Grow your business through monetizing data

The relevance of data in today’s business is striking. Many modern organizations collect, process, and monetize data. With accurate data, Dow Chemicals grew its site consumption by 25% from 2015 to 2018.

In a nutshell, data monetization is using data to grow revenue. It is the key to many successful and fast-growing companies today. There are two ways to monetize data: directly and indirectly.

What is direct data monetization?

When companies sell direct access to their data to a third-party company, it is called direct data monetization. There are two ways in which you can sell data. First, companies can sell data in its raw form without processing. Second, they can sell processed data in the form of insights and analysis.

What is indirect data monetization?

Indirect monetization is a little more complex. First, you’ll want to carefully study your company’s data to understand how to improve your business performance. Data provides information about consumer behavior and ways to market to customers. Data can also help you know how best to drive sales, save costs, rationalize operations and reduce risks. Implementing these actionable insights discovered through the data analysis process can result in increased sales, which ultimately gains monetary value from data. This is a slower and less-obvious approach to data monetization, but it can still be very effective.

The four phases of data monetization

Data monetization generally happens in four phases:

• The reactive phase
• The descriptive phase
• The diagnostic phase
• The proactive phase

Each phase is essential for the result you will achieve when you monetize data.

The reactive phase

In this phase, the company gathers data on how its customers utilize its products. At this stage, the company does not engage its customers using the data they collect. It only serves as an information stage where the company tries to identify the problems. Understanding the problem triggers the next phase—the descriptive phase of analytics.

The descriptive phase

In this phase, the company tries to better understand various business challenges by analyzing the data that’s been collected. The descriptive/analysis phase utilizes data visualization to compare metrics across different variables. Data visualization helps you gain a better understanding of customer trends and patterns. You will also gain more insight into the current status quo, understand the areas with problems, and know where to direct more attention.

The diagnostic phase

With a deeper understanding of the value of your data, sharing it with clients is the next natural step. In the diagnostic phase, companies begin to seek the most valuable way to monetize data. The biggest question in this phase is whether companies should monetize their data directly or indirectly.

Proactive phase

The proactive phase is the action phase. After collecting data, analyzing it to uncover insights, and choosing the type of monetization approach, the next step is how to implement the data to generate revenue. Hence, in this phase, companies make a detailed plan of how they will go about the data monetization process.

Tips for optimal data monetization

Monetizing data can seem overwhelming at first. This section contains a few straightforward tips about how to effectively monetize data.

Seek information you can aggregate

If you choose to directly monetize data, then you probably have data that your customers could benefit from exploring. You can increase the desirability of your data by performing aggregate calculations on some columns to create additional valuable fields. While this is something your customers could do themselves, they’ll be drawn to the data that already has these types of calculations done.

Enhance data personalization

Personalizing your data makes it preferable to your clients. Consider including external data like geographic data, weather information, or demographics to make your data more thorough and personalized.

Pay attention to customers’ demands

As with any aspect of business, listening to your customers is very important. Providing them with what they want will help you create a lasting relationship with them. These types of relationships are one way that companies obtain long-term success.

The benefits of data monetization for an organization

When you monetize data in your organization, you extract the most value from your data. Some of the benefits you enjoy when you monetize data in your organization include the following:

• It provides a better understanding of your customers
• It helps you optimize the use of data
• It helps to enhance data sharing between internal and external investors
• It helps to reduce operating costs by cutting down unnecessary risks
• It helps to reinforce customer loyalty by improving user experience
• It provides you with the necessary information to improve product quality
• It helps you to improve partnerships and enhance collaboration
• It gives you an edge over your competitors
• It provides an additional way to increase revenue.

Conclusion

The underlying factor is that today, many businesses require accurate data to grow. Data monetization provides this essential data to organizations that are seeking it. Hence, when you monetize data, you provide others with insider information that they can use to improve operations and grow their business. In return, you earn revenue and gain better insight into your customers’ needs. With the right data monetization strategy, you can greatly increase revenue for a fraction of the cost.