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Turning Big Data into Black Gold

Turning Big Data into Black Gold

Ninety percent of the data that exists today has been created in the last two years. In the time it took you to read that last sentence, 11.6 terabytes of data were generated. That is equivalent to about 17,400 CD-ROMs (if you remember what those are!). We live in a connected world, with a proliferation of devices that connect online. For the modern marketer, this means access to large volumes of data. If you believe in the saying that data is the new black gold, then marketers have struck it rich! Right? Unfortunately, this is not always the case.

Investor Piece: Why Analysing Customer Data Makes Good Investment Sense

E­commerce in Indonesia is booming. Ardent Capital’s estimates put the B2C e­commerce market at US$2.6 billion, while CNBC believes that the sector’s total market revenue will surpass US$4 billion by 2016. Everyone wants a piece of this success, and investors interested in cultivating the next Amazon or eBay have enabled businesses like Tokopedia to raise hundreds of millions of dollars in funding. The future looks bright, but there’s no such thing as asure­win bet, and a major concern for investors is ensuring your capital is being spent wisely. Too many Silicon Valley start­ups take a “scale first, sustainability later” approach, and a majority of Indonesian online platforms seem to be following suit, much to their detriment. The plan may seem workable, but it’s neither viable nor effective as a long­term strategy. There are smarter ways to success, and as an investor you have the power to motivate companies to take a forward looking approach. A deep analysis of customer data will help maximise a company’s capital and raise sustainable returns.

All e­commerce businesses with any sense are undertaking data tracking and analysis, but too much effort is being spent on superficial projects that measure growth statistics only in the broadest of strokes. Companies basing their decisions on these analyses are only capable of making knee jerk reactions, and will require a constant stream of spending in order to maintain their strategy. Silicon Valley alumni Sam Altman recounted seeing companies burning through millions of dollars a month on customer acquisition, but not concerning themselves with attracting the right customers. With no long­term view on building customer loyalty nor increasing their returns on investment, these start­ups crashed and burned as a result. Similar scenes are playing out in Indonesia, where more than $800 million will be spent on digital ads in Indonesia this year. How much of this is being wasted? The marketplace is highly competitive, but that’s not a good reason to lose sight of future viability. Most dot­com entrepreneurs in Indonesia are young and know their product, but may be less aware of the wider business landscape, so savvier investors ought to help them pivot from a reactive stance to cultivating a long­term strategy.

Building a foundation of business longevity from the start is completely doable for any e­commerce company that makes it a point to truly understand their customer data. There is so much more that can be done with it beyond collecting it as a means of demonstrating growth. Analysing an audience’s behaviour and habits can help e­commerce businesses in so many ways. For instance, customer acquisition costs can be reduced through identifying the platforms where marketing efforts have brought in the largest number of large order sizes or repeat customers, resulting in more targeted and cost­effective spending. Being able to take the pulse of what customers want and need will also help e­commerce platforms improve on their product and service offerings, thereby generating greater customer loyalty. And with so many e­commerce customers doing their shopping on the go while stuck in traffic, being able to provide a smooth user experience can also enables businesses to gain a greater foothold in the market. Sound data analysis provides insights that pave the way for sound business decisions.

For too many companies, performing such data analytics is often seen as a daunting task, one they leave as a last step, or perform only after they reach a certain size. Such thinking overlooks the fact that early adopters of data analysis will have a better understanding of the market than anyone else, and the ability to be much more strategic about their investments from the start. Point this out to the e­commerce companies you have invested in, and motivate them to take this important step. Incorporating data analysis to an e­commerce business doesn’t always mean a dramatic overhaul of the company ­ it can be done in small and manageable increments. The most crucial part is finding a no­nonsense data analytics consultancy who will take the time to understand the unique needs of the business and recommend only the most suitable tools. The best consultancies can not only provide actionable insights through conducting meaningful analyses of a company’s current business health, but also empower companies to perform future analyses on their own, through structured training programmes that will educate existing employees. Done well, data analysis can help a company streamline operations, drive sales and increase their manoeuvrability through the good times and bad. Which has to be good news for any investor.

Aleetza Senn

Managing Partner & Co-Founder

Sparkline

Why you should mind the (data) skills gap

Why you should mind the (data) skills gap – and what you can do to side-step it

The way a business interacts with its customers, and what those customers expect from businesses is changing, and changing at rapid speed. As consumers, we are all becoming more comfortable with sharing aspects of our lives in the digital world, whether that’s buying products and services online or sharing our innermost thoughts on social media. Our willingness to engage with and embrace everything online provides brands with an enormous opportunity to develop a much more purposeful and meaningful relationship with us as current or potential customers. Every click of a button, every share of a page – all these actions now hold meaning or indicate intention. For brands to understand and make sense of these actions, in a way which will positively impact their business, new skills are needed. Individuals who are able to analyse customer data and understand how to translate that analysis into meaningful business decisions are hot property as those with data analytics skills and experience are in short supply.

According to a 2015 Harvey Nash-KPMG survey of Chief Information Officers across the Asia Pacific region, a vast majority believe that their organizations would be better able to keep up with the pace of change if not for this pesky skills gap. Data analytics is gaining traction, but there remains a lack of qualified individuals even as demand continues to boom. However, the solution is right there in front of you, in your existing pool of employees. Putting the power of information in the hands of your business, can and should start with enhancing the potential of people who already know your brand inside and out.

Data analytics as a skill-set needs to be demystified. Good data “scientists” in businesses perform very much the same tasks as a business analyst would. So no, you don’t need someone with a PhD in statistics, but you do need someone who possesses an in-depth understanding of your business and its concerns. Regular skills training can help build greater capabilities among existing teams, and help your company catch up to the latest analytic trends, making the most of your data and opportunities. Training people who are already familiar with the needs of your business will enable you to better connect with customers at scale. It’s not just about getting up to speed, but also being able to stay on-trend with future developments. Equipping your current employees with data analytic skills can also provide a foundation for them to drive new product innovation, based on new understandings of consumer demand.

How then to go about finding the right training for your people? The most important thing is to find trainers who understand the language and world of business, who can help you translate raw data insights into actionable business insights. Cleaning up your data will do very little unless they can teach you how to effectively utilize this information for your business. Look for a training company that takes an honest and straightforward approach to the world of data, who can cover both the theoretical and practical aspects of data analytics. Get trainers who empower their trainees with an understanding of analytics that will help them get to the heart of information and discern usable insights. Some might try to sell you technology that isn’t right for your particular needs, so find one who will take the time to understand what it is that drives your business, who can point out the right tools for you, and teach you how to use them well. Hire trainers who don’t shy away from answering the difficult questions about data analytics.

Through training your staff, it is entirely possible to cleverly side-step the skills gap instead of waiting on the vagaries of the hiring pool. The people you already have are in the best position to do your brand a world of good in the new online marketplace, from finding the right audiences for your marketing efforts, to making changes to your digital infrastructure and therefore better serving your customers. The sooner you take action, the sooner your business will benefit. Skills gap? What skills gap?

Aleetza Senn

Managing Partner & Co-Founder

Sparkline