Data is precious information for any company. But without a strategy to acquire, analyse and optimise this data, you’re missing out on opportunities to bring more revenue to your business.
You probably already collect some type of customer data from your website or app, so how do you harness this information?
In this article, we look at the options to use data to understand your customers’ behaviour and monetize this data through effective methods that work for your business model.
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There are two main methods to monetize your data and analytics. Depending on your business model and objectives, you can look into direct or indirect data monetization.
With consumers demanding more privacy and power over their personal data, there have been considerable changes in the way customer data is collected. Consent and transparency must be at the heart of your data strategy.
You will need to get customer buy-in to collect much of the data that you need. It’s important to consider how you can encourage customers to accept and continue using your business.
You can consider offering some kind of value in exchange, such as discounts or promos to encourage the use of a loyalty app or tracking features. Additionally, you need to be fully transparent with what data you’re collecting and how it will be used. Customers are usually delighted to use loyalty apps as long as you’re honest, and there is real value in doing so for them.
Direct data monetization consists in selling your data to third parties. This data can be raw or cleaned and anonymized before being passed on to interested parties.
An example would be an eCommerce website that would open up data to suppliers through dashboards or drill-down graphs. That way, suppliers can understand which products are doing well, what type of customers are buying their products, and even what products from other suppliers similar customers are buying.
Be cautious, you don’t want to ruin your relationship with existing customers by selling their data to other businesses without their consent or attempting to gather data behind their back.
Your reputation as a business can be heavily impacted, and your data strategy should put transparency and customer data protection first. Doing so, you’ll have better buy-in from your customers who trust that you will handle their data appropriately and as expected.
Indirect data monetization consists in using data at the core of your business strategy. In this model, data drives the direction of your business and your future products and services. Analytics can help you understand what works and brings revenue, and what doesn’t.
It can help answer critical questions such as:
Most modern businesses understand that it’s critical to leverage data in order to discover opportunities for revenue growth. Your business model and objectives will determine the best data strategy to implement for your business, but down the line, everyone can benefit from data-based optimization.
Faster and intelligent decision-making
The success of any company today is heavily impacted by the speed of decision-making in highly competitive environments. With easy access to critical information, you can take decisions for your business in an informed and confident manner.
With proper data analysis, you have a better understanding of your market and target customer base. You can use this information to draw in more customers but also make sure your existing clients remain satisfied.
You may have a full range of customers based on your data, but if you dig further into it, you’re likely to find different segments of customers that provide more and ongoing revenue for your business.
You’ll be able to understand who your customers are, which are spending the most money, and what products or services they’re most interested in or not interested in. This allows you to decide on where to focus your efforts as a business.
Data monetization doesn’t always involve customer behavior analysis. The first way you should be using your data is to optimise your own internal processes.
Data-based optimization consists in collecting information and analysing internal practices to reveal insights into what is working and what isn’t adding to your revenue. The final objective is to improve your overall business performance.
Any modern business should be using this approach to ensure that money and human resources are allocated to the appropriate activities. It also ensures that your business is running at optimal performance in all areas. You need data rather than intuition to grow as a business in the modern world.
We work with businesses around the globe to help them make the most of their data and grow revenue. If you’re looking for a solid partner with experience in implementing a data strategy, contact the Mowgli team for a one-to-one audit.
