*by Jorge López
Using available data to make decisions that result in financial gains is not necessarily new, but it will certainly guide the future of business relationships. So-called data monetization has immense potential to change the way companies profit, from collecting and analyzing data to improve customer relationships in order to understand consumption patterns, to creating partnerships to share that data. . It is important to highlight that the value derived from the data is closely related to the result of the analysis of the insights obtained. And the greater the amount of data collected, the more insights are gained.
The first point where data collection can enhance the efficiency of a business in the relationship with the customer and, consequently, generate financial gains, is in the marketing area. With efficient data analysis, it is possible to create insights that help us understand customer consumption patterns, why they buy a certain product and what is the preferred way to consume it. Among other factors, this helps companies understand which types of advertising work with certain demographics and which are ineffective.
Understanding these factors is essential to design efficient strategies, whether to determine which products should be put on sale or the best way to publicize these marketing campaigns, ascertaining the impacts on the customer. One way to “handle” this data would be, for example, to exchange the right of access to insights derived from customer data for discount coupons and promotions.
In addition to marketing, another industry that has a lot to gain from data monetization is retail. Analyzing customer data can determine which hours are busiest in stores, adapting employee hours to improve customer experiences, as well as determining the competitiveness of particular stores or products, whether by location or customer demographics. It is worth remembering that retail had a large increase in operating expenses during the pandemic, including costs that carried over to online and changes to physical stores.
It is important to point out that there are some questions that should be asked before starting a data analysis process that results in financial gains. First is whether we have the ability to collect and analyze this data. After all, what really has value are the insights that the analysis of this data provides us. Understanding how much “they are worth” — that is, how their use can bring financial return to the business — and who might be interested in the insights is essential to creating a monetization strategy.
Another central factor is to be aware if your company can collect data in a satisfactory and efficient way, because, often, companies have the data source, but do not have their integrated systems. This causes difficulties, particularly considering the importance of collecting and analyzing this data in real time in order to gain valuable insights faster. This systems integration can significantly increase the efficiency of collection and analysis, increasing the quality and speed of insights.
An example of the potential of data monetization for insights is the American credit company Equifax. By using TIBCO Spotfire software, the company was able to unify its customers' data sources in a single environment, not only making this data more accessible, but also facilitating its maintenance and bringing the banking environment closer to this type of operation. The insights taken from the database make the decisions of credit bureau companies safer, especially when we talk about lines of credit and the risks associated with these decisions.
Finally, there is no way to talk about this topic without associating it with the importance of ethics in the treatment of this information. Faithfully respecting the GDPR, being transparent with customers and being clear about the ways in which data will be collected, analyzed and shared should always come first. Only from this premise will it be possible to establish not only a strategy, but a culture of successful data monetization.
*Jorge López, Vice President of Sales at TIBCO in Latin America
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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