Data has increasingly become an asset in its own right, capable of identifying and generating extensive business value in today’s digital-focused world. Data monetisation alone is a growing industry with an expected growth rate of 24% by 2027. There’s no doubt that it’s set to become more valuable this decade to those who fully embrace it.
We already see how new digital technologies are enabling vast new sets of data to be collected and analysed across a business value chain to create new sources of income or allow for streamlining. In particular, I see three – cloud services, machine learning and automation that can today be deployed alongside existing IT assets to tap into ever-growing opportunities for data monetisation.
As more companies embrace the use cases being unlocked by the new data economy, further benefits will materialise. Enhanced decision-making and analytics highlight important inefficiencies and pinch points along the value chain, while automating repetitive and laborious tasks creates efficient streamlining of operations.
Even more, CX can also be boosted – and there are many more further opportunities available through third-party platforms.
1. Harnessing data insights will usher in greater CX and customer loyalty
Maturing digital solutions bring the ability to contextualise data and create new business value, particularly when it comes to customer relationships. With 80% of frequent shoppers now only shopping with brands that personalise the experience across the customer journey, companies that can collect customer data and produce relevant insights will be able to better understand preferences and be rewarded with loyalty.
Research reveals that an overwhelming 95% of companies saw 3x ROI from their personalisation efforts increased profitability in the first year – and this is where digital transformation plays a key role.
Take Carter Jonas, a leading property service company. It was able to improve its customer profiling processes with a customer relationship management (CRM) upgrade. Working with Columbus, the company wanted to deliver excellent customer experiences and by upgrading to a cloud-based Microsoft Dynamics solution, made this ambition a reality.
Carter Jonas can now capture a contact’s preferences and buying habits on any device and unify this data in a single location. This allows customer service and marketing teams to better tailor personalised messages to enhance up- or cross-selling efforts with existing and prospective customers.
2. Selling data through data insight models creates new revenue streams
Beyond businesses using their own revenue-generating data insights to improve product and service offerings, the value of data as a business asset can be exploited through licensing to third parties. There is now more interest in actionable data insights as opposed to raw data, as leaders look for more business-specific insights.
For instance, pharmaceutical companies looking to improve sales could purchase anonymised, aggregated health data collected from IoT sensors that monitor vitals, such as blood pressure to find new customers and more effectively target their product marketing.
Industry-specific market research organisations such as Nielsen and Gartner already monetise data in this manner. Other companies across different vertical markets have also started to explore this new revenue stream.
For example, Uber knows the location of its users based upon their pick-up and drop-off locations on the app, and with their permission, the company can share this data with third parties. Uber has also launched a service that lets its customers connect their account to a Starwood Preferred Guest Account and earn points while riding.
3. Third-party platforms will transform data use via democratisation
Our experience at Columbus has also led us to a new revenue source in the form of third-party platforms. Even with recent tech advancements, some companies are still not set up to collect their own data and this is where third-party platforms can support the capture and sharing of data with partners of all sizes in order to offer new customer value.
As reported by Marketplacer, Shopify research states that third-party marketplaces now account for half of the global sales volume, which is currently priced at $907.68 billion.
Repackaging of data sets takes this one step further. Take a home improvement retail company that captures customer data in its raw form. A third-party platform could connect the retail company with a kitchen installation company, combining products with a service offering to deliver an optimised experience that customers are willing to pay more for.
Looking beyond specific examples, a recent report highlights how 68% of customer experience experts believe that customer expectations are rising. This means the creation of third-party platforms that bring together a wide range of product categories into an experience-driven event will be key to meeting customer demands and creating new business relationships.
Endless opportunities if you approach data monetisation correctly – it’s a regulated market
Now is the time for businesses to seriously consider investing in data-focused revenue models that will be both lucrative and operationally transformative if done correctly. There are, however, some challenges that businesses should be aware of – such as the stringency of GDPR and the Data Protection Act 2018, plus a pronounced shortage of tech talent in the UK – all of which are hurdles to the recent adoption of new technologies.
These challenges can be overcome, but it will require the support of a trusted partner such as Columbus to provide support to implement digital infrastructure and unlock new business value.
The correct partner should be able to evaluate the most suitable systems, workflows and departments for effective digital transformation, and help implement this with minimal operational disruption. By harnessing this support, businesses, regardless of size, will be in a strong position to harness the new potential of the emerging data economy.
Download our cheat sheet to discover how you can prepare your business for the digital transformation that’s inevitably required to achieve this outcome.
