First, don’t waste! How to use data in business and marketing?
Each company generates a huge amount of data. Using this data thoughtfully can significantly improve the performance of your organization. This article will teach you how to map data, introduce space for communication and feedbacks, how to approach research on alternative ways to use data (e.g. ROI) and eventually, how to ensure data transparency.
All of the above mentioned areas contribute to the introduction of data culture to the organization. It’s the appropriate attitude of employees within the organization that allows for data to influence more thoughtful strategic and sales decisions or even those related to work culture.
Below you will find answers to the following questions, for example:
- How does Ikea map their data and why do they do that?
- What’s the formula behind using data in business?
- Why should you start introducing data culture from now on?
On a daily basis, I have the opportunity to work in two organizations that really do the right thing about data culture. In the first one, I deal with UX research and strategy development, and in the second one, along with my team, I develop a smart stylist, a product based on Artificial Intelligence. As the matter of data is extremely close to my heart, I would like to present it a little bit more in the marketing and business context.
How can you use your data?
Using data in various companies – case studies
Let’s start with 3 short stories from totally unrelated companies, all of which really happened. Each of them shows very clearly how using supposedly non-existent or irrelevant data may have a huge impact on different processes in an organization.
Data vs. sales
We are probably all aware that the sounds around us have a direct impact on our behavior. Research on the correlation between music tempo and people’s actions has already been done in the 80s. It turned out that the faster the music, the faster we move around the store and leave it. Slow music intensifies the crowding and causes slight traffic jams, yet those who spend more time in the store are more likely to decide on an extra product. Thus, we encounter energetic music in fast foods.
In my opinion, one of the most interesting studies of the influence of sounds on sales was a study aimed at investigating the influence of in-store music on the purchase of a particular type of wine (North, Hargreaves, & McKendrick 1997). It turned out that when consumers heard French music in a store, they decided 5 times more often to buy French wine instead of German. When German music played in the same store, German wine was bought twice as often as French.
Data vs. strategic decisions
Simon Beaumont is the global head of the “Centre of Excellence” at Jones Lang LaSalle. The “Centre of Excellence” is considered a part of the organization dealing with scientific activities and development processes of modern technologies at the top global level in a specific industry, e.g. finance and accounting or, as in this case, real estate.
This company rents and manages real estate worldwide. It not only uses the data to estimate the value of the property or to plan the building conservation accordingly. The company explores the cities where there are the largest number of programmers and developers in the world or in a specific country and where the largest number of them are currently studying. With this knowledge, the company decides whether or not to build and open a new office building in a particular city.
Data vs. work culture
Why do some team members always show up early, some are just on time and some are chronically late? And how can an employer influence this other than speaking to employees?
As it turned out in a study by an American construction company, the number of parking spaces has a direct impact on employees being late. The fewer of these, the earlier the employees arrive to occupy “their” place. This reduces the number of delays.
Formula for using data in business
And even though each of these three stories sounds like a regular trivia, they all share a very specific cause-effect chain. We could say that this is a simple formula for using data which exist in the organization.
In each of the cases, it was necessary to perform analyses based on data that already existed, although they may never have been saved or considered relevant. Each of them has their own measurable effect. And finally, each of them led to a change in the organization. The data collected and the analyses carried out contributed to decisions that may have seemed stupid or unintuitive. Decisions that clearly increased optimization in certain areas. The speed of purchasing leased space, increased sales, reduced number of delays.
This brings us some clear equation:
Analiza – Analysis
Kształcenie developerów a sprzedaż przestrzeni biurowej – Educating developers vs. selling office space
Liczba sprzedawanych win a rodzaj muzyki w tle – Number of wines sold vs. type of music in the background
Liczba spóźnień a liczba miejsc parkingowych – Number of delays vs. number of parking spaces
Eksperyment – Experiment
Zbadanie korelacji bazując np. na danych historycznych lub na danych konkurencji – Investigating correlations based, for example, on historical or competition data
Ustalenie dni, w których włączamy tylko ten typ muzyki – Selecting the days when only this type of music is on
Zamknięcie kilku miejsc parkingowych – Closing down several parking spaces
Pomiar – Measurement
Czas od rozpoczęcia działań sprzedażowych do wynajmu powierzchni – The time from the beginning of sales activities to the lease of space
Liczba sprzedanych win danego typu – Number of wines sold per type
Liczba spóźnień – Number of delays
Zmiana w organizacji, wybór innych miast niż standardowo – Change in organization, choosing other cities than usual
Zmiana w organizacji, wpływanie na sprzedaż poprzez budżet – Change in organization, influencing sales through budget
Zmiana w organizacji, biuro z mniejszym parkingiem – Change in organization, office with a smaller parking lot
Data, or rather their collection and analysis, conducting a measured experiment to confirm our hypotheses and a clear call to action for company change can significantly affect our performance. Our internal and sales processes. However, putting this equation into practice means a major change for the whole organization. It means introducing Culture of Data into the company.
Culture of data
Even though we may associate the very concept of data collection with marketing automation tools such as Google Analytics, the introduction of culture of data doesn’t require any new software. It’s about much more than just software, it’s about the way people in an organization think.
What is this “culture of data” that I translate literally?
We say that culture of data is an environment that uses a consistent approach to decision-making process based on evidence in the form of data, data regarding feelings and experiences. We stop following feelings.
Data culture is basically a tool for decision making.
What does culture of data require from an organization?
The team where we want to introduce culture of data must look up to the CEO or the board. Turn the concept into actions. What actions? Below you can find 4 key actions you need to take in order to introduce data culture in your organization.
