How to monetize data using business intelligence
There are many definitions of ‘data monetization’. For the sake of this article, we’ll refer to data monetization as “using data to drive revenue”.
The foundational step in creating a great product is understanding your customers. And the best way to understand them is by tracking their actions, interactions, and transactions.
Today, companies are increasingly collecting data about users’ actions on their websites, apps, social media channels, and other touchpoints with their consumers. This data can be used to understand how your users are engaging with your site or product thereby driving more revenue through offering better solutions.
Read on to learn more about monetizing data effectively using business intelligence and practical examples to inspire your organization to be more strategic with data.
The monetization of big data
When it comes to the “Big Three” of big data—volume, velocity, and variety—many business leaders focus on volume and velocity. However, variety is just as important—you need to understand not only what happened in the past but how your users are actually interacting with your product, so you can continually optimize for better results.
Many companies are struggling to monetize their data because they don’t have the tools to do it at scale or in a reasonable amount of time.
For example, many companies will use key performance indicators (KPIs) with pre-calculated revenue numbers and then track their ad revenue from clicks, views, and purchases. Then they use this information to make decisions on their product roadmap and marketing investments.
Many companies find that this ad-hoc approach doesn’t work anymore because the data is coming in too fast for pre-calculated reports to be helpful, or it just takes too long to perform these calculations.
With the help of business intelligence (BI), companies can monetize data by creating dashboards, visualizations, and reports around their customers’ purchasing trends, how much revenue they bring in from individual advertising channels, which sources are performing better than others, what activities increase engagement, and more.
These insights let marketers experiment quickly, leading to smarter decisions that ultimately boost revenue.
How business intelligence can increase revenue
Data analytics is a powerful way for companies to understand what is happening in the market, with competitors and in-house. And with this intelligence, they can create offerings that are tailored to their consumer base. This leads to happier customers and greater sales.
Using BI to monetize data lets you track what’s happening with your customers at scale–and it can be done in an automated and scalable way.
Business intelligence tools are designed to analyze the data generated by your website or app and quickly provide meaningful insights into how users interact with your business. Companies using BI usually know a lot about their users. They can tell you how engaged a user is, what they’re interested in, and the actions they typically take while using your product. Still, it’s difficult to know how to improve without visibility into why those actions are happening.
BI lets companies track customer behavior as it happens so that analytics can be included in major business decisions like product development and marketing strategies. With this, businesses can begin to understand the ‘why’ behind these actions.
For example, you can track the profitability of different customers who come to your site by what they buy and how much revenue they generate per year or month. In a subscription-based model this is known as lifetime value (LTV). This is a huge factor in figuring out which customers warrant more resources and attention. When companies understand average customer LTV, they can determine how much they’re willing to spend to acquire each customer.
With BI solutions, you can track different metrics and measurements related to your users, such as:
- How many of them convert to paying customers, or how much revenue do they generate?
- Which sources are bringing the best customers in (and at what price)?
- Who is more engaged with your product, and which types of users are most profitable?
- How many people typically watch a video, download an app, share on social media, buy something or visit your site?
- How many people are using a specific feature of your product?
- What is the average amount spent by customers of each type, and which segments spend more than others?
- Which features are most popular with different types of users?
- Are your monthly/weekly active users (MAUs/WAUs) growing or declining
As you can see, there are many different questions that BI tools help companies answer about their users. And the more insight you have into the data, the more accurate your business decisions will be.
Practical methods to monetize data with business intelligence
In short, there are two main approaches to monetizing data with BI: creating new revenue streams and improving existing ones.
Method 1: Create new revenue streams
Companies use data analytics to try to increase revenue in many ways. The most common way is by finding new customers or creating additional sales from existing ones. Other examples include:
- Creating a new product/feature using customer feedback and observations from data.
- Asking for an additional purchase to gain access to premium features.
- Upselling customers on new products or services they hadn’t thought of before.
- Using data to create coupons, discounts, or other offers that amount to more revenue than they cost.
Method 2: Improve existing revenue streams
Another way to monetize data is to use it to improve your current revenue streams. There are also many different ways to do this, but the most common include:
Targeting Ads More Effectively
It’s no secret that advertisers want their money spent well and targeted at the right people. Using customer data in conjunction with Google Analytics can help you figure out which pages are receiving the most attention and where to advertise.
Finding Ways to Increase Revenue-per-Customer
One of the best ways to boost revenue is having customers who purchase more or simply spend more on an annual basis thereby increasing (LTV). This activity is often referred to as “up-selling”. A customer-focused BI dashboard helps you discover the types of users that are more likely to spend more or make bigger purchases.
For example, suppose you discovered that people who use your product every day are also the ones buying premium subscriptions. In that case, you could target them with an ad suggesting they upgrade their account–this is a great way to boost revenue!
Improving Customer Service
Through data integration, BI solutions can track user behaviors from multiple data sources and monitor metrics for each user demographic. When you can drill into the data by every customer persona, you can begin making very specific sales and marketing decisions that will enhance your data monetization options.
Monetize data strategically to gain the most value
To create a successful BI strategy, you must think about how all of your customers interact with your product and what they are doing at each stage of the customer journey.
The more insight you have into your users’ behavior, the better equipped you are to put together a strategy that resonates with each individual customer. The more clarity and insight you have about each customer, the better equipped you will be to make strategic decisions regarding the upsell and renewal activities you should use with them.
Domo business intelligence makes it easy for anyone to gather customer feedback quickly and easily by integrating different sources–and leveraging information–into one powerful dashboard. This helps companies better understand their customer base which puts them in a better position for growth through renewal and upsell. Speak to a Domo solutions consultant today for a demo of effective data monetization with modern BI.