In today’s world, every company operates on data. And every company wants its revenue to get bigger. But not every company know how to monetize data. Data monetization strategy can be both beneficial and successful. Each data has its value, but insights gathered from this data can be even more valuable. Therefore, companies are trying to use each tool possible to grow their revenues.
Data monetization can be achieved both ways. First, by focusing on internal data to improve a company’s productivity and operations. And second, by making data available to customers, thus resulting in creating new revenue streams. A few of the most influential companies are combining both these path. The key to success lies in carefully prepared approaches that are consistent with a company’s overall business strategy.
PREPARATION TO DATA MONETIZATION
First of all, it’s important to remember that not all data is valuable and saleable in its raw form. In fact, most of it is not. For useful insights and increased value of information, the data can be enriched with other sources. Only then the company can increase the value of data.
Secondly, to be able to prepare the data to work for customer satisfaction (both internal and external), it is really crucial to know the target group for your data. You need to know which of customers’ needs and goals you are going to address. Prepare use cases for your data to make it more useful. Optimization, personalization, gaining insights – all these are the possibilities that open up when the company hears its customers. And it also helps with making better decisions, based on the gathered data!
As already mentioned, the company’s data may not be valuable at the very beginning. In fact, it depends on different factors, such as competition, market demand or customer satisfaction. It’s easier to know how to monetize data and maximize its potential by following market trends. Then, you just need to adapt the data to them thanks to advanced data analytics.
DIFFERENT IDEAS ON HOW TO MONETIZE DATA
How to monetize data? There are a few data monetization strategies to choose from, that actually offers great opportunities, depending on the maturity of the organization.
DATA AS A SERVICE
The first one is the simplest one of all business models listed below, sometimes called data syndication. Basically, an anonymous, aggregated data is being sold to intermediate companies or to end customers. Then, companies and customers can operate on data mining.
Telecommunication operators provide geolocation data to allow city planners to design more effective traffic systems or smart city solutions. In retail, the gathered shopping data allows better personalization of discounts and offers, as well as a deeper understanding of customers’ shopping habits and preferences. All to make sure your customers’ satisfaction level increases!
INSIGHT AS A SERVICE
The second idea on how to monetize data is about combining internal and external data sources to provide valuable insights. In essence – the company doesn’t share the data itself as in the first model, only the insights derived from the data.
One chemical company created a decision-support model that enables ship operators to save funds on CO2 and fuel. Thanks to the mobile application they can optimize their investments, by relying on the analysis of coating choices.
ANALYTICS-ENABLED PLATFORM AS A SERVICE
The third one is definitely more complex, but also really valuable. This model takes the insights from the second model and makes them available in real-time through a cloud-based platform. Partners of the platform can access it anytime, and if enriched with an API, they can even use it to create real-time based triggers.
GE’s platform Predix is responsible for developing energy management systems for lighting and energy. The company allows customers to make cost-reduction decisions by simplifying energy processes, leading to automation and operational efficiencies. All these thanks to their prescriptive analysis around energy use, maintenance, and other outcomes.
MULTIPLE INDUSTRY PLATFORMS AS A SERVICE
And finally, the most advanced model of how to monetize data, a multi-industry platform as a service we like to call the synergetic data model. Taking a step into the future, TASIL strives to connect different industries in terms of their data. Matching various partners’ data sources in real-time would create an invaluable source of information that can be used for data monetization strategy (again, both internally and externally) and bring additional revenues far more prominent than the previous models.
TASIL was designed to support this model from the very beginning. Data sources coming from different partners can be securely matched and anonymously made available to third parties.
HOW TO MONETIZE DATA AND GAIN BENEFITS
As the basic information on data monetization strategies has already been mentioned in this article, it’s time to focus on what’s exciting – benefits! Companies are getting creative with how to monetize data as their enterprise peers recognize it delivers measurable business benefits.
DRIVE REVENUE AND INCREASE THE VALUE OF THEIR SERVICES
Leveraging customer value is a key way to fast track your business growth. Strategies to increase sales from already gathered customer’ data are as important as the strategies to acquire new customers. Therefore, putting data monetization strategy first is proven to be really profitable.
- A provider of GPS vehicle and fleet tracking solutions apply analytics to its data to show device usage and utilization. The company helps its logistics customers to manage fleet and truck utilization and lower the operating costs
- A telematics company has deployed 3.2 million IoT devices that produce GPS location and usage data. The company sells data subscription services to:
- Insurance providers, so they can underwrite premiums based on usage, not driving records
- Auto dealers to protect assets and detect frau
CREATE A COMPETITIVE ADVANTAGE
Companies can make many different strategic moves to build competitive advantage. Data monetization is not yet something that every company has, nor something that any company can have. Therefore, benefiting from data monetization may be an excellent move for your company!
- A transportation company offering fleet management solutions sells GPS device data and data from different operations systems. Its transportation and logistics customers use the data to improve service performance and reduce the cost of operations by tracking and measuring operating costs, driver safety and compliance metrics
IMPROVE THE CUSTOMER EXPERIENCE
People always prefer a brand that keeps them happy and satisfied, so improving your customer satisfaction is a must. Satisfaction and happiness are the two critical factors that keep customers loyal and should be a be driving factors of your customer experience strategy. You can achieve both when your product or service works perfectly or can satisfy the exact customers’ needs, which means understanding what these are.
- An energy company uses analytics to do predictive maintenance and reduce fraud. It collects smart meter data at five-minute intervals, analyzing the data internally to improve outage response and optimize repair crew dispatch times. In addition, it utilizes device usage frequency to predict which devices will fail, shipping new devices before failure. Finally, the usage data reveals fraud and energy meter tampering
CONCLUSION – THE PATH TO A STRATEGIC SUCCESS
Many companies still don’t know how to monetize data and don’t think of their data as an asset they can monetize. They’re overlooking a perfect opportunity. Not only can they make better use of their data to enhance products and services for current clients, but new technologies allow them to take the next step – combine their data with external data. Moreover, the essence of data monetization strategy – make it securely available to their partners.
To maximize internal and external monetization’s potential, companies should focus on automation of the process of collecting, enriching, transforming, and deriving insights from data. It’s a complex undertaking requiring a set of design principles that touch on design thinking, lean startup, and agile methodologies for success.
All companies are data companies, and most have a substantial amount of unused data, that can present tremendous financial value.
They can increase their revenues by not only know how to monetize the data and maximizing the internal value creation but also creating a market for their highly valuable insights. Thanks to this kind of approach, each company can practically reinvent the market. Getting data monetization strategy right requires significant effort, but it’s becoming critical for staying ahead of traditional competitors and new disruptors.