It is now widely understood that an online presence is extremely important to the future prospects of just about any modern day business. It is also now accepted that any credible company must have some kind of website because we are far more likely to do a quick Google search of a company before engaging with them.
Whilst many companies have fully embraced the Internet in order to reach and service a greater number of customers, many different types of companies are leaving huge amounts of value on the table by not looking beyond the simple brochure website. A brochure website is an effective marketing tool for many different types of companies, but it is the bare minimum that you should be doing.
The Internet has opened up a new way to collect and synthesis data on clients and potential leads. Instead of hoping the fish will jump into the net, you should be actively using data to pursue the right opportunities for your company.
Here is how you can use data as your competitive advantage.
Why data is so important?
Why should your business make the investment in data? Having a system and a process to effectively collect, manage and assimilate date at first will be a large investment in time, money and resources. It is certainly not a quick fix solution, but it will lead to a better future for your company.
Having data on your current customer base and your potential customers will give you a huge amount of insight into your business. From what works and what doesn’t and the future trends that you will be able to spot first. Having data will allow you to make informed decisions, rather than those based on assumptions.
Amazon for example, is a company that has been built on the foundations of data. Amazon has such a wealth of data on it’s customers it can proactively make targeted recommendations and promotions based on the past purchases of it’s users. This can then be sliced based upon product type, age, demographic or just about any other axis that you want to base your campaign on. By using deep data mining in this way, Amazon has a huge competitive advantage over the regular book store that must find a way to track it’s customers through a loyalty scheme.
How you can collect and manage data
I don’t think any initiative like this can start with an all encompassing view of what data should be collected and used for the future prosperity of the company. I think you should always start as small and as simple as you possibly can in order to grow organically and not allow yourself to end up in a place where you a drowning in data that has no meaning.
To begin, look for the most important piece of data for your business and work out a way to effectively collect and use that data so it has meaning to the future decisions your business will take. You need to commit to making decisions based on the analysis of your data or the whole exercise is a waste of time.
For example, say you are selling a piece of Software as a Service (SaaS). You need to be able to track how many people actually use a particular function of your software. Technically you could go about this in a number of different ways, the real value here is creating an hypothesis of what you think will happen, then determine a number of experiments to effectively capture data on usage and then use that data to make a future decision on the development of that function.
Another example could be a business that could use it’s client’s dataset to reveal hidden value and new opportunities or simply a way to offer a better service. For example, a dating agency could track usage of their service beyond what the client fills in at the start of the process to ultimately help the client find a better match.
Of course, this process should be applied in a very specific way to the kind of data you wish to capture.
If you want to make data a long term competitive advantage for your company, you should have long term aims for the development of a system and infrastructure that allows for the collection and assimilation of data across your organisation. As your date capture and mining techniques mature, you will find you are in a very different place than where you were when you started. Don’t get frustrated early on, this is a long term strategy that might not be fully operational for some time. Remember, Amazon wasn’t built over night.
2 examples of online businesses that can use data as a competitive advantage
To try and make my point clear, here are 2 examples of how companies can utilise date for a competitive advantage.
Business Networking Organisation
The traditional Business Networking Organisation arranges networking and social events that allow local business people to meet each other, engage and potentially form business relationships or alliances. LinkedIn was one of the first “social networks” that catered specifically for business people and the nurturing of business relationships. LinkedIn is by far the undisputed leader, but there is a huge opportunity to provide a better business networking service for people of specific geographic locations.
The most basic Business Networking Organisation website would simply list future events and allow people to register to attend. This is good because it allows the host to gather a little bit of data about the attendees and they can get an idea of the amount of people who are interested or who have shown intention in a particular event.
More and more Business Networking events are starting to follow in the steps of LinkedIn by allowing their users to register a profile, fill in details about themselves and their business and make “online connections” with other users. Again this is fantastic because it is another step in the right direction. However this is often limited by the system and the infrastructure of the chosen software to manage users, profiles and basic site functionality.
Take it one more step further, with a bespoke business networking website, you can capture any data you wish at the surface level, but you can then start using the data that is created around events (events being actions of the user) and data profiling to offer a better service and a better experience for your members. For example, this could be used to surface a recommended connection between to people that have aligned goals, or to introduce a user to a conversation that is happening in a group on the site that the user is not currently involved in.
As a side stream of income, many of the Business Networking Organisations allow advertising by their members. Imagine if you could show far superior feedback on your advertising programme by targeting your users advertisements at the specific business owners they are looking to engage with.
The traditional Recruitment Agency advertises job openings on a variety of mediums to collect together applicants that are appropriate for the job in question. These applicants are then narrowed down to a final list which is then submitted to the client for interviewing. Recruitment Agencies look to attract new job seekers through websites, newspaper ads, social media and a variety of other platforms. They also collect and use a database of past applicants to try and find suitable matches for roles they are looking to fill.
This process is fine, but it relies upon a Customer Relationship Management (CRM) system that is constantly up to date and always adding new applicants, not exactly a scalable system to manage.
However a Recruitment Agency could use data in a number of interesting ways. Here is my advice for a Recruitment Agency looking to utilise data as a competitive advantage.
Firstly create a profile based website that allows applicants to create a profile and apply for jobs. Scrap your current CRM software and rely on your website’s back-end to store, manage and use your company’s data. This will prevent duplication and it will force you to commit to developing a bespoke web based solution that is comprehensive enough to support the needs of your business.
Secondly, encourage your current and prospective applicants to create and complete a profile in order to be considered for a job. Scrap CVs and have your users enter their experience, skills and personal statements into your website so it is sortable and index-able.
Thirdly, create a seperate user area for companies wishing to find employees. Again allow them to enter details about their companies and allow them to post jobs specifications without hassle.
How will this system allow a Recruitment Agency to utilise data?
- The company’s applicant data will always be up to date. As new and past applicants gain new experience, qualifications or wish to start their job search again, they can manage their details for you without having duplicate or out of date data. This data is the lifeblood of your company and is the scalable asset you will need to grow your business.
- You are removing a huge amount of friction of the job application process. Applicants can come to you, submit themselves and allow you to store their data for future openings. Clients will be more likely to place a job with you if you make the process as easy as possible, and on seeing how easy it is, they will be more likely to come back and use your service again. And finally you will have a constant update database of data you can query as new jobs come in.
- If a company is unsure whether they want to hire you as their Recruitment Agency, you can allow them to query your database to see exactly how many potential applicants you can offer them. By allowing them to do searches of your data, they will be able to see how many applicants they will likely receive, and how many superstar employee’s that they can approach. Of course you would need to keep the search results anonymous, but I imagine this would be a huge factor when trying to win new contracts.
The future is data
The above are just two examples of how modern web enabled companies need to be using data to gain a new competitive advantage. If you don’t start to utilise the data you have at your fingertips, your competitors will leave you behind. Building the right system to capture and feedback data can be daunting to a none technical business owner, but it should be approached in the right manor. Trying to cut corners with off the shelf systems is as good as ignoring the opportunity. Hire the right person to come into your organisation to build the infrastructure and the system that will allow you to generate, analyse and assimilate the right data for your business.
How are you using data in your business to make future decisions and gain a competitive advantage?