We’ve all been collecting customer data for years. But here’s the hard truth: Data is meaningless without a comprehensive, organization-wide strategy to consistently leverage it into actionable insights. While we might know what our customers are buying and how they’re buying it, without connecting the dots to understand customers’ path to purchase, we can’t be sure how to engage them to purchase again. It’s data’s potential to move beyond the transaction and demystify the full customer journey that makes it extraordinarily valuable – and then, only if we can leverage it.
A solid and prescriptive data strategy can deliver the following business benefits:
- Increase revenue and drive down costs
- Solve complex business problems
- Drive customer insights and intimacy
- Lower business risks by predicting trends and customer behaviors
- Crystallize previously “invisible” emerging opportunities
- Support overall business strategy
Data Strategy Fuels Business Outcomes
It’s a compelling fact that is supported across industries: The future of business will belong to the companies who can effectively and efficiently harness and leverage their own proprietary data. Here is some compelling proof for you to consider in weighing your own pursuit of a comprehensive data strategy:Forrester’s Insights-Driven Businesses Set The Pace For Global Growth report defines these organizations as “insights-driven” and reports that they are “growing at an average of more than 30% annually and are on track to earn $1.8 trillion by 2021”. The report also notes that insight-driven organizations are growing 8X faster than the global GDP. Insights provide a distinct and enviable competitive advantage as these fast-growing companies use data, analytics, and software in continuously optimized loops to differentiate and compete in their markets.
The 2017 Data & Analytics Report by MIT Sloan Management Review confirms the Forrester research by revealing that the number of businesses deriving competitive advantage from analytics is rising – and fast. The report states that, “A growing number of companies are developing the tools and, increasingly, the skills to move beyond frustration. They are progressively able to access large pools of data and use analytics to inform decision making, improve day-to-day operations, and support the kinds of innovation that lead to strategic advantage and growth.”
As more and more companies cite data strategy as a competitive advantage, officers across the C-Suite also recognize the power of data. According to the Gartner CMO Spend Survey 2017-2018, of 13 marketing capabilities, CMOs allocated 9.2% of their total budget to data analytics last year, more than any other category, including website and digital advertising. CMOs are partnering with their CIO and CDO counterparts to invest in analytical proof that innovation and customer experience fuels the bottom line.
What exactly IS a good data strategy?
How to create a holistic data strategy: Seven steps
Now that we’ve made the case for putting a holistic data strategy in place, we will outline the journey forward. Each of these seven steps has depth and specifics that warrant their own discussion. We will share more in subsequent posts to help guide you through this seven-step journey, step-by-step.
Step 1: Justify the effort with your CEO/C-Suite. Since a data strategy is an organization-wide, sophisticated journey, creating a business case to justify that journey and investment is the first step. Your business case will use standard business case approaches blended with your unique customer needs, specific business goals and your business model. In addition to revenue and profit, what does your CEO and business care about and focus on for differentiation? Customer experience, innovation, quality, speed?
Step 2: Assess and map current state. Tactic number one is to map out the current state of data, the current needs and the in-place technology solutions. Understanding where data is collected, stored, analyzed and used will create a flowchart that is a critical foundation to knowing where to augment technology and processes or deconstruct and rebuild.
Step 3: Overlay business mission and goals, then identify gaps. Data strategy fuels the business mission and goals. Utilize your business strategy to articulate desired state, then apply it to the current state map. Now, you can more readily and clearly identify gaps in the current state and rank them in terms of importance and magnitude.
Step 4: Create roadmap. When you have identified business goals and roadblocks to achieving them, the next step is to create a future roadmap. This roadmap will show how data-driven insights will help enable the business to reach its’ desired goals.
Step 5: Gain financial approval. At this point, you’re ready to move forward with gaining financial support for your company’s new data strategy. Remember to start by presenting the big picture and explain how a solid data strategy will help to solve your business’ unique problems. Be ready to justify everything you’re asking for. Why do you need a new data management system when you already have one?
Step 6: Assemble the right team. Once the business case is justified, it’s time to get resources in place. A high-performing data strategy team should have three basic parts: technical data skills to build your pipelines, analytical skills to organize and transform the data into insights, and business skills to guide and transform analytics into strategy tied to business results.
Step 7: Implement in phases. You will implement your new data strategy in a crawl-walk-run approach, starting with educating everyone at your company about the new strategy and why it’s important. Change is challenging, thus the more you outline exactly what you plan to do and how we plan to do it, the better. Next, go for some easy wins or “low-hanging fruit” to boost support of the new strategy before you begin to scale broader-based implementation.
How to get started
The companies that are empowering their data teams to look beyond their department to embrace top-down business strategy are the ones effectively leveraging a data strategy to deeply understand their customers and in turn, increase revenue, drive down costs, and decrease risk. These companies are efficiently leveraging data across every department to impact nearly every business decision and are positioned to sustain competitive advantage in the years to come. The time to begin your own holistic data strategy journey is now. Next, we’ll dive deeper into Step 1 of your journey and begin to outline how to justify the effort with your CEO and C-Suite.