3 Ways third-party data can help enhance a company’s analytical approach
Businesses today talk a lot about embracing data in their digital transformation efforts. Look left, right, up, down, and all around, and you’ll see countless companies investing hundreds of thousands, if not millions, of dollars in collecting data and optimizing their analytics tools.
Of particular importance to many organizations is “first-party” data—which often captures customer interactions, transactions, consumer behavior, and more. A typical online customer interaction, for example, can produce more data for a business to analyze than a lifetime of offline customer interactions. How does this work? Think of a mobile application beacon collecting user location data, thus allowing an organization to understand consumers’ geographical usage area and associated time zones—making targeting easier for specific offers and products.
First-party data—along with zero- and second-party data—is undoubtedly valuable. But there is far more out there, too, for companies that are willing to look. Highly successful enterprises don’t stop at analyzing their internal data, pulling some insights and moving on. They push to gather and integrate external data as well, so they can maintain and fortify their uniquely competitive business assets now and into the future. This third-party data—not the kind marketers could buy from Facebook but, rather, data that exists publicly via a literal third party—presents companies with new capabilities and potential opportunities to expand their analytical footprint now and into the future.
Embracing third-party data for business benefit
So, how exactly can companies embrace third-party data, and how can they benefit? Here are a few ways—and real-life examples.
Utilizing third-party data to increase supply chain visibility
One North American consumer packaged goods (CPG) company functions by sending its products to large chain stores around the country, who then ship them out to a variety of distribution centers. Distributors can then buy those products, selling them to smaller stores who, in turn, sell them as well. As a result, manufacturers are often left with very little visibility into product sales outside of knowing the original buyer. Recently, though, the CPG company began working with a third-party data company to measure and track where everything went after it was sent to distribution centers and smaller stores. By marrying that data with internal systems data, it was able to better understand what was working and what wasn’t—and how it could alter and optimize their supply chain as a result.
This use case shows what companies like this one can do, collecting data through a third-party that enables them to see sales numbers by city, state and regional levels. Companies looking to improve visibility into their supply chain should consider potential third-party data options, as they can help close gaps and shine light in otherwise hard-to-see places.
Capturing public data to better understand consumer sentiment
A different U.S.-based company works as a manufacturer and seller of firearms. Its product requires a background check for a consumer to purchase, so they decided to take advantage of that knowledge—and find an outside-the-box way to study consumer sentiment and desire. The federal government runs the background check system in the U.S., meaning a lot of public data is available to be gathered. By pulling that data from government databases and comparing it with data on where sales were taking place, the company was able to adjust where they sold their product by capitalizing on discrepancies between the number of background checks and the number of firearms sold in particular areas.
Publicly available data can often be forgotten by decision makers going about their days, despite it being available all around us. Companies should always look for ways to utilize this kind of data, especially when it can reveal what consumers are thinking, feeling and, most importantly, doing.
Examining outside data to capitalize on evolving market trends
At the outset of the COVID-19 outbreak, a large dental conglomerate was suddenly faced with a distinct kind of crisis. An easily transferable virus made visiting the dentist’s office seem frightening at best, and deadly at worst. However, it kept their eyes on the data, examining COVID-19 trends and tracking virus hot spots, enabling them to ramp down and up when and where it was safe to do so. It has continued to do so throughout the pandemic, operating adeptly and adroitly to navigate various lockdowns, caseload spikes and more.
Their story highlights the reality that, pandemic or not, the world is going to continue changing in a variety of surprising and often unpredictable ways. Companies need to know where to look for vital and actionable data that enables ongoing productivity and success, no matter how things shift or evolve.
A vision of what’s possible
The future of data and analytics in business comes down to having a vision. A vision of what’s possible for companies—and CIOs—who often fail to realize the incredible potential of a wide-reaching, cohesive and innovative data. Just look back over the last couple of decades: The companies that have emerged as market leaders throughout the business world have distinguished themselves by being data-rich and solution-hungry. With technology innovating rapidly, the opportunity for more companies to set themselves apart has arrived. Can well-established leaders transform to keep up with modern innovation, or will new outside-the-box thinkers step up in their place? The connectivity and capability of today’s modern tools make either outcome more than possible, enabling businesses to pull in data through APIs from best-in-class services and solutions—and to integrate it into everyday business decisions and insights.
Here are a few tactics for business leaders to keep in mind as they set about pursuing analytical upgrades … or full-on overhauls.
Don’t get lost at sea—When it comes to data, there’s a big difference between quality and quantity. A company might be able to gather 50,000 data points, but it’s entirely possible 95% of them may be of no use at any given time. This doesn’t mean that most data should be thrown in the garbage, but it does mean companies need to be discerning as to what data will impact their day-to-day business and ultimately deliver the greatest insight and value.
Get everyone on the same page—Society may be long past the point of full-on ignorance when it comes to next-generation technologies and their effects on advanced data and analytics—but we’re not past the point of non-technical specialists having to often feign understanding of their ins and outs. That’s why data experts must be able to speak the language of the C-suite, helping them to grasp what the real, tangible business value will be to the company.
Display quick wins to gain momentum—Too often, business leaders—and thought leaders—focus a great deal of their energy on panaceas and major, pie-in-the-sky transformation initiatives. Companies that win know to take things one step at a time, marking measurable outcomes and results at each checkpoint along the way. There should be no “end goal”; rather, companies should focus on continuous and improvement and innovation. The most successful leaders know winning means trying and improving, again and again and again.
The road to best practices in data may not be a short one, but it’s one all companies must take to survive today and into the future. In short, there’s a whole new world of potential out there, just waiting for companies to find it.
They simply need to think bigger, start looking, and follow the data.