Elite service companies are tapping their growing pools of data to make better decisions. Market leading businesses focus on collecting the right information and interpreting it for improving their internal process and for engaging their customers. Leveraging the emerging discipline of analytics, or expertly managing and interpreting business information, gives companies a decisive edge.
It seems axiomatic. The more a company knows about the people it wants to serve, the better able it is to create offerings they prefer, to develop targeted messages, and to extract more value across the customer experience.
This Spring, my company launched Value-based Analytics, a model for measuring what your most valuable customers need and want (“value drivers”), and the ways that client’s services meet and don’t meet those drivers.
Many companies are adrift in a sea of numbers. But for those with a clear understanding of how quality business intelligence can be used to make sound decisions, these really are the halcyon days of analytics.
It is increasingly feasible for enterprises to tap information to handle more granular segmentation, low-cost experimentation, and customization. Data mining and speech analytics tools are increasingly affordable and are leveling the playing field, even for mid-range players. The quality and availability of information are both rising while the costs of managing information are falling.
Many service firms that collect information obsessively are paralyzed by the reams of data. Choosing the right information to extract and interpreting it accurately require focus and fine-tuning. Like any other enterprise capability, analytics ought to be tied to business strategy.
Before jumping into the deep end of the pool, there’s a caveat. Building analytical capabilities across the enterprise often challenges the orthodoxy. Shifting to a more analytical approach upends legacy systems and undermines the status quo. Information is power and, naturally, some managers see a full-scale analytics initiative as threatening.
Transforming the company’s analytical capabilities is always an exercise in change management. Firms that rely on expert analytics – tools and mindset — to make better decisions stand to gain a valuable competitive advantage at a time that such advantages are increasingly harder to come by.
Want more info on this subject? Here are two exceptional resources:
Thomas H. Davenport and Jeanne G. Harris, Competing on Analytics: The New Science of Winning, Boston: Harvard Business School Press, 2007.
Stefan H. Thomke, Experimentation Matters: Unlocking the Potential of New Technologies for Innovation, Boston: Harvard Business School Press, 2003.