When it comes to monetizing your enterprise’s data, there’s one dichotomy that needs to be understood above all others. Essentially, there are two basic ways for organizations to monetize data: internally or externally. Internal monetization is the more commonly understood variety. This is where an organization uses their data and business intelligence technologies to make operations more efficient.
It makes sense for just about every kind of business or agency to use internal data monetization strategies. Otherwise, money is simply being wasted. External data monetization, however, is a relatively new opportunity for many enterprises. Monetizing data externally means selling organizational data itself, either in its raw form or through analytics tools, to other businesses or groups. This second form is exciting, as it allows corporations to get increasingly creative with how they use and leverage their data for novel revenue streams. These are a few ways you can start using analytics to monetize your data, both through internal and external approaches.
Identify Opportunities for Greater Efficiency
Probably the most obvious way to monetize your data through analytics is by using business intelligence technologies to identify ways to improve operating efficiencies. Just about every organization should be leveraging their data analytics in this way, or else they’re almost certainly leaving money on the table.
By using business intelligence technologies to track internal operating efficiency, enterprises can improve upon key performance metrics (KPIs) across the board. The gradual refinement of these metrics can lead to long-term monetization of data by organizations. There are many different KPIs that can prove to be useful, but every group will want to focus on those that are most specific to their situation. Furthermore, it can pay off to spend additional time honing in on the KPIs that can best maximize monetization of data. These are a couple that can work well for this purpose:
- Conversion Rate – Conversions is an essential metric to measure when you’re trying to determine the effectiveness of online marketing campaigns. A low conversion rate means something is stopping people from going all the way through the sales funnel despite having some degree of interest. A poor conversion rate means businesses can end up spending a lot of money without getting a particularly great return on investment. Improving conversion rates can be one of the easiest ways to monetize data.
- Customer Lifetime Value – As the name implies, customer lifetime value is the metric that explains the monetary value of an individual customer to a business over their entire relationship. Using data to find ways to boost lifetime value can vastly improve an organization’s bottom line.
Now that you have a few concrete examples for how analytics can be used to monetize data internally, it’s time to look in detail at some external examples.
Embedded Analytics as a Product
The ability to externally monetize data is a new phenomenon, thanks in large part to advances in business intelligence technologies. There are two main ways enterprises can accomplish this: through selling their raw data, or by selling in in the form of an embeddable analytics product.
The first instance is more obvious. As organizations collect data, it will eventually start having value to other groups. For instance, a logistics company might have data sets that would be particularly useful for an ecommerce company. They could then sell them that data to use for their own analysis.
The second option is more evolved, and offers a unique new way for external data monetization. An organization can create an application that uses their data, which can then be sold to external organizations. This is approach is interesting because it can create a new, or even passive, revenue streams that can be easily replicated based on third-party needs.
Data is everywhere. The enterprises that embrace this fact and monetize it, both internally and externally, will have a leg up on their competition.
