Data day lessons
From managing schools to election campaigns, using data effectively is ’flavour of the month’. How can SMEs make the most of their management information to better utilise internal resources and tailor its products and services?
There’s an old adage that any kind of technology is only as intelligent as the people programming, designing and producing it. Well it’s absolutely true, and the more technology develops at a pace the more things there are that can go wrong, just like a car! So just like a car, you need to make sure it’s not only well designed, but also that your technology is fit for purpose and regularly serviced and maintained. The good news is SMEs can now benefit from incredibly intuitive data applications tailored to your every business and new business development need. Understanding how these affordable smart data applications can help you can open your mind to a totally new way of running your business. So if your desired data journey from A to B is (let’s say) to acquire 10 new key clients over a 12 month period and at the same time reduce staff costs on new business acquisition by 40%, data can help you reach your destination. Here are some pointers.
The first thing to ensure is that you have intelligence in your data systems. What we mean by intelligence is that you get out the information you need, when you need it, and aren’t bombarded by meaningless, useless data you never asked for. We call this management by exception, ie: ‘tell me when something’s wrong, something hasn’t happened, something needs doing right now’ – rather than ‘tell me everything all the time.’ When applied to new business development this ‘exceptional’ approach can have a dramatic effect and can focus the mind like never before.
Design your data systems to suit you
Too many systems for data management are off the shelf and will give you ‘clunky’ results, because they were designed for a specific type of business. You deserve and in fact should demand a system that is built specifically for your business. You can then control all the parameters so that what your systems are reporting on are exactly what you need. Bespoke data systems have become surprisingly affordable, even for SMEs, so you should not necessarily rule out this option on perceived cost before seeking a quote first.
Understand what you are trying to achieve
Thoroughly review your data strategy in the overall context of your business sales and marketing plan. If you don’t have a plan - stop reading this article now, set your goals and once you have them in place, you will clearly see how a data management strategy is key to your business reaching its goals effectively.
Do you already have the customer data you want? If not, you may have to embark on a data acquisition strategy. There are experts who can help you with this but you need to be very careful who you partner with to make sure they are acting within the law and their data is not only legal, but clean and meaningful. Don’t forget, if it’s too good to be true, it probably is
Before we get carried away with exciting new business plans, we need to ensure we don’t get into any hot water, so we firstly have to understand how and where all this data may be stored.
There are essentially three hierarchies of data storage: Physical, Near-Line, and Offline. As the data holder, your responsibilities for all three hierarchies of data are the same, so it’s no good exercising exceptional housekeeping regimes for your physical servers if you have multiple external storage devices that are not completely secure and correctly managed.
Data Protection and the 1998 Act
Data protection and the accompanying act which was originally passed through Parliament in 1998 and is now centrally governed by the ICO (Information Commissioner’s Office). Whilst often perceived as complex, the Act itself mainly consists of eight core principles. If you hold and process information about your customers, employees or suppliers in order to perform your business activity, you are classified as a “data controller” and must notify the ICO accordingly.
Don’t be put off by the Act as data is literally `black gold` - just remember in the words of the famous French philosopher, Voltaire (and not Uncle Ben from Spiderman), “..With great power comes great responsibility”
Mine your data and refine your parameters constantly
A static list of contacts is only valuable to a point. But if through your new business review meetings you happen upon the fact that certain types of client respond well to a particular type of networking event or social engagement, you can not only plan all this into your data management – you can then control their communications preferences. Does the potential customer like to receive texts? If the answer is yes and you are bombarding them with emails that are never opened, shouldn’t you be sending texts? You can integrate that into your data systems and send them a text when you want to invite them to an event. Refine your data parameters on what works, not for anybody else, but for you.
By feeding back key responses and customer behaviours into your data model, you can start to actually predict what kinds of customers you are going to work well with and have mutually beneficial relationships with. It will enable you to devise products and services that are being demanded by customers, rather than the ones you think they should buy from you.
Bulk e-mail marketing mayalready have peaked as a meaningful sales tool, for all but the largest of consumer brands. If you have millions of customers and prospects and your business is a consumer numbers game – selling bottles of wine; cheap flights; online gifts etc, email marketing can still be incredibly cost-effective. If however you are a much smaller player than the Amazons, EasyJets and ASDAs, you need to use email marketing more intelligently as a retention and client relationship building tool.
The problem with that? When the FD asks to see the numbers - how many new customers did we get from that email about our networking event?…the answer is invariably zero. But it is not zero value activity, far from it. You have used the networking event to build long term relationships – so in that scenario the success of the email should be judged by the numbers attending the networking event, not the direct sales.
Reaping the benefits
If you follow these rules and tips, you are well on the way to a robust and financially rewarding data management strategy. If you feel at the moment you have lots of Excel spreadsheets held by numerous different departments and individuals, you may have had bad experiences of utilising data and may not yet realise its true worth and potential. If on the other hand you now have a well thought through business plan, and a data strategy to underpin it, the world is your oyster.
Best (and worst) practice
As you’d expect, the major consumer brands like Orange, Virgin and Sainsbury’s perform data aggregation exceptionally well and use customer data to astonishing effect. Without it they would be lost, their entire business strategy is built around knowing its customers - some would say better than the customer knows themselves. Monitoring weather conditions, regional and local events and even what’s on the television will influence marketing activity, stock ordering and staffing levels. When matched to accurate customer data you can start to see why this is the most powerful business tool ever created.
Understanding how legitimate, ethically managed data can benefit your business should be a ‘must do’ management task – not for next year but for today. And if you’re not already actively engaged in structured data strategies to support business development programmes, you may be missing a trick.
Summary – Dos and Don’ts
1) Do plan and document your data strategy
2) Do make sure your data is legal, up-to-date and secure
3) Don’t panic into buying cheap email lists that may be illegal and useless. If it looks too good (and too cheap) to be true….!
4) Do ensure your data strategy directly ties into overall business goals for marketing and new business development.
5) Do take your role as a data custodian extremely seriously.
6) Don’t assume that bespoke data management software for SMEs will be unaffordable; there are providers who will share the financial risk with you and effectively provide you with a bespoke ‘pay as you go’ model on business process management solutions whether you want to handle volume processes or effectively use data to grow your business.
Mark Colonnese, Director