Data investments can be in the millions of dollars for organizations. ROI requires using it wisely — here’s how:
If you’re like most organizations, you are purchasing more data than ever before, sometimes making decisions on what to purchase without creating necessary standards on when or how to use it to your advantage, but proudly adding it to the portfolio of data that your organization now has access to.
Are you maximizing big data? Read on to discover the 4 requirements for Retailers and Suppliers / Manufacturers to maximize data investments.
REQUIREMENT #1: RIGHT DATA (output = data)
Your first requirement is obviously data – but the right data – including a combination of retail point of sale data, syndicated data (including market data and key account data), panel data, transactional and loyalty card data, retail audit data, etc. For anyone who has owned a data budget before, choosing the right data sources and options while balancing your data budget can be a difficult task, particularly when you consider continually increasing data costs and requirements, and a flat or declining data budget. When choosing the data sources that you'll invest in, you should understand the standards, best practices and processes within your organization, including when & how to use the data to make decisions.
REQUIREMENT #2: RIGHT ACCESS (output = information)
Once you’ve determined the best data to purchase based on your specific needs and priorities, you need to decide how to make it accessible to your organization. The data needs to be easily accessible to all functions / departments in the organization, including category management, sales, retail operations and marketing.
DON’T LIMIT ACCESS TO DATA TO ONLY A FEW DEPARTMENTS!
Some organizations invest in several different tools to access different data sources, while others opt to invest in a single front-end solution to view multiple data sources at once. This decision is important because you want to have tools that are easy enough for individuals of different levels of knowledge to use, but flexible enough to allow individuals to drill deeper into the data to get more advanced insights.
In many cases, this data access comes at an additional cost to the data investment. Each tool or software usually includes technical training on the “point and clicks” required to properly pull the data. Don’t mistake this tactical/technical training as a replacement for category management training.
Once an organization has effective access to the data, they are now providing information to their organization through reports and data pulls.
REQUIREMENT #3: RIGHT TRAINING (output = knowledge)
Technical “point & click” training mentioned above only provides a means to effectively pull the data. But learning how to pull data, understand key measures and draw observations from a report only scratches the surface of the skills required for individuals to be effective in many different roles.
Following, are 2 Skill Development Areas where, in general, individuals need improvement:
- Strategic Insights: Many are good at the “what” due to the tactical training provided by data and software purchases. Individuals can make many observations based on a table of information. But the “so what” and “now what” are often lacking or completely missing. Lack of strategic insight turns a category review or business review into a frenzy of observations that don’t have underpinning strategies woven through the insights or actions.
Opportunity: Build skills in critical thinking and strategic understanding with category management training. Effective training helps fill in the “so what”, which can then result in “now what” recommendations or decisions that match well with overall strategies.
- Presentation & Storytelling: Imagine creating an incredible category review or business review that includes analysis with compelling, fact-based insights (from Skill Development Opportunity #2 above). But when the review is presented, it lacks the visuals, logic and flow and/or relevancy for the target audience. Or it includes data that distracts from some of the key ideas and opportunities. Or it fails to provide direction on how to “fix” a problem or provide solutions to help turn around the business issue. Strong presentation skills, including the development and delivery of presentations, are essential. Too often, great ideas get lost in a poorly developed or delivered presentation.
Opportunity: Build skills in presentations, fact-based selling and storytelling. For category management professionals, this may require developing a whole new skill set. Even if category management individuals aren’t delivering the presentations, they are usually the ones that are developing the story for others to tell. For sales, individuals most likely have storytelling or presentation skills, but they may lack the “fact-based” approach and/or not feel comfortable with the data.
CMKG has worked with hundreds of companies to assess individuals’ knowledge and skills. Category management training provides an incredible foundation to help teams improve data usage and make better fact-based decisions and recommendations. Arming your team with these skills helps them to perform more efficiently and effectively in their roles and costs pennies compared to data and technology investments. Equally importantly, training aligns the strategic approach for your organization, resulting in a larger return on investment for your data purchase.
REQUIREMENT #4: RIGHT ANALYSIS (output = wisdom)
If you’ve mastered the first 3 requirements, the fourth comes almost automatically. Once your organization purchases the right data, gives broad access to the data through front-end systems and receives the right training, it moves the whole organization forward in a strategic direction. Some of the basic analytic work once held by the category management team becomes a core capability in other functions and makes a fact-based approach resonate throughout the organization.
As you continue to move forward, the category management team will evolve some of their work to include more advanced analytics that focus on Shopper, big data and the omni-channel. This collaborative, strategic approach ultimately results in increased return on investment for the data dollars spent and builds competitive advantage.
In summary, there’s an opportunity to increase return on your data investment by allocating some portion of your budget to category management training.
If you allocate 100% of your budget to data, all you are providing to your organization is data, not the ability to use it effectively and strategically toward your goals. Category management training builds knowledge in your organization way beyond “point & click” training and helps align and inform strategic decisionmaking.
Want to learn more about improving Data ROI and budget allocation? Download our infographic, “How to Increase ROI on your Data Investment.”