In working with many smart business people and analysts in the past few months, I came to appreciate the ease of accessing web analytics.
Who knew that math and data would become a main revenue driving force for businesses big and small?
Every business is fast becoming a data-generating machine.
From upstream to downstream, data rewards us with actionable insights to make profitable decisions via controlled experiments allowing us to advance our business models.
And yet, this is just the beginning as the number of people connected to the web continues to grow, so too does the vast amount of information about those individuals.
According to McKinsey Global Institute, “collecting, storing, and mining big data for insights can create significant value for the world economy, enhancing the productivity and competitiveness of companies and the public sector and creating a substantial economic surplus for consumers.”
Collect and Analyzing Data for ROI
We can’t mine data we don’t have, so now is the time to focus on data gathering.
Simply put, data will produce new value for businesses whether it’s setting up web analytics, collecting email addresses or compiling transaction data, the ability to turn data into actionable insights equals the ability to make money on the social web.
In addition data is the foundation for business return on investment (ROI) that enables predictive analysis to explore highly targeted and optimized marketing campaigns.
ROI-centric businesses focus on maximizing the lifetime value of a customer, which in many cases refers to customer retention and the cost of sale.
That means leveraging weighted algorithms and attribution models to target and re-target the “next-best” opportunity.
The key is to put data in context and “translate” them into meaningful key performance indicators (KPIs).
For example, a controversial topic that I often come across is the concept of social media ROI.
In reality, social media analytics and engagement data do not have a transparent cause-and-effect ROI so analyst Jeremiah Owyang of Altimeter Group came up with a simple formula to look at social media ROI.
By focusing on business goals, he recommended companies to develop a standardized way to measure first based on objectives, a fundamental starting point to put ROI in context.
An important aspect of reporting ROI is to put data in perspective for everyone involve. It’s indicative that social media ROI requires mapping the right data to the right role because different data sets mean different ways of measuring, segmenting and analyzing.
The Increasingly Social Search: Social Media Data
Although search engines such as Google, Bing and Yahoo have provided tremendous insights into customer behavior, the rise of actionable social media data is adding fuel to the explosive growth of digital information.
Now that Search engines are integrating social signals into their algorithms, social is going to play an important role to increase efficiency in targeting.
Facebook, LinkedIn and Twitter can help generate even more granular, multifaceted customer segmentation from profiles, posts, click histories, and usage logs by identifying influencers and leaders within social groups, as well as their followers and outliers.
Not only can Social media distribute marketing messages out faster, they allow companies to gain deeper insight into customer behavior in much more detailed than it has ever been.
In addition, social media enters into early majority phase of adoption according to a recent survey by Regus, more firms are using social media to engage with existing customers than a year ago, with the following highlights:
- 50% of businesses in the U.S. use websites such as Twitter to engage, connect with and inform existing customers
- In the U.S., 55% of firms encourage their employees to join social networks such as Linkedin and Xing
- 38% of U.S. companies dedicate up to 20 percent of their marketing budget to business social networking activity
- Globally, the survey reported a seven percent increase in the proportion of businesses successfully recruiting new customers through social networks such as Facebook
Geolocation: Adding Space and Time to Data
Local data is one of the most valuable forms of data because it can put local business in touch with potential customers while they’re in the vicinity of the business.
Do you wonder why all of a sudden people are “checking in” on Foursquare, Yelp, Facebook and Twitter?
According to IBM Engineer Jeff Jonas, “With roughly 600 billion data transactions from cellular phones on a daily basis, adding space and time to traditional data objects can help predict where someone will be on a given day and time with up to 87 percent accuracy, for example. Adding space-time works because, oddly enough, of physics.”
The Take Away
The bottom line is that it is about giving youself the highest chance of marketing success by targeting customers that fit your business model.
Needless to say that it is important to collect the right data (context counts!), but the intrinsic value is in your ability to extract actionable insights beyond trends and patterns that reveal profitable opportunities.
The only question that remains for you is this – what data are you collecting, why, and how does that fit into the big picture?
I recently gave an interview to Adobe’s CMO.com about this topic.
Check it out: McKinsey Report Calls For New Generation Of Web Marketing Analysts
This article is for people that have no idea on what goes into product development, how they can develop a product even without being a designer.
Coming up with new ideas could be easy for you but difficult to execute. Your goal is to develop a working prototype, or ideally, go to market with it. Market research and analysis are vital to the decision making process, so your first goal when putting the project in perspective is to define the product from some initial market research.