There are many suggesting that there is a simple method to guarantee success when using data to drive business decisions. This typically involves accessing a unique and untapped 1st party data source. The emergence of 1st, 2nd, 3rd and now zero party data has seen discussion focus too much on the ‘classification’ of the data used, and less about the methods to maximise successful utilisation.
Using data to improve decision making is a powerful way to improve business outcomes. But too often we are told that accessing this power can be reduced to a simplistic choice regarding its source. 1st party data has ascended the throne amidst claims of all conquering data superiority. And so, the abundance and promotion of 1st party data continues unabated. But this perceived superiority doesn’t guarantee powerful actionable insights, nor does it guarantee a successful implementation. Effective deployment of data-driven insights requires the right combination of data sources and having the tools to empower its use.
Despite the best intentions, without a plan and the right toolkit, attempts to enable data-driven success rely on more than just the raw ingredients. There are other crucial elements to consider when assessing all available data sources and their likelihood to drive successful business outcomes:
- Remember the mission: It is essential to understand the exact business need that will be addressed in order to determine a data sources likely impact.
- The right scale and scope: Recognising the scope of how data will be used is vital when assessing a data sources suitability for your business needs.
- The right tools: Does your business have the right skills and capability to turn data insights into actionable outcomes?
- Use responsibly: It is crucial to consider the privacy implications when assessing a potential data source.
Effective and efficient ways to deploy consumer insights at scale requires dexterous planning, assessment and use of data sources and choosing the right tools.
Remember the mission
It is crucial that the data used to drive successful outcomes should be aligned with the purpose that you are trying to achieve. There are many applications that can benefit from the use of powerful data driven insights. For companies aiming to maximise the returns realised from the use of data. To put it more simply, without the right ingredients, even the most talented chef will struggle to create a tasty meal.
No matter how appealing a potential new source of data may be, there are questions to ask first in order to assess its fit for purpose:
- What attributes are needed to implement new data driven solutions within the current systems in place?
- Is the focus of the activity on the existing customer experience or attracting new customers and does the potential data source represent the target audience?
- What communication channels will be most effective and efficient and does this data facilitate this communication?
- How will the success of the data-driven strategy be measured?
- How will the data insights be applied and executed on effectively?
Successful use of data is often less about the technical specifications (how much and how detailed is the data) and much more about its ability to address these strategic fundamental questions.
The right scale and scope
It is always imperative to consider the scale and scope of the potential application of any data driven exercise. For example, the power of using data driven targeted marketing is not necessarily just in 1-to-1 personalisation, but also through generating exposure to a well targeted, yet sizable audience. Successful marketing and advertising come from having large numbers of people familiar with your product and it being top of mind when considering purchases. In order to attain this goal, data driven marketers rely a vast reserve of data – more often than not, at a scale that 1st party data is unable to deliver.
That of course does not imply that one data type is better than another. But it does address the importance of matching the scale of the business need to the data application. Once this is fully understood, the assessment of the scale of the data source compared to its intended application can be conducted.
Choose the right tools
The suggestion that by using a particular data type (or data source) to drive business outcomes is the recipe for success ignores the other equally important influences.To extract the maximum benefits from any category of data the focus be on better understanding and meeting a consumer need and then constructing a solution that will best meet their needs.
There are important considerations in conjunction with the source category, that will help maximise return on investment for any new data acquisition:
- 3rd party models and segmentations: typically, these are distillations of complex and powerful attributes and behaviours that can be used to predict in the absence of actual observation data. These are powerful additions to any data source that can enhance or even replace some behavioural characteristics. It is important to not just consider available data sources in isolation but to understand the value that could be extracted when used in ‘concert’ with other data sources and tools.
- Technology: covering the full gamut of capability from build through to execution (hardware, software and talent) it is crucial to assess your capability to extract the full benefit, regardless of data source.
It would seem inevitable that consumers expectations on the services they are provided (that will rely on using their personal data) will continue to grow. And with that will grow the expectation that businesses will protect their data. It will become an essential component of business success to use data in a trustworthy way to deliver a better outcome for consumers.
In some cases there may be other sources of insight such as market segmentations and propensity models allowing you to maximise the effectiveness of data driven activity while minimising the risk of compromising consumer privacy.
It’s unlikely there is a single key nor is there a ‘magic’ type of data that will guarantee successful outcomes. The interaction between vital ingredients will prove to be key to unlocking data-driven success. The claims that using a certain classification of data is the most important factor in success are seemingly blinkered from the other important factors that contribute to successful outcomes.
Using data effectively has become an essential component of business success and it is a mistake to believe that the source of that data alone can make the difference. Disregarding other readily available data sources and methods hinders the ability for businesses to be adaptable and effective in meeting their customer’s needs.