Create value for your customers with your data and the rest will fall behind it

We are in the third age of data. The first was full of preparing data with legacy data warehouses that struggled to provide value beyond surfacing reports about the past. The second was preoccupied with loading data into data lakes. The third needs to be built on outcomes that we are trying to achieve. Not outcomes just built on “reporting the news” but outcomes based on prediction, prescription, and insights that lead to value. But value for whom? Are we still just trying to create awareness or efficiencies in our own business, or are we thinking instead about the outcomes we can drive in our customers? That is the key to truly creating meaningful data results.

Imagine a scenario where your company provides a distributed product for a set of stores. Those stores leverage your product to sell groups of products that make up an outcome. This could be a restaurant, a hardware store, or a medical facility. In any of these cases your product is a critical part to their ability to serve their diners, customers, or patients. However, how do you look at your product? You think about your own cost of delivery, your inventory, your supply chain and seek opportunities to drive efficiency. You seek areas where AI can provide value operationally. That isn’t wrong… it’s just short sided. The goal can be much more than operational savings.

The most significant value from data is to create value in your customers. Along the way you might solve internal operational problems but if you keep your focus on the end result of the customer the outcomes will be far more powerful. For instance, imagine the scenario of a food distributor. You know everything about the restaurants you serve. You know when they order, what they order, and when they have large stocks they can’t move. That insight can be used to proactively engage your customers to create a more sustainable relationship by optimizing what they buy and automatically re-filling critical inventory at the right times. This focus puts the customer’s need first, creates a stronger partnership, and adjacently improves the efficiency of your operations.

Now, let’s take it a step further. What does a restaurant food provider know about aggregately? It knows what makes a successful restaurant, what makes a struggling one, and has data on the top quartile of performance. The restaurant distribution business is very low margin but what if the distributor could sell a new high margin product? That product is prescriptive guidance to lead the restaurants they serve toward the top quartile. What if by leveraging that information more restaurants were able to stay in business and perform at their best? What if more restaurants could use the aggregate information to make better choices? This increases the success of the customer and creates a stronger partnership and likely the ability to increase revenue through a premium service. The premium service accompanies the legacy service, building strength on strength.

What is preventing your company from pursuing such a capability? Is it lack of data? Is it lack of AI talent? Maybe, but the biggest gap I’ve seen is the inability of most businesses to think from the vantage point of the customer’s business. Most companies are so pre-occupied with their own product that they never stop to think about the effectiveness of their customers. Your data is the key to making this real but only if you take a perspective of the possible future for your customers and the relationship between that possible future and your capabilities.

All of this is to paint the picture that every business can disrupt its market by thinking about the needs of the customer vs. their own. Even more, thinking about the outcomes that can be driven by true partnership with the customer and by leveraging data as a value engine. This week think about how your organization can leverage its data to improve just one part of your customer relationships. It might be surfacing “ability to promise” for critical customers. It might be “best practices” or “next best action” based on what you know about the customer’s business as a whole. It might be “finding themes that are unintuitive but useful for production decisions. It might be modeling possible futures based on investment decisions.

We have an amazing opportunity to leverage data to improve the meaningfulness of our organizations with the customers we serve. Think about not only the mission of your business but also the mission of your customer’s businesses. With that focus every business becomes more capable and focused on creating meaningful outcomes and creatively driving success that is complementary.

Nathan Lasnoski