Companies that leverage customer behavioral insights out-perform their peers by 85% in sales growth and over 25% in gross margin, reports McKinsey, quoting a Gallup report. Yet most companies aren’t using the data they already have. The reasons have been well-documented: data is disorganized, incomplete, outdated and often housed in separate databases with different underlying designs which prevent the data from being combined. The task just seems too overwhelming.
McKinsey conducted a survey to find out just how much valuable data is being wasted. Their survey of 700 companies worldwide concluded that “spending on analytics to gain competitive intelligence on future market conditions, to target customers more successfully, and to optimize operations and supply chains generated operating-profit increases in the 6 percent range.”
Among the benefits to be gleaned from applying analytics to the data companies already have, McKinsey suggests are:
- Understanding patterns of behavior, such as when and where people access the website and when and where they use the company’s products and services. This can lead to reallocating budgets, better marketing customization and sparking ideas for new products.
- Improving efficiency in operations by giving more visibility to managers, or by making specialist knowledge more available in the right place at the right time.
- Using data to drive innovation, whether it’s creating new business models such as AirBnB or deriving new healthcare solutions from wearable device data.
Almost every company has valuable data that is warehoused, instead of being used to drive the business forward. The task of setting a goal for what can be gained from the data, then cleaning it, updating it, analyzing it can seem overwhelming, but, as McKinsey points out, “virtually every organization has valuable customer data assets that could be put to better and more active use.”
With a clear strategy, the right backing and resources and a resolve to tackle just one or two priorities “companies don’t need to wait until they have the ‘perfect’ systems or technologies in place. These two foundational steps alone can open up a wellspring of opportunity.”
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