B2B COMPANIES NEED SMART DATA NOT BIG DATA
Access to data has arrived in B2B but companies need a data strategy to turn it into a smart, effective tool.
Access to customer data has arrived in B2B.[i] The Internet of Things (IoT), AI, robotics, and digital automation have created an explosion of data throughout the value chain. Intermediaries such as hospitals, farm cooperatives and commercial brokers no longer have a monopoly on customer data. Common data-sharing standards, application programming interfaces (APIs), and the growing exchange of customer data are reducing the balkanization of data in B2B. Customer data that historically resided in discrete databases or paper files under the control of individual participants in the supply chain is now widely available.
Broader data access is accelerating quickly.[ii] The ability to migrate customer data to the cloud is breaking down legacy system silos that made it difficult to build rich customer profiles. In healthcare and financial services, data aggregators are emerging, bundling data within and across enterprises to provide a more complete view of the customer. As more elements of the B2B buying and ownership experience move online, customer shopping and use data is becoming available for the very first time.
Customer data is the foundation for successful digital transformation. But using customer data effectively has proven challenging for B2B companies. There are so many types, sources, and uses of customer data that companies become overwhelmed.
The Big Data Myth
One of the most common myths to which companies succumb is believing that collecting lots of data is the lynchpin to its effective use – they become obsessed with big data. Focus on acquiring and assembling data and building systems to store and manage it takes precedence over thinking through how data will be used to enhance the work customers are trying to perform.
Smart data on the other hand begins with thinking about how customer information will be applied. Use cases for making the customer experience better dictate how it is collected, and not the other way around. Discerning how richer data might improve or remake a customer experience and then finding ways to obtain and deploy that data becomes the prerequisite for investing in data and analytical capabilities. Smart-data companies connect market-facing functions (sales, customer service, call centers, and marketing) to those functions responsible for managing customer data (internal IT, data teams, and systems support) so that the two can collaborate.
A Customer Data Strategy is Crucial
Companies that have the foresight to look ahead to create and implement a customer data strategy based on smart data are able to transform more quickly and more effectively. They use smart data to uncover insights and turn them into action. In B2B, particularly in intermediated categories, a formal data strategy was rarely needed. The sales team or intermediaries would collect most customer data and use it for most customer interactions without sharing it broadly with the rest of the company. B2B companies would occasionally supplement the intelligence they received from their sales teams and intermediaries with field visits by headquarter staff and periodic market research.
B2B companies seeking to utilize customer data more effectively (which ought to be nearly every B2B company) will benefit by implementing a data strategy. The benefit, moreover, will be immediate. They will develop capabilities and skills in smart data collection, management, analysis, and deployment—capabilities essential for future growth and competitiveness.
In The Definitive Guide to B2B Digital Transformation we describe what it takes to build a data strategy step-by-step by:
Taking inventory and connecting existing data
Identifying customer data requirements
Filling crucial customer data gaps
Assembling the customer engagement stack
Charting a data roadmap
To learn more about the The Definitive guide visit our resource hub for B2B transformation leaders at www.b2bdigitaltransformation.com
[i] Eric Almquist, “How Digital Natives Are Changing B2B Purchasing,” hbr.org, March 14, 2018, https://hbr.org/2018/03/how-digital-natives-are-changing-b2b-purchasing; Sam Del Rowe, “Buyer Enablement Is the Key to B2B Sales: Much of the Sales Process Happens Before Sales Reps Get Involved,” CRM Magazine 22, no. 8 (October 2018).
[ii] Stephen Kudyba and Thomas Davenport, “Machine Learning Can Help B2B Firms Learn More about Their Customers,” hbr.org, January 19, 2018, https://hbr.org/2018/01/machine-learning-can-help-b2b-firms-learn-more-about-their-customers; Rob Markey, “Run B2B Sales on Data, Not Hunches,” hbr.org, September 12, 2016, https://hbr.org/2016/09/run-b2b-sales-on-data-not-hunches.