How data analytics can supercharge your business
Are you keeping up with the digital disruptors and corporate giants?
28 November, 2017
Should you be worried about how well you are using data and analytics within your business? If KPMG’s 2017 CEO Outlook Report – based on interviews with 1,300 corporate CEOs – is anything to go by, the answer is yes.
"More than a third (38%) of the CEOs surveyed admit they are not using data effectively to connect with customers."
Ian Brokenshire Head of Enterprise - South, KPMG
More than a third (38%) of the CEOs surveyed admit they are not using data effectively to connect with customers. And if they’re not getting it right, with multimillion-dollar IT budgets, what hope is there for the mid-market?
Yet our resident expert says it’s good news. Ian Brokenshire, who leads KPMG’s Enterprise offering in the South of the UK, sees many mid-market companies using inexpensive and flexible analytics solutions to supercharge their operations.
Despite possessing neither the get-rich-or-die-trying approach of digital start-ups or the budgets of the big corporates, your business is in a great position to drive smarter use of data.
Mid-market companies are more agile than big corporates, less likely to have built up rigid data silos, and better at driving cross-company collaboration. With less of a fixation on technology, now is the time to use your practical nature to beat the disruptors.
Smart use of data can help you break into new markets. Brokenshire reveals that one of his clients, a mid-market cheesemaker in Somerset, used that very approach to transform its UK-focused operation into a global entity.
Through simple social media analytics, an easy first step in big data, the business reset its understanding of customer opinion and rebranded accordingly. It now has a turnover of £100 million – proof that you don’t need to break the bank to generate a greater turnover.
“Times are tough – 65% of CEOs have confidence in the global economy, down from 80% in 2016,” Brokenshire says, referring to a statistic from KPMG’s 2017 CEO Outlook Report. “This cheesemaker used data to buck the trend.”
“One big lesson anyone can take from their story is ‘start now’. It’s never too early to investigate new sources of insight. And building quality data takes time. Mid-market businesses should at least start shaping their data stores today – finding ways to make their data consistent and clean. They will then later find that like any raw material, it can be refined for different uses.”
The first use for data is creating new products and services. The CEO Outlook report found that nearly half (47%) of CEOs are currently prioritising innovation. You can use analytics to pinpoint new customer needs – analysing their behaviour and the way they use products and then tailoring new offerings. By understanding the customer, you can stay ahead of the competition.
“Customer sentiment analysis is extremely useful in product development,” says Brokenshire. “It effectively turns the internet into a huge consumer focus group. The 61% of CEOs who believe they are not having much success with new business models can look to that kind of data to understand what their customers want.”
“Every journey has a first step, in this case, it’s identifying a business problem and comparing it against the available internal and external data."
Ian Brokenshire Head of Enterprise - South, KPMG
The second use is all about efficiency. The KPMG survey found that 53% of CEOs want to exploit existing markets more effectively – the most popular single growth strategy. A great way to do that is refining your marketing efforts. Data from online sources, combined with point-of-sale analysis and internal models around pricing, allows your business to target ad spend and promotions.
We’re also seeing tools such as predictive analytics become available to mid-market businesses, thanks to falling costs and complexity. It can help cut customer churn rates by identifying signs of dissatisfaction and revealing which individuals or customer segments are at risk of gravitating towards a rival.
“Every journey has a first step,” Brokenshire says. “In this case, it’s identifying a business problem and comparing it against the available internal and external data. But once you understand the drivers – and how to find and analyse the data on them – you have a blueprint you can re-use.”
The third is using data to build confidence in new markets. About one-fifth of CEOs are planning a move into new territories in the next year. This could offer a great opportunity for your business – especially in the era of Brexit.
Smart use of data can reduce the cost of going global. That’s partly about using data from new markets to populate analytics models for your own business, giving you confidence in expansion. But data can also drive efficiencies in everything from targeting overseas relationships to intelligent supply chain management.
“We worked with one client to analyse and optimise supplier relationships using analytics,” Brokenshire says. “The most important step was turning data into decisions – and that meant a culture change. By organising the data well, we helped the business concentrate on the most significant costs and logistics issues – that wouldn’t have been obvious without an analytics solution – and allowed decision-makers to focus on building profitable relationships.”
Denial and complacency are your real enemies.