Growth in the digital space is emerging as a top priority in today’s business world. Businesses are finding more ways to use their data to generate new opportunities. Keeping up with these changes can mean new methods for success and improvement, while not doing so can mean falling behind your competitors. One method of digital growth, data monetization, leverages data and analytics in your product to drive revenue.
Competitive businesses drive their data monetization effort with two main strategies - Indirect and direct data monetization. Indirect data monetization uses embedded analytics to increase the monetary value of parts of the product life cycle. With direct data monetization, customers are charged for access to data and data features, generating revenue streams. Combined strategies of using both types of data monetization can generate even more revenue.
It is essential that your organization uses a data monetization strategy that fits the organization's product, strategy, and technology stack. Below are some important considerations regarding this decision:
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Product Lifecycle - Organizations should assess the maturity of their products and how the products will leverage data-driven features
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Customer Experience - Organizations need to evaluate the customer’s perspective or capture metrics that can predict customer engagement with data-monetized features. As an example, a business may examine service report tickets for common requests, and solve the common problem with a data-driven approach.
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Regulations/Compliance - Organizations should value data and understand privacy regulations before determining a monetization strategy.
Organizations can follow best practices to optimize their data monetization projects. As a rule of thumb, organizations should keep their initial analysis simple with systems and processes that integrate easily with their products. This will allow the organization to gain customer feedback and understand the direction the data monetization project will go.
Businesses need to define their data’s value and determine if their current data will suffice for their ideal product. For example, begin backward by asking the question - What are the minimum data requirements to build this solution? If current data does not suffice for an MVP, then the business should integrate new data experiences and involve their customers to collect the necessary data.
Careful analysis of the data monetization approach that will work with your business will result in increased revenue and maintained customer satisfaction. Navigating through not only the initial phases of data discovery but also through the implementation of a data monetization strategy is very complicated but rewarding. Aptimized is a certified Google partner experienced in this niche space. Navigating where to start is tough and I am always excited to discuss this topic with business leaders anywhere. Let’s connect!
- Bill Mills
Aptimized CEO