The world of “Big Data” has become a very interesting place. As companies large and small mine their data repositories for new insights, a number of new and exciting opportunities are becoming apparent. One opportunity that is too often overlooked is the fact that “Big Data” offers not only a new source of valuable insights for the company that owns the data — but it can also offer valuable insights to the company’s customers and prospects.
How does this work? Companies typically store transaction data from interactions with each of their customers in a database. This information has value and is therefore referred to as a data asset. Yet, access and use of this data asset is rarely provided to parties outside the company (such as customers, prospects and suppliers).
For example, if I sell an accounting system in a software-as-a-service model, I see as a by-product of delivering my service the individual financial transactions of my customers. Both the individual transactions and the identities of every customer are kept strictly confidential and are never disclosed. However, my database is rich with information that, when used in an aggregated and anonymized manner, could help me to identify valuable usage patterns among my best customers. That, in turn, can help me do a better job in targeting my prospects.
Furthering this concept, I may discover that companies with large physical inventories are better customers for me than companies that have no physical inventory. Armed with this knowledge, I will focus my future marketing efforts on prospects with large inventories. I will repeat this targeting analysis to continually refine my prospect universe– using my aggregated transaction data to refine my business decisioning.
Extending this approach one step further, I may decide to use this aggregated transaction data to provide a new decisioning resource to all of my customers. For example, I might be able to help one of my best customers determine that the number of days outstanding for their receivables was 10 days longer than the norm for businesses similar to theirs.So while my customer may have thought they were doing a great job on collections, my aggregated data could show them that they are, in fact, below the norm. This would be an insight that my customer could not derive from their data alone.
As a result, offering data from internal operations to outsiders (syndication) offers a large number of new and valuable insights. These insights, when made available to your customer base become a key advantage of why a customer should do business with you and not your competitors. We call this approach “Collaborative Big Data.” It is going to become a significant competitive advantage for companies that embrace it.
Employing data in this manner can create a valuable new revenue stream for the company that owns the aggregated data. Not only does this approach create a competitive advantage for the firm, it can produce significant high-margin revenue. Potentially, you can charge your current customers for access to this unique and valuable decisioning data. In addition, there may be totally independent new markets that may want access to this new Collaborative Data asset and be willing to pay a premium price. It is an exciting process for every company to examine its transaction data and ask the question: “Can I provide unique and valuable insights to my customers and others?” If so, you are well on your way to a new, high-margin revenue stream.
One last but very important point is that all this must be done the right way, making the privacy concerns of all involved paramount. More importantly, the approach must be compatible with the company’s core business. It’s irresponsible to try to make money on the backs of our customers. Instead, this offers a way to deliver them added value.
We need to develop applications that benefit our customers. The first rule for Dr. Data is to do no harm.
-Dr. Charles Stryker