Any business needs to define processes and strategies to manage its data effectively yet few are able to demonstrate such an approach when asked. In fact, optimal data practices can benefit a business in many ways: for example they can offer insights that can be used as the foundation for sought-after business intelligence as well as customer experience improvement initiatives, product development, management of billing and avoidance of fraud. Plus having a data strategy saves time by preventing a duplication of effort.
But what does best practice look like? All businesses are different, with diverse needs and goals, but here is some general guidance that can help you find the right approach.
One of the first things that business owners need to keep in mind when it comes to defining a data strategy is to remember that all aspects and types of ‘data’ are important. Whether it’s the data gathered on customer profiles that marketers use, customer service insight, performance data or supplier data, it all plays an important part in informing decisions and, therefore, setting strategy. With that in mind businesses can start outlining their data strategy starting from these key recommendations:
- Analyse your data
Efficient and regular analysis of your data will help to develop a clear picture of what easily accessible information you already hold. Make sure all the suitable data is in a single repository in order to ensure easy identification and to be able to spot any trends and patterns. Analysing the general picture can help your business understand its strengths and weaknesses – such as delivery issues or how customer service manage your data – together with your customers’ habits and behaviours (e.g. who are your most valuable customers, who instead of costing money, bring profit).
- Manage your data
To put in place an efficient marketing strategy you need to know exactly who your customers are. Easy access to the company’s data will allow you to group customers into segments ensuring a better understanding of their shared characteristics.
Segmenting your customers and implementing a more sophisticated data management plan can benefit more than one part of your business enabling the improvement of the decision making process across the company.
- Quality over quantity
In order to avoid capturing a huge quantity of unusable data it’s important to be clear on which particular objectives you have. It may be preferable to set out a staged process of data management improvement with different objectives per stage. The first step in that direction is to set the goals that your company wants to achieve and plan on how to reach them.
Defining this strategy is crucial but the unreliable nature of data can undermine its effectiveness: if information (e.g. phone numbers or addresses) is inaccurate then basic customer communications will be ineffective, which will mean you will risk damaging your customers’ loyalty along with your reputation.
- Watch out for data governance
Keeping up to date with the latest changes in data regulations will save your company money and reputational damage. Failing to meet regulatory requirements can also expose your business to financial penalties, preventing it from reaching its goals.
For example, it’s important for businesses to know that – from May 2018 – the new General Data Protection Regulation (GDPR) will come into force, establishing that companies of all sizes must follow strict transparency rules. Efficient data management is the basis on which to build this compliance.
All these different aspects highlight how the creation of an effective, solid and well managed data strategy is essential for the success of any business.