by Stuart Ridgway, Original Music for Film and Television
Is your brain whirring yet? In Part 1, I covered the many ways you can use your data to improve your customers’ experience and to connect with other companies that complement your offerings – all in the name of expanding your business.
If you’re still not convinced, keep in mind that the whole of all your combined data sets is much greater than the sum of the parts. The trick is to open the right data you have running through each of your systems, extract it, and draw insights from the various correlations you make.
Let’s see where mashing your data in different ways can exponentially improve your business processes.
Slice and Dice Your Wealth of Data
Most likely you’re tracking each customer’s demographics – gender, age/generation, ethnicity, disability, location, and prowess with technology – to identify connections between these factors and your customers’ buying habits. Are your marketing dollars being spent in the right place? Good for you.
The next step is to track how sales within each demographic correspond with leading indicators in other industries. An increase in cardboard demand forecasts more goods about to be shipped. Tougher economic times result in fewer haircuts. What trend, when mapped to your customers’ demographics, can help you determine how best to sell to them?
Tracking new customers is even more compelling. Take your demographics, your leading indicators, and correlate them with data from your ad campaigns, referrals, changes in season, and spikes within your industry. How has that affected your ability to attract new business?
If you compared your marketing campaigns and referrals against various slices of your new customers’ demographics what would you learn? Do you see an increase in new customers at certain times of the year? When are you losing customers? Do your sales correlate to changes in your industry or did you buck the trends? How well have your competitors fared? Do your leading indicators still ring true?
Now, add to that the trends you see in your supply chain. Track your suppliers’ history (price, availability, reliability) and see how they correlate to all of the data you track plus your upcoming demand. It sounds like it might get complicated fast, but remember, you don’t have to look at all of the data at once. You can choose what slices make sense, make your predictions, and see if you’re tracking the right trends.
Once you can see a holistic picture of the ebbs and flows of your sales over time, you are in much more control of your company’s future. Spend more marketing dollars where you see strengths and opportunities, and fewer dollars where they’re not panning out. Tighten up your shop when you see a famine coming and ramp up production to prepare for the feast. Spot the indicators that tell you a customer is about to abandon you and court them back. Determine the optimal time to try out that Groupon experiment. This is how you exploit data to improve your prospects.
One of my favorite ways to leverage data is the A/B comparison. Have you tested your product’s packaging? Try two different ways to package it (package A and package B), track them in parallel, and see which one sells better. Have you tested different ways to market your services? Try two distinct strategies, track the source of every sale, and see which strategy pays better dividends.
When is the best time to roll out a new version of your product? Apple releases a new iPhone once a year: the new model shows up on even years, and the “S” model shows up on odd years. Why? Apple looks at tons of data internally and externally to determine the best time to maximize sales.
They also know that two years is about the length of time for customers to become disenchanted with their phone, skip the next model, and leapfrog to the newest. Finally, they know that the typical mobile plan is two years so the telcos will be rolling out incentives to keep customers buying new Apple’s phones.
You’re not necessarily selling high tech hardware, but you are selling products and services that have a lifespan. Track data from your sales histories, your customer demographics, your supply chain, and your inventory. Try various release cycles. Experiment with different ways of mashing the data to find the optimal time for upgrading your offering and maximizing future sales.
Start Opening Your Data
By now your head should be spinning. But not so much that you won’t ask the obvious questions: how do I open my data and how do I mash it up? I’ll be talking about this in more detail in an upcoming article, but here are the salient points you should know:
- You want to access your data in some sort of structured way.
- If you save your data in an information system you’re halfway there.
- Most information systems give you a way to pull out the right structured data that you need.
- The data can be as fancy as a full-blown application program interface (aka API) or as simple as a CSV file.
- Once you’ve opened your data, there are data visualization tools that you can customize to help you mash it the way you want.
As I said, this topic is large enough for another article or two. Nevertheless, get started imagining what your data can do for you once you open it. What gold are you sitting on? How can it be your most valuable asset? How can you exploit it to make your company soar?
Gripe and Punishment
Stuart Ridgway composes original music for film and television. You can find out more about his music and the Emmy Award winning television shows he works on at Pyramid Digital Productions, Inc.