Six steps to creating a data strategy

Six steps to creating a data strategy

Great marketers know how to get the best from the customer data they collect.  In this post, we’ll be exploring how you can unlock new opportunities from your data by creating your first data strategy.

So let’s get you started on your six steps to creating a data strategy

 

Big Data, Little Data, Your Data

More data is being collected than ever before. The world is becoming a huge hard-drive that seemingly doubles in size every year.

That is a lot of data, but what are you using it for? If you aren’t using the data you collect to grow your business then you could be missing out on a huge opportunity.

The increase in data is not just within businesses. The boom is also at a personal level. Social media and e-commerce growth has made customers are more ‘savvy’ than ever.

As a result, the challenge facing most businesses today is how to utilise the valuable data they collect every day to the benefit of both themselves and their customers.

Don’t get mislead by the Big data brigade.  It’s not the size of your data that matters, it’s what you can do with it that counts.

That means a focus on big answers from data, and creating a defined data strategy for your business.

 

What is a data strategy anyway?

According to Evan Levy – vice president of business consulting at SAS defines a data strategy as

“a roadmap and plan to identify what to do with a company’s data and to support accessing, sharing and managing the content”

Ultimately, that is what your data strategy will become, however that is a bit daunting if you are starting from the beginning.

Also it’s not as simple mapping out the data you currently collect, it’s the plan to identify what to do, that is the really important point. You need to have a direction, otherwise you’d just be creating another potentially pointless process. You want to mine the data, and turn it into golden opportunities for your business.

So if you are starting to develop a data strategy then it needs to be linked to the objectives of the business, so I’d suggest a more useful definition of a data strategy as

“how you use the data you collect to support measurable business objectives”

So where do you start.

 

Six Steps to creating a data strategy

Your data strategy will evolve as you apply it across your business. To help you get started, here is the outline of a six steps to creating data strategy for your business.

 

Step 1: Define what you want to achieve

As the old adage says, if you don’t know where you want to go, how will you know when you get there?

Dealing with data usually is detail orientated. Rather than diving into the data you have to try and figure out what you could do.

STOP and consider the bigger picture. Look to create a data strategy that links with the key objectives for your business.

Which of your current business objectives are data related?  That will give you a reference point and a measurable focus for your data strategy.

For the purpose of this post – let’s say the business objective is – increase customer retention rates by 5%

 

Step 2: What’s the business strategy?

You’ve defined what you need to achieve, now you can go a little bit deeper.

How can we increase customer retention rates by 5%?

The first question is when a customer is assumed to have lapsed? That is another blog post in itself so lets assume its 12 months after the last purchase.

The strategy to increase customer retention by 5% could be

  • Introduce recency, frequency, spend analytics to measure customer behaviour.
  • Create analytics to learn more about the profile and behaviour of customers that ‘lapse’
  • Improve the targeting of our marketing campaigns to increase spend from customers identified as ‘likely to lapse’
  • Measure the changes in behaviour from those customer targeted for ‘extra marketing’

 

Step 3: Define Your Tactics

You’ve got the objective – to increase customer retention by 5%

And, you’ve got the strategies you want to put in place.

The next stage is to create a tactical outline of what you would need to put each of these strategies into the business.  Think about what you would need rather than what you already have within the business.

Introduce recency, frequency, spend analytics to measure customer behaviour.

Introduce analytics to learn more about the profile and behaviour of customers that ‘lapse’

Create demographic profiles of customers based on…

  • all customers
  • customers that haven’t spent with the business in the last 12 months
  • customers that have spent with the business in the last 12 months

Create spend profiles of customers based on…

  • all customers
  • customers that haven’t spent with the business in the last 12 months
  • customers that have spent with the business in the last 12 months

Introduce targeted marketing campaigns to increase spend from customers identified as ‘likely to lapse’

  • Establish which marketing content has been most effective by reviewing the best performing marketing communications from the last 12 months.
  • Understand which marketing channels are currently used by the business?
  • Introduce marketing automation to manage the marketing process
  • What is the future marketing plan for the business? How could we use existing plans?

Track impacts of changes in behaviour from targeted customers

What information or reports do you need to review to understand the changes in behaviour?

 

Step 4 – Check your larder, time for a data audit

Building your data strategy is a lot like a chef creating a new recipe.  Your strategy is the recipe and the data gives you the ingredients.  Let’s see what you’ve got in your data warehouse (be that systems, spreadsheets or even paper!)

You know what you want to achieve, how you are going to achieve it, and what you need to put things into action.  Now it’s time to take stock of what you’ve already got (that is what exists within the business).

Businesses evolve over time and as businesses grow, unfortunately some bad practices become common practice.

So you need to audit how your current data practices.

Here is a typical check list

What data you are collecting?

  • Do you collect prospect data or only customer data?
  • Which data do you collect?
  • What is the format that you collect the data in?

Where are you collecting this data?

Data could be collected from a number of different places, so it’s important to understand where these places are and what data is collected at each of these places.

Regulation

Where does this data live within your business?

  • You are collecting data – in different ways from different places, but where is this data held?
  • It your data in one place or is it held across multiple systems?
  • How easy can the data be accessed, and by whom?

Data Quality

  • How often is the data updated?
  • How is the data verified?
  • Do gaps exist in the data?
  • Is the data uniformly formatted?

Marketing

  • What marketing messages do you issue and to whom?
  • What is the content of the marketing messages, how is it personalised?
  • The timing of your current marketing messages?
  • Which marketing systems do you use?
  • Which systems are used to send which message?
  • How is marketing performance measured?

Documentation

Are any of the procedures above documented?

 

Step 5 – Your data plan

The results of your data audit give you a list of actions. Actions you can address as part of your data strategy.

Break the actions into small deliverable stages and prioritise these stages starting with actions that will give you the biggest perceived business benefit.

For example, if you have identified data cleaning as a key action, then it’s pointless focusing on segmentation as the data you have isn’t trustworthy yet.

SUCCESS TIP – Make sure that responsibilities are assigned for both project delivery and ongoing requirements.  This is a long running show, not a one-off episode.

 

Step 6 – Turning your data strategy into business as usual

You now know more about the inner workings of your business.  Your data flow.  You now have a deeper understanding of the data collected by your business and whatsmore how this data can improve performance against other business objectives.

Keep doing the good stuff.  Avoid doing the stuff that doesn’t work.

 

Summary

Your business collects data every day, some of this data is needed to run the operations of your business, but not all of it.  Some of your data is never used.  It’s shelf knowledge.

Creating a data strategy links the data you collect directly to core business objectives.  Your data strategy will give you clarity on which data is necessary, which data provides opportunities and which data is unnecessary.

The six steps to creating a data strategy listed above relate to a single business objective.

The hard bit is getting started, so just get started.

Put your first data driven strategy in place and you’ll soon gather enough evidence and experienced to prove what works and what doesn’t (yes some things will fail, that’s ok).  You can evolve your data strategy from that point and address the next business objective on your list.

Overall, having a data strategy in place will help you to be more effective.  More effective with the resources your business holds, increased clarity about your customers and improved outcomes from your marketing.

We see it all the time.  Get the data strategy right and you’ll be a smarter business.

Next Steps

If you are looking for some help to create a data strategy for your business, or you are looking for the software to bring your data strategy to life, we can help schedule some time >> youcanbookme or click on the button below and try out our data driven marketing platform – the perfect tool to put your data strategy into action.

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Also published on Medium.