Editor’s Note: August’17

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asked about 1 week ago

Data – The new paradigm for today’s successful Entrepreneur. 

Successful businesses are increasingly focusing their energies on one area – data. And specifically, the use of it to drive business strategy. I’m in absolutely no doubt that, as time goes on, the difference between success and failure will be those companies who embrace data and those who don’t.

Don’t panic. It’s more evolution than revolution. Most companies already possess a goldmine of customer data. They’ve been generating it for years – often unknowingly – through various portals like websites and apps, till sales and customer service logs. It’s just that many haven’t realized what they’re sitting on, let alone considered mining it.

Ground-breaking companies like Google, Amazon, Farfetch and Missguided have generated rampant growth through making sense of billions of lines of customer data. By turning unstructured statistics into tangible insights, they’ve consistently acquired new customers, retargeted existing ones and improved overall customer experience in real time, on a person by person basis, with ever-increasing accuracy.

Gone are the days of mass segmentation that divvied up the customer base into more manageable piles, like “YUPPYs”, “NEETs”, “Marlboro Men” and “Millennials”. The only issue was, any one of these could include millions of completely different, potentially conflicting personalities, based on a series of generic lifestyle factors. As such, they were rendered largely useless.

Google’s chief marketing officer for EMEA states that, in the past, marketers had to group millions of customers together into more “manageable segments”. Today, the digital economy provides such robust customer data that they no longer need to distinguish so broadly.

And beyond marketing, data is impacting on trading, stocking and distribution decisions. According to market research firm Slice Intelligence, Amazon sales accounted for 43% of all online-generated revenues in the US market in 2016. By continually inching up performance metrics through data analysis, the resulting marginal gains delivered amounted to billions of dollars in extra revenue.

By knowing the products users want and when they want them, customer data-centric companies can reduce costs and maximize returns and efficiency, avoiding the need to discount undersold lines clogging up warehouses.

Established corporates are starting to take note. C-suite level chief data officers, increasingly reporting into CEOs, are starting to appear around Fortune board tables. The rationale for this change is simple – Effective implementation of customer data can immediately turn a seemingly faceless conglomerate into a personal acquaintance or friend, attuned to the needs of each individual customer. And there’s no better way of ensuring brand loyalty and love than that!