Why data is the new oil
In 2019 it’s widely accepted that data is essential to fuel growth for businesses of all sizes and across all sectors, disciplines, markets and territories.
Many business commentators talk about data as the new oil. And yet, while data is hardly a scarce resource, businesses must mine for it in the right places or they’ll emerge with little to show for their efforts, while the extraction process itself can be expensive and time-consuming to undertake.
Others refer to data as a modern business ‘currency’, yet throughout history the worth and value of different currencies has varied wildly. Just as any business right now would rather be holding onto US dollars than the Venezuelan Bolivar, so too must businesses seek out the data that holds the real value.
Furthermore, gathering and analysing the data is only half of the battle. Oil gets consumed; currency is spent; data expires as the world around us changes. Trends evolve, attitudes and behaviours shift, and all of a sudden the businesses and brands that are still harnessing old data sources are left behind.
Ultimately, creating and deploying a successful data-driven growth strategy is something that most businesses talk about but few genuinely achieve in the long-term, a problem that is largely the result of their failure to seek out renewable data sources that they can tap again and again as people, societies and markets continue to evolve. So here are a few tips to guide them on their journey to a more effective, more sustainable strategy.
1) Pay close attention
We all know that consumer trends move faster than ever before, so why is it that organisations still adopt the same data acquisition practices that they relied upon decades ago?
They buy industry reports of variable quality and questionable methodology in order to support decisions they’ve already taken; they commission one-off studies and use these insights to inform multi-year business plans.
This was never a particularly efficient way to operate, but as competition has increased across practically all markets, it is now a strategy for rapidly being left-behind by more agile organisations. Brands that want to avoid having their lunch eaten by younger, more nimble competitors, must be consumer-obsessed. This means making relevant, high quality data available on tap - across the whole organisation - so that the decisions being taken are no longer being informed by yesterday’s news.
2) Find data that the competition doesn’t have
Data merchants and peddlers exist everywhere these days. They scrape social media channels, mine search engine insights or amalgamate other people’s data and claim it as their own. These insights, while far from worthless, are available to anyone that stumps up the cash. They are non-proprietary and thus, they hold no inherent competitive advantage. You’re thus relying on the hope that your data analysts turn out to be far better than those of the competition - a risky bet.
Businesses need to use data to determine a winning point of brand differentiation, and that means gathering their own insights from consumer research built specifically with their brand, their audience, their competitors in mind. This type of privileged insight, when combined with other external data sources, will fast-track your ability to form broader, genuinely unique insights about your audiences and target markets, secure in the knowledge that these conclusions are informed by data that the competition doesn’t have.
3) Understand your field of vision
In today’s global economy, strong growth must continue in perpetuity. A study of 3,000 software businesses by McKinsey found that 92% of those with annualised growth rates under 20% were likely to not exist within a few years.
Achieving this sustained rate of growth means continued evolution and innovation, redefining your market opportunity as you go. Of course, no firm is omniscient and this means that every prospective new opportunity will have a ‘missing’ data set that must be sought out before it can be properly evaluated.
The biggest mistake that successful data-driven organisations make is failing to understand their current field of vision at any given moment, that is to say, believing that their current market and customer knowledge is sufficient to embark on a new opportunity or strategic pivot.
Instead, the pursuit of consumer data from outside your organisation should be a ‘holy grail’ quest, with firms forever pursuing new insights into future target audiences.
4) Make data available to everyone
Historically, some internal teams have been data-rich - generally because they have actually held budgets for data acquisition - while others have relied upon their distant colleagues to ask the right questions on their behalf and share the insights with them at their leisure. Again, this was never an efficient way to operate; going forwards, it will be wholly insufficient to meet the required pace of business evolution.
The most successful businesses of the next decade will be the ones that extend data-driven decision making across the entire enterprise - from sales and marketing to R&D and customer service - so that rich consumer insights are accessible to anyone who needs it, whenever they need it.