"Data is the new oil"
This expression by Clive Humby in 2006 relates to the most valuable resource in the world today, beating out oil, and it's data. Why is this concept being embraced by both small and large companies around the world? Because the data being referred to pertains to our customer's buying patterns.
Over a year ago, Amazon applied for a patent that pertains to their ability to use the data they collect about each of us so they can predict when we will need and/or desire certain products in the future. If our Prime account shows that we purchase detergent about every 4 months, Amazon will see this from their data analytics and can proactively send us a bottle without us ever having to tap or swipe a finger. I'm sure they will let us opt out of such a program or decide when they are wrong and return the product, but that's not the issue for now. What is of importance now is thinking about this example of a company mining their data about our buying patterns and using it to build the long term value of their company.
With this data mining example in mind, here are questions I encourage business owners and CEO's to think about:
1.) What data is your company gathering already about your customer buying patterns? Is this data helping you understand what they buy, when they buy, combinations of products they buy, even what they might return for refund, etc?
2.) Are you capturing your customer data in a manner that allows you to learn meaningful things from it? Capturing and storing of data isn't building enterprise value of your company unless you're using that data for helping to make strategic decisions.
3.) Do you capture any customer data that another company might find value in having? You might be capturing data about customer buying patterns that the original producer of that product might want to see so it can help them make their strategic decisions. Thinking in this way might afford you the opportunity to build a new revenue stream for your company.
4.) Are you using your customer purchasing patterns to help you better forecast your business, improve production and/or distribution efficiencies, bundle your products or services in new ways and even identify opportunities for adding complementary products or services?
5.) Ask yourself what key strategic decisions you have about your business and think about whether the data you're capturing (or could be capturing) is helping you make those decisions.
In this world today, each of us is someone else's value building data because every tap, click and swipe is being captured and those behaviors and patterns are being mined by some business for their benefit. It's time to start thinking about how the data your company is collecting (or should be collecting) and maintaining on your networks could be benefitting your business. Think about your data in a new way....and that is how can it start helping you build greater long term value and worth for you and your shareholders!
