It seems like every day new statistics appear about the amount of data that is being generated and the truth is that the numbers are beyond comprehension. The last stats I read are that by 2020 there will be 35 zettabytes of data stored. “What’s a zettabyte (zb)”, I hear you ask? Well a zettabyte is 1012 gigabytes. Now I remember the days of IBM PCs coming with a 640kb hard disk drive and here’s what a 5mb disk drive looked like in 1956. Just playing with the numbers a little, to store 35zb of data in 1956 would require 7x1015 of these devices; that really is unimaginable.
Enough of these flights of fancy, my point is that we have lots of data and it’s growing fast. But data in itself is useless unless it can be analysed and provide value, which is where Rosslyn Analytics with our RAPid platform come into play. Although the mass of data can seem daunting having the right tools to extract, integrate and analyse the information creates new business opportunities one of which is data monetization.
The monetization of data opens up at least 2 opportunities for advisory firms; the first is using the data they have accumulated from hundreds of customer interactions to provide additional value to further engagements. They do this anyway and call it experience; adding analysed data to the mix should be a significant differentiator. The second is to provide services on how customers can monetize their own data. Steve Jobs said ‘if you don’t cannibalise yourself someone else will’. By helping monetize their data advisory firms can assist clients with customer retention and new wins.
This is all very well but is practice what kind of commercial services can be provided from monetized data? There are four main ones:
- Direct marketing. Alerts on changing customer behaviour can provide a valuable insight into the acquisition of new customers and the management and retention of existing relationships. Marketers use these alerts to help them tailor their marketing messages on an almost real time basis.
- Predictive analytics. This is where models are used to create predictions that help companies develop more profitable relationships with their customers.
- Benchmarks and indexes. An index is a statistical tool designed to measure momentum or lack of it over time. A benchmark is something that serves as a standard by which others are measured or judged; it is a point of reference from which measurements are made.
- Gamification. This is about capturing data on user activity and using this to create a more compelling experience; thus allowing businesses to better engage and motivate employees. Many years ago I worked for a company making vehicle tracking systems. One of our partners used the data from these for a client to analyse their employees driving habits in company vehicles. They created a monthly league table of driver performance and offered cash prizes to the driver with the best habits. Result were happy, motivated and good drivers, reduced fuel consumption, vehicle wear and tear, insurance costs etc. A simple gamification idea with huge payoff.
When it comes to monetization this is about all I have. For a great deal more expertise, background and insight take a look at Mark Pearces’ website, www.profitfromdata.net.
Next time I’ll write about how advisory firms find efficiencies.