If you are like most of the online business these days, you are probably sitting on a huge amount of data. Also, chances are that you are looking for ways to monetize it. From the technology point of view the conditions are ripe:
However, as Frank van den Driest, Stan Sthanunathan, and Keith Weed noted in this Harvard Review article:
“… having troves of data is of little value in and of itself. What increasingly separates the winners from the losers is the ability to transform data into insights about consumers’ motivations and to turn those insights into strategy.”
In this article, we will this discuss 5 concrete ways to monetize your data. To succeed in monetizing your data, you must be prepared to put existing models and insights into competition with experiments. You should encourage continuous improvement and learning. You should start seeing data not as numbers but as a valuable asset.
Before jumping to the main subject, we would like to emphasize the iterative nature of the journey you will embark upon. Since the online ecosystem is changing with ever-increasing speed, this is not a one time approach. Best results for data monetization do not come from unique moments. Instead, they require a clear data-monetization strategy and continuous commitment.
It is the most obvious one but we think it is still worth mentioning it. The essence of collecting and analyzing your data is to make smarter market decisions. You should use actual data and avoid guesswork completely. In case you are not already doing it, you can start by creating better offers based on your visitor’s demographics, geographical location, buying patterns or browsing behavior.
Today, with the ever-increasing competition, it is more important than ever to get closer to your customers. Don’t fall into the same trap as many other businesses before and launch a website, install Google Analytics and then… do nothing. Use the data you are collecting to find out what your customers want before they ask for it. It is not the same thing to win a customer as to keep it.
A good approach is to target your offerings based on your customer’s major life events. Google offers you the possibility to engage with your potential customers around the following important milestones:
Even if these events are infrequent, they represent important shifts in customer behavior and usually correspond with major purchasing decisions.
If you are an online retailer we expect you to sell your products on a large number of channels. Besides your website, there is Amazon, eBay, and many other online marketplaces. Even if collecting data from all these channels is resource consuming, it can yield significant results. For example, let’s suppose that you spot significant price discrepancies. It can be either a sign of stolen goods or counterfeited merchandise. No matter which one is true if you care about your brand and your profit, this is a clear sign for you to take action.
One of the most important assets of an online business is the data captured from its website. A person visiting multiple times your website is more likely to convert. As we mentioned in one of our previous posts, a customer is expected to interact with your brand in various micro-moments before conversion. Retargeting is also a great way of keeping your brand alive in your customer’s mind.
Website clickstream is important but today it is only one piece of the puzzle. In order to win customers, you have to understand customer behavior across multiple channels and you should be able to analyze both data from your company as well as data provided by third parties. Moreover, by using data from multiple sources you could reach previously unserved customers and open new revenue streams by product cross-selling. Only by getting a holistic view of your customers and understanding how your customers act outside your store you will be able to get a competitive advantage in the digital economy.
It is easy to collect data but what matters is the ability to monetize it effectively.There are also challenges along the way, such as data-privacy and disputes on data ownership. To find solutions you will have to give it a thoughtful and gradual approach. We suggest a “start small” approach that allows you to be nimble and flexible as the business develops. Today, companies are at various stages in this journey, with different levels of capabilities. Those that are the most advanced are reaping the rewards.
We love your feedback and we’d be happy if you’d tell us which of the above techniques you are going to include in your future plans. Do you have another approach that is giving you results? We would also love to hear about it.