Mapping of data and detecting gaps where the information is missing.
Most of you, probably, collect information about customer satisfaction after cooperation, after using your product or service. But have you ever thought about grouping and mapping this data in order to draw conclusions for the overall customer experience? These data should be examined and mapped not only at the end, but at various “checkpoints”, key moments of cooperation with the client as well.
Do you guys remember those racks maybe? It’s such a characteristic, very friendly tool for expressing your opinion in Ikea.
A very suitable example of data mapping and gap detection is Ikea’s Customer Journey Map. Here is a customized Customer Journey Map, used to mark the emotional states we go through as Ikea customers.
How is your experience at Ikea stores?
It all starts when you arrive at the store on a Saturday afternoon. You’re quite satisfied, until you start looking for a free parking space. Your satisfaction then drops to a neutral level. You enter the store and see some great decorations — which has a positive effect on your reception, then the bags or carts that don’t impress you anymore, until you finally start taking a ride around the store — which is not a pleasure itself. However, you are very satisfied with the quality of products, a little less with the prices, a little more with the way the products are displayed or the possibilities of using them in a sample children’s bedroom. Our experience with marked directions and departments is a little less enjoyable, until… we confront customer service. Neutral towards bad. From a feeling of gratification, we drop to an almost bad experience. We call this leap “Pain-Pleasure Gap.” From that moment on, our task is to make our client satisfied again. To make him want to come back to us.
What does Ikea do to make you want to return?
Our next steps in Ikea? The bathroom, well maintained, a children’s playroom, a good solution that allows us to… order food! Right, it’s Ikea’s restaurant that makes clients satisfied again. Not for long, though. Ikea used this map to see that, indeed, restaurants do great, but… after having eaten we go downstairs to find a piece of furniture in the warehouse. It’s not pleasant anymore. It takes longer, you wait for the furniture to pick it up, then stand in line for the checkout, get ready to transport the furniture and pack it in the car, none of these things are satisfying.
But do we leave Ikea disappointed? No. Why? Because the people responsible for our UX took care of getting our satisfaction peaked eventually. What’s on the way out?
Cheap ice cream, hot dogs, casseroles worth a dime.Tastes of low quality, but at a price so attractive that eating them compensates us for our dissatisfaction with the service at the exit.
If Ikea had never mapped her data in the form of this path, we wouldn’t have been so eager to return there. This map is well over 10 years old. Since then, Ikea has continued to explore the satisfaction of their customers by diversifying their experience in different markets.
Map data and locate information gaps!
Searching for alternative ways to use data
The resources your company is likely to have:
- Misja i strategia firmy – Mission and strategy of the company
- Cele biznesowe – Business goals
- Zaplanowany budżet – Estimated budget
- Zasoby materialne – Material resources
- Produkty i usługi – Products and services
- Zasoby ludzkie – Human resources
- Wizerunek – Image
- Informacje o otoczeniu rynkowym – Data on the market environment
- Kompetencje zespołu – Team competences
- Wyniki sprzedażowe – Sales results
- Kanały marketingowe – Marketing channels
- Surowce i półprodukty – Resources and semi-finished products
Each of the resources listed in the picture above is connected to various processes in the company. Ensuring procurement, marketing, production/services or sales.
Each one is also a tiny “data generator”. When it comes to business, we think mainly about the most important marketing and sales data and their analysis. A common example is the return on investment calculation, ROI. How much we needed to invest to acquire a specific customer. How can we use the information about our company’s ROI in an obvious way? For example for:
- selection of optimal marketing channels (those that result in the highest ROI);
- developing marketing strategy to start scaling up business when the time comes;
- making decision whether to hire a new person at the right time to scale up the business.
What are the slightly less obvious ways to use information about our ROI? These could be, for example:
- selecting skills in which we should invest to start diversifying our income and, for example, developing products;
- developing a growth and development strategy for the company over the next few years;
- segmentation of customers into those whose acquisition is a “quick win” — for example, teaching English to Poles living in Switzerland.
Ensuring transparency of data and providing the team with access to information
Where there’s no honesty and transparency there’s no culture of data either. To enable someone to develop solutions or strategies, or to make decisions based on data, internal rules for data availability are necessary.In the Project: People lean agency I work for, each team member has an insight into team occupancy, the results of sales and marketing campaigns, SM activities, the results of work with different clients, strategies, analyses and research. During each cooperation with a client we produce a huge amount of data, conclusions and templates.
It’s their full availability and right storage that makes us open-minded for using them further. To streamline communication, better analyze and improve the marketing funnel, recommending a new PR initiative or modifying the process of working with the client. Conclusion: make sure your employees have access to a wide range of transparent data.
Promoting a culture of communication and giving feedbacks
How can we ensure team communication and feedback? I believe this issue is so comprehensive that a separate article might help us explore it a bit more. However, we should bear in mind that if there’s no space for exchanging knowledge and information, there’s no way to build a successful data culture.
Better done than perfect
To sum up, using data can support making strategic decisions, optimizing sales activities, as well as introducing changes in the organizational culture. Necessary actions that need to be taken to use the data to improve performance in your company include:
- mapping of information and gap detection;
- searching for alternative ways of using data;
- ensuring data transparency and providing the team with access to information;
- promoting culture of communication and feedback.
However, the most important thing is to start introducing these activities, even if the processes are not perfect. The results, which means changes in the way of thinking about information, will happen within the team relatively quickly.
More information on how to use the data in the organization, as well as a lot of practical materials, checklists and tools can be found in my presentation on slideshare.
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