Data Analytics: Extracting Value from the “Data Pandemic” – Material
Across Australia, closures, circuit breakers and restrictions have forced many businesses to adapt to new ways of doing business to keep their heads above water.
For many, this has meant digitizing traditional business models, going online, and accelerating the adoption of technology to engage customers and compensate for the lack of foot traffic or the ability to be present.
New digital super apps and markets have allowed local businesses or small businesses to leap forward, alongside more established and digitally savvy businesses. This has created new opportunities for business growth and monetization across the economy, because we know that where there is technology, there is data; and where there is data, there is what is now increasingly recognized as “intangible value”.
This data varies from company to company, but can almost always be worth something as a strategic asset. Data types may include customer data, such as personal, demographic, and operational information detailing how customers use your product or service and interact with your brand, as well as sales or marketing data that tracks activity. online and potential buying behavior.
As businesses integrate digital platforms and channels to adapt to new market dynamics, where you are more likely to engage a customer online than in person, they will generate new intangibles. The challenge for businesses is to figure out how to use these growing amounts of data in a way that generates value, and then assess how best to protect it once its value is established.
Australian businesses have the opportunity to open new doors by monetizing their data and creating opportunity and value where they did not exist before. The starting point is to create a business case that allows a business to determine the potential economic return for each data asset it has in its appropriate business context.
By properly building and analyzing each business case, it is possible to determine the best way to use the data and understand its potential value. This business case-driven approach allows business owners to determine the potential returns and investment required for any potential risk associated with extracting value from that data.
It is a process that can be rewarded. Take, for example, a mall owner we worked with recently, where we identified 19 different end-use cases for their data and several business cases for the data set.
Here, we used a proprietary three-factor model that takes into consideration the available datasets, the data collection methods, and the main possible use cases in which the data would generate revenue.
We then estimated the overall value of that data, along with the potential costs and risks and return on investment (ROI) required to successfully monetize that data. This analysis of the quantitative data and its contextual and qualitative factors helped us identify opportunities such as connecting retailers with the mall’s gift card program more significantly to increase ROI.
In another example, the mall owner is now able to use their parking data and store traffic data to estimate the number of users who enjoy the parking benefits offered by the mall. In addition, data on foot traffic patterns could be digitized to demonstrate to potential tenants the importance of strategic store locations and layouts.
The mall owner now has the insight to inform new business opportunities to balance the impact of changing consumer behaviors created by the pandemic. Rich data allowed the company to gain insight and the mall can now be seen as a generator of intangible value as well as a traditional tangible commercial real estate asset.
The lesson here is that even the most traditional businesses should plan to discover, manage, and protect their latent or emerging intangible assets, especially as they embrace more data-generating technologies.
And if you’re starting a business today, it’s critical to understand what data and information you have that you could potentially capture, and how it can be monetized to increase the value of your business over time.
The generation of intangibles goes beyond data. For many successful businesses, it’s the things they do differently that become the intangibles that create lasting value – from revenue to systems and processes to branding and culture, and even service – and that create and maintain profitability over time.
This is what sets the mega fast food chains apart from your local cafe or standalone burger restaurant. Not everyone pretends to be a global multinational, but if you are starting a business it is increasingly important to have a plan on how to identify, develop and manage your intangibles, because it is probably there that at least 90% of the value of your business is going to be.
Companies that understand the value of data, as well as the differences that create market share, will be best positioned to thrive in a changing marketplace. While intangibles are often referred to in the context of large companies and start-ups, it is important to note that the principles also apply to traditional or local businesses and, where there are data and differences, there are intangibles and value.