Using customer data to refine products or services and get ahead of the competition is not new. It’s the ever-increasing volume of information, and the speed at which it’s collected, analyzed, and deployed to enhance or completely change products and services that poses new challenges.
Your customers are leaving a trail of data, like breadcrumbs through a forest. How can you leverage this user information to find a more competitive position in your market? Here’s some things you should know about using data to get ahead:
Focus on the Right Pieces
The first step is determining which pieces of data will illuminate the right differentiators. Leveraging customer data to build a competitive advantage demands an understanding which pieces of feedback, user actions or customer preferences have the potential to guide effective changes to your product or service. You need to look for which pieces of data will help you determine if an upgrade is a true differentiator or just nice to have.
Establishing Data ROI
Next is understanding data collection and analysis ROI. Analyzing user data can be like trying to get a drink of water from a fire hose. You need to know when you’re at the point of diminishing returns – where the cost of collecting and processing data exceeds any potential advantage, when further refinement isn’t possible regardless of the data, or where customers just don’t care.
Sometimes, additional refinements don’t impact customer opinion or use patterns. It’s important to understand this threshold to determine the limits of data ROI. When data-based insights project a positive effect on significant population of actual or potential customers, then data ROI is high and helping build your competitive advantage.
If the value of your data drops off quickly then you’re in a highly competitive market and data may not be the thing that differentiates what you’re offering. Long term, historical data is a differentiator for specific services and industries. While the internet is always changing and evolving, Google’s decades of data provide an unbeatable competitive position – just ask Bing. In other industries, shifting fads and upstart providers lead the competition and historical data confers no advantages.
Proprietary and Confidential
Exclusive and proprietary data offers immense potential advantages over information that’s readily available to anyone willing to access outside sources. If you have access to unique customer data, and you can keep it confidential, you have an immediate, significant leg up on the competition.
Speed to Market
Data utility is crucial to building a competitive advantage. The faster you can analyze customer information, produce insights, and release enhancements, the further ahead you’ll be. Speed to market increases data ROI and even high depreciation data helps you get ahead. Rapid learning and upgrade cycles make it harder for your competitors to keep pace – particularly if frequent, targeted enhancements affect current clients instead of just appealing to future customers or applying to new versions of the product or service.
You’ve analyzed the data, designed your modifications, made the changes, and released the latest version. So, you’re effectively ahead of your competitors, right? Unfortunately, if it doesn’t take long to replicate your upgrades with improvements of their own, your advantage doesn’t last long. Leveraging data to identify meaningful, difficult to imitate, enhancements improves your competitive position.
Personalization is an important trend but upgrades that appeal to a multitude of current and potential customers are how you turn data insights into network effects. User data can provide the ability to build personal customizations with broad applicability.
Out of the Forest
Customer data is invaluable for providing appealing, differentiated products and services. Yet, building a true competitive advantage requires understanding your customers’ digital breadcrumbs to know which ones will lead you through the trees and onto the best route forward. Machine learning insights are only as good as the design strategy and data inputs.
When learning from one customer helps many, when changes affect, and delight, current users, your data reaches peak ROI and bits of scattered information transform into a clear path to a more competitive and successful future.
We Help Keep Your Data Safe
Maximizing data ROI starts with keeping your data both safe and usable. Data masking is the right fit with highly effective protection that maintains your ability to leverage data for business-critical functions.
Tailored to fit any business need, Accutive Data Discovery and Data Masking protects your most vital competitive resource, while ensuring the ability to serve your customers and grow your business. Find out more about our customized data masking solutions to protect and use your data with confidence – get in touch today for a free demo.