There’s been an expression used in the media in recent years: “ Data is the new oil.” This refers to the fact that companies seeking to innovate run on user data. How would they improve the product or service and compete with others without it? That’s the entire purpose. Operating without data is like going into a sword fight blindfolded.
That being said, data needs to be of a certain quality to be of any use.
Good quality data has five characteristics:
Relevance is the degree of importance the information has.
Accuracy ensures all data received and analyzed is correct.
Completeness refers to having all of the necessary information available.
Timeliness refers to how recently a data point was collected. The older the data, the stronger likelihood that it’s not as relevant.
Reliability is the sum of all other points. If it’s not reasonably trustworthy, the data has no real use. In fact, it could potentially damage the reputation of a firm.
Before businesses even start collecting data, they should come to a reasonable conclusion of what their customers’ most valuable data points are. Only then should predictive analytics, chatbots, and other capabilities be tested.
But, once done correctly, businesses can start compiling large quantities of data, leading to customer success. Inferring probabilities about loyalty and spending and improving existing products and services is just the start. The real purpose is not only to prevent firms from failing but to improve the quality of the business. More efficient end-to-end channels and personalized customer experience are just an added plus.
Businesses shouldn’t be taking shots in the dark with social media ad campaigns and hoping for the best. They need to utilize data and AI to advertise products using omnichannel personalization to find customers who may genuinely be interested.