As you’ve probably figured out by now, we’re huge proponents of the value of investing in data analytics. Good data can help you develop new products that your customers want and need, maximize revenue on your existing offerings, boost recurring revenue, and identify and tweak any approaches that may not be working.
Two recent major acquisitions underscore the importance of data analytics. In June, Google’s parent company, Alphabet, acquired data analytics company Looker for $2.6 billion. It represents the third largest acquisition ever for the tech giant. The following week, Salesforce announced their $15.3 billion acquisition of another data analytics company, Tableau.
Coincidence? Not at All.
Why did these two titans of the tech industry decide to make major acquisitions of data analytics companies, just days apart?
It speaks to the larger trend towards data analytics across all industries. In today’s digital world, companies have the power to access more data about their customers and consumers at large than ever before. People live their lives online, and if companies are so inclined, they can learn an incredible amount about those people based on their online behaviors and decisions.
By collecting and then analyzing that data, companies can make smarter decisions about where they go next and are able to identify issues quickly and pivot rapidly when things aren’t working.
What it Means
What the two deals have in common is that they are both strategically driven. Neither data analytics company falls squarely within the central operations of the acquiring companies. However, there are clear benefits to Alphabet and to a CRM platform like Salesforce being able to better manage, organize, and understand data.
Seeking Alpha compares Salesforce’s acquisition to Facebook’s decision to acquire Instagram back in 2012. At the time, stakeholders were skeptical and unhappy with the hefty price tag. However, Facebook was confident that the deal was a good one; they saw the value of the sister social network and understood how Instagram’s offerings could complement their own. Turns out they were right, and now with Instagram valued independently at $100 billion, Facebook is laughing all the way to the proverbial and literal bank.
What Can You Do to Invest In Data?
Chances are, your company doesn’t have a spare $15 billion lying around for an acquisition of this scale. But that doesn’t mean you’re frozen out of the data analytics game. There are some simple steps that any business can take to invest in data analytics—some at little to no cost—to put data to work for you.
Start with a Dashboard
Hopefully, you’re already collecting some data on your business. Whether that’s tracking click-through rate on marketing emails, staying on top of website trends with Google Analytics, or using a social media platform’s business account features to watch engagement on your pages, it’s easy to get your hands on free data about your business.
From there, you want to bring the most relevant data together in a dashboard. That doesn’t mean collecting every data set under the sun and poring through page after page of figures each month. Instead, it’s about selecting the most important seven to nine metrics for your business and focusing on where those stand each month.
The metrics that you choose to track should be the ones that are best positioned to alert you to a problem. That means you can probably forget tracking the number of Facebook likes your business received and instead focus on things like subscription retention rate.
The great thing about dashboards is that they don’t have to be fancy. Yes, it’s possible to invest in a really robust dashboard reporting system, but you can also tap someone on your team to pull relevant data together into a spreadsheet each month. This means that any business, regardless of size or budget, can begin to take advantage of the data at hand.
Consider a Customer Data Platform
If you have a bit more budget to spend on data analytics, you might want to consider implementing a Customer Data Platform (CDP). These tools are designed to collect data on anyone who interacts with your business—existing customer or not—and to house all of that data in one place.
As you know, the digital landscape means that you can collect data from dozens of sources: your website, emails, multiple social media channels, phone inquiries, in-person interactions if you own a brick-and-mortar business—the list is lengthy. And with all of those potential data sources, it’s very difficult for a human to track them all on their own.
CDPs make it easy to collect and analyze the data all in one place, and if you have the budget to incorporate one in your business, they’re well worth the investment. If you’d like more tips on selecting the best CDP for your needs, take a look at this article from our archives.
Hire the Right People
A longer term investment in the digital game has to do with the team you surround yourself with. The digital, data-driven landscape has changed so much in the past few years, and it’s only going to continue to do so at a rapid pace.
Hiring a top-notch staff is not just about finding those who are up on the latest technology, because what’s new today will be old before you know it. Seeking out a digitally-savvy team is more about identifying people who are forward looking, with the intellectual curiosity, technological know-how, and business acumen to predict the latest trends before they happen.
Of course, adding to your headcount is a costly endeavor and one that shouldn’t be undertaken lightly. If you are considering an expansion of your team, these tips on hiring for digital can help guide your interview process.
While you likely won’t be investing in data analytics on the same scale as an Alphabet or Salesforce, their recent acquisitions there should tell you about the importance of focusing on data in your own way. Whether it’s making the first, low-cost steps to taking ownership of your data or spending a bit on a bigger technology product that can help you better understand consumers and identify opportunities, now is the time to invest in data before you’re left behind.
About the Sterling Woods Group, LLC
The Sterling Woods Group’s mission is to help clients make sense of their data to build deeper relationships with their best customers, launch new products and membership programs, and execute smarter marketing strategies.
We use a hypothesis-driven, data supported methodology to discover your “spin”—a simple insight that no one else is paying attention to. Then, we help you assemble the right technologies, marketing plans, and resources to seize this opportunity.
About the Author
Rob Ristagno, founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Throughout his career, his focus has been on embracing technology and analytics to spur strategic development and growth.
At the Sterling Woods Group, he and the team are passionate about helping clients understand their best customers through data, and developing products and membership programs that exceed expectations – and generate impressive revenues.
Committed to spreading this message, Rob is the author of A Member is Worth a Thousand Visitors and is a regular keynote speaker at conferences around the world. He has been featured on ABC, NBC, CBS, Fox, and Digiday.
He holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.