any color; as long as it was black. Now you can customize your sneakers for any color style and size. One data source worth understanding and investing is social media data. Many companies, including a company we know well, RXA.io, have built social listening tools to help your monitor the “Voice of the Customer.” Investing and understanding your customers through data and insights will help you adapt to their needs in continued service to them.
As customers’ demands change, products and services change. These changes force a change to your business model. One easy and obvious example is the shift from software licensing to software-as-a-service business model. Just 20 years ago, everyone bought a copy of Microsoft Office, installed it on their local hard drive and began their day in Work or Outlook. This licence required local storage, constantly adapting hardware and an IT support team. Today, you can literally accomplish the very same tasks with your mobile telephone. Monitoring and investing in marketplace data such as rising star companies and those that are shrinking and showing signs of weakness may help you understand where to take your business model.
Adjusting your aforementioned business model could seem daunting. However, leveraging data can help you overcome this mountain and change and actually make you very agile in how you react to customers and market conditions. As an example, we have a client that sells Rolex watches. Through their success, they are looking to geographically expand. Leveraging and investing in control data such as interest rates, average household income, consumer sentiment housing starts and other public data allowed them to map the targeted geographies where they felt they could build on their success. Furthermore, they used this type of data to better manage inventory, adjust personnel levels in their stores all resulting in increased profitability.
Modern and evolving tools are now on our doorsteps. These tools such as machine learning and artificial intelligence rest on voluminous amounts of data to help create predictive models. From a business perspective, we understand return on investment, profitability, margin, and market share. However, some many dependent and independent variables can affect these numbers. In fact, the interdependence of all the variables can be overwhelming for even the brightest of analysts. Computing power and machine learning algorithms can greatly aid this effort. However, the fuel that drives this engine is data; therefore capturing, organizing and investing in all types of data is extremely important in leveraging these modern day tools.
Simply said, data can be fun. We all know business is a combination of action, reaction, adjustment, measurement and back to action. In the growing world of data, analytics, and feedback, the measurement phase can be really rewarding. Combining your business intuition with empirical support not only eliminates guesswork, it can be downright rewarding. Much of business frustration stems from not knowing why. Data can help answer why, which is fun.
Five reasons to invest in data; just like the other assets of your business.
Continue to create a data-driven culture.
Nurture, understand, connect and INVEST in your data.