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Four ways to monetise your firm’s data

Nancy Fouts

Your firm already amasses facts and figures from your customers as part of your daily operations. The majority of this potentially valuable data ends up being hoarded – but it can pay handsome rewards if you make best use of it, according to Barbara H Wixom and Jeanne W Ross, writing for MIT Sloan Management Review.

The first step is to identify which monetising method could be most appropriate for your business and then work out how to apply it. Here are some initial considerations Wixom and Ross recommend to help you make your ideas work:

1) Examine how you process your information. Data is at its most powerful when it’s analysed and put into the hands of the right people. Employees who have the closest links with customers, product development and production processes can use the information gleaned to improve decision making and operations.

“With data-based insights and clear decision rules, people can deliver more meaningful services, better assess and address customer demands, and optimise production,” say the research scientists from the MIT Center for Information Systems Research.

They cite the example of Microsoft Corp, where teams used supplied data and analytics about their corporate customers’ buying habits – and any problems reported – to predict the likelihood of solid sales from opportunities offered. This ultimately created 15% more accurate forecasts, leading to better management of sales systems.

2) Enrich your offer with data and analytics. It’s known as “wrapping”; essentially it’s about adding value for customers – giving them data-led solutions to overcome problems and enhance overall experience.

FedEx clocked on to this phenomenon early on by providing free online parcel tracking back in the 1990s; now wrapping is being effectively harnessed in virtually every industry.

The trick is to identify what customers want, and how data could answer that need.

Wixom and Ross warn that if you do use “wrapping”, it’s essential to go for quality data and sophisticated analysis – or you could risk damaging your reputation.

“Doing so requires comparable levels of scrutiny and control. Most companies don’t manage and cannot deliver data and analytics in this way. In fact, exposing data to customers could reveal quality problems.”

3) Fine tune your data if you want it to sell. Some people see facts and figures as an easy commodity to market, but Wixom and Ross disagree. They say that successfully peddling your data is dependent on using a business model that most firms aren’t equipped for.

Recognising that their data wasn’t ready to make money, financial services company State Street set up a new division called Global Exchange specifically to work in tandem and share customers.

“Executives secured permission from 3,000 private equity clients to aggregate and anonymise that data – and then created an index that conveyed the financial performance of the private equity industry.”

4) Choose an accountable person to focus on monetising data. Be sure to identify a strong process leader who can design a strategy and direct teams on how to work with data and its useful analysis.

It takes more than a one-off flash of brilliance to translate data into revenue. But give it time, commitment, energy and a focused outlook and you could reap rich rewards.

Source Article: How to Monetize Your Data
Author(s): Barbara H Wixom and Jeanne W Ross