In today’s information economy, data is digital gold.
Modern companies are swimming in a whole sea of this precious asset, which is unprecedented in history. The benefits of such a position are multi-fold.
Data paves the way to sound business decisions and better products/services. Moreover, tech giants like Facebook and Google show us the immense potential of selling data. They generate a lion’s share of their profits from it.
But, there’s a flip side to it, a truth not all organizations realize.
Merely hoarding data doesn’t yield results. You have to employ active data monetization measures to get anywhere. And this is no afterthought you can come up with at the last minute.
Monetization requires thorough planning, smart strategizing, and ample investment. That’s the only way to turn strings of information into money.
So, here are some avenues to explore in order to enhance your bottom line.
Data Monetization in a Nutshell
Data is the hottest of commodities.
A handful of modern market leaders sit on plentiful deposits of it. But, the truth is most of the data is downright useless in its raw format.
More headaches come in the form of two hurdles to monetization: accessibility and quality.
Most companies fail to overcome the latter. They collect a lot of points that are either marginally important or don’t forward business processes and strategies. These mistakes are often due to lack of skills, corporate culture, clear vision, and knowledge.
The second burning issue is accountability. Companies must possess competent leadership able to enforce policies and entice employees to follow best practices. Investment in fancy tech infrastructure helps, but it doesn’t solve these obstacles.
Therefore, you have to step up your game in more than one department. Monetization calls for organizational changes and data management improvements.
After that is sorted out, you can look for the right technologies and big data tools, such as machine learning, artificial intelligence (AI), and predictive analytics. Check out this software company offering AI-powered analytics solutions to see what we’re talking about.
So, it all starts with the fine-tuning of internal processes.
This initial stage revolves around immediate steps that boost your decision-making and create operational efficiencies. Both goals require you to supply the right people with relevant data and suitable software tools.
When we say people we mean either decision-makers or employees closest to actual work process.
They all must rely on facts and figures daily, instead of acting on a hunch. Thus, establish delivery mechanisms and optimal data presentation formats.
Furthermore, identify data points that help you meet your objectives. Derive actionable insights and make them readily available to your staff. Evaluate performance based on pertinent data and performance indicators.
Constantly elevate your information capabilities and work on bolstering them. Pinpoint areas where you’re overspending or leaking money to achieve savings.
Speaking of which, let’s not forget monetization also ties into productivity. Manually searching for leads and data are time-devouring activities you can now leave behind.
Apart from this, internal monetization enables you to improve the quality of service and delight consumers. Increased performance of salespeople certainly has a financial value attached to it, doesn’t it?
The Art of Wrapping Data
The next key step is tying data to your offerings, which is a technique also known as “wrapping”.
In other words, you have to find ways to weave data-related value into products, services, and customer experiences. That way, you’re able to keep up the pace with shifting consumer preferences.
The good news is the basic idea is simple; you aim to discover consumer problems and then use data to solve them. Strong product leaders are supposed to oversee implementation, as well as testing of product hypotheses.
For example, let’s say you provide an online service. With ample data to work with, you could integrate new features like reporting, alerts, recommendations, and push notifications. These additions alleviate friction and pain points along the customer journey.
Another concrete example would be using heat maps to figure out how customers interact with your digital real estate. Namely, you can see exactly how many people click and where. This method is excellent for discovering user experience (UX) faults and personalizing marketing.
Main benefits you stand to reap are higher customer satisfaction, retention, and loyalty. From them also stem greater sale volumes and profit.
Selling off Data
Finally, there’s a possibility to sell information to new and established markets.
This strategy is based on the presumption that data contains an inherent value. This presumption does ring true, but not in all instances and use cases. No data is automatically subject to monetization.
In fact, we would argue this is the most difficult monetization endeavor. First off, you need to have an appropriate business model in place. Ideally, this document is focused on data that isn’t publically available and supports information on business operations.
Another problem is linked to navigating the minefield of privacy and data integrity concerns. Like it or not, it’s a good idea to remain ethical and transparent about your data practices.
With policy overhauls such as GDPR, you have to go a step further— obtain explicit consent to process, share, and sell someone’s data. Shy of that, you’re traversing into illegal and non-compliance territory.
This brings us to the point that launching an information company takes time and resources. It’s not always an optimal strategy either. Success comes down to the balance between the risks, revenue potential, and costs of providing data.
That’s the equation behind calculating whether selling data pays off or not.
It’s Time to Choose Your Path
In this day and age, data monetization is the name of the game.
To harness its power, commit to creating a comprehensive strategy. Make an effort to use monetization as an extension of your existing management practices.
Moving on, determine what kind of data has value for you, as well as your customers and stakeholders. Do this early on to prevent problems ensuing down the road.
While at it, raise the bar when it comes to scrutiny and control. Tool up and optimize your systems and processes according to quality and accountability standards. Analyze the outcomes and improve them as you go.
Following these steps, you should be able to strengthen your organization from within and hit it big. If you enjoyed this article remember to check out our business section to find more useful tips for taking operations to the next level.