One of the most frequently cited challenges voiced by business leaders is ‘Which data should we be using?’ With torrents of data streaming into organizations, knowing which data sets are best suited to address a pressing business problem or yield compelling insights into customer or market trends can represent a real conundrum.
A good way to address these challenges is by taking a test, learn, and optimize approach to using big data. As we noted in a recent post which highlighted an article by McKinsey & Company’s David Edelman, companies can start out with small-scale pilots in a restricted geography, across a specific segment of customers, and with a few products. Doing so can enable organizational teams to tackle key questions, such as ‘What are the challenges?’ and ‘Are there policies that will have to be navigated?’
By identifying the top business or operational goals the company is attempting to achieve, the chances are greater that the best and most relevant data sets will be used to address any issues to reach these goals.
In a separate article, McKinsey points to a company in the chemicals industry that decided to examine market share within customer industry segments in specific U.S. counties instead of looking at current sales by region as they’d always done. The micro market analysis revealed that although the company had 20 percent of the overall market, it commanded up to 60 percent of share in some markets and as little as 10 percent in others.
The insights revealed by this test presented an opening for business leaders at the chemical company to dig deeper into the data to determine whether there were unexplored opportunities to increase market share in some of the regions where the company was under-represented.
Experimentation can also include data sampling. For instance, a men’s fashion retailer that has historically marketed clothing to 35-to-49 year olds may discover through data sampling that its fastest-growing customer segment is urban professionals in the 22-to-34 range. Business leaders for the retailer can dig deeper on the attitudes, preferences, needs, and transactional behavior of this customer segment to help identify as-yet unmet sales and marketing opportunities with this group.