In business today, data has become a competitive advantage and a necessary component of product development. The influence of data on the process of product development is easily seen in every industry. While in an earlier decade data scarcity forced iteration based on gut feeling or unreliable and often outdated information ("I feel this ad film will work"; "I believe there is a gap in the market this product will fill"), now, organisation of data into insights is helping drive actionable business decisions in real time ("user feedback shows the product needs a tweak"; "reader feedback suggests people find the communication offensive"). That change can manifest in a number of forms depending on what the data is telling you. A brand might jettison a variant; change ad copy, serve different content within an app based on user selections, or change a website interface to inspire more action. Indeed, new research commissioned by Microsoft and conducted by IDC estimates that organisations could realise a "data dividend" of roughly $1.6 trillion in additional revenue, lower costs and improved productivity over the next four years by putting in place a holistic approach to data.
"Customers today are evolved, engaged, informed, digitally savvy and seek more value," says Peter Gartenberg, general manager, enterprise and partner group, Microsoft India. "To keep pace with the growing customer needs, attain the competitive advantage and expand the customer base, businesses are now looking for tools to not just address the market and customer demands, but also to be prepared to lead the way in future. With data being amassed at a rapid rate, it has created the demand for tools that are intuitive and simple for enterprises to be empowered with the ability to derive insights from the data."
Where did it all begin? Rapid digitisation has led to the availability of huge tracts of consumer data within and outside organisations. That apart, the falling cost of data storage and cloud-based solutions are enabling organisations to invest in data gathering and deployment. So businesses are increasingly leveraging business intelligence (BI) to churn out products faster, offer innovation and, above all, take better decisions. "The kind of intelligence businesses have today offer deeper information about consumer likes and dislikes unlike other traditional tools of gathering information such as focused group studies and one-to-one interactions. It is the robust and holistic consumer view offered by business intelligence that feeds into quality product innovation and marketing," says Sudarshan R, commercial marketing head, Dell India.
Since managers have access to real-time data on products, sales and marketing campaigns, they are better placed to take quicker decisions and shift focus midway. For instance, at Dell India, about 50 per cent of decisions on products and services are currently driven by BI. The company uses tools such as R and SAAS and undertakes statistical modelling around consumer behaviour. These tools provide management a reasonable view regarding the acceptability and success of a new launch. "Businesses across categories are increasingly adopting business intelligence tools as it helps them discover and analyse metrics and convert data into actionable information that can be shared and acted on," says Sridhar Iyengar, VP, ManageEngine.
BI has also helped Dell India market its products more effectively. During the launch of XPS laptop, for example, the team debated whether it should follow the Apple approach of putting the product at the flagship stores or it should stick to its standard practice of making the product available first on its website along with its traditional associates. A thorough analysis of potential and targeted customers threw up interesting insights. One, the consumer who will buy an XPS happens to be a The Financial Times reader; two, she prefers brands such as Samsonite and three, her preferred coffee brand is Starbucks. Joining the dots, the team accordingly decided on a marketing plan for promoting XPS.
"Any product innovation is incomplete without taking cognisance of consumer data spread across sales, marketing, customer care, supply chain management and social web data where valuable consumer insights are hidden for organisations to learn from," claims Rohit Verma, chief executive officer, iPredictt Data Labs, a Mumbai-based big data analytics company. In other words, in a digital-led economy and with shorter and shorter product lifecycles, any attempt to ignore new sources of data would spell disaster.
The country's leading carmaker Maruti Suzuki Indian Ltd (MSIL) ascribes a lot of its success to continuous monitoring of data emanating from the consumer. A recent and highly successful product from the carmaker's stable, Ertiga, is a product of such thinking. Sanjeev Handa, vice-president, marketing, MSIL, says, "Our research showed that as a family people wanted to travel efficiently and in luxury. They did not want a bulky product; instead they wished for a compact offering. This feedback came from consumers who already owned one or two vehicles."
Based on this feedback and a wide range of data points, Maruti Suzuki crafted Ertiga which created a segment of its own. Apart from product planning, the company uses consumer analytics extensively to generate leads and improve sales.
Handa says that intelligence helped the company sharpen its focus on selling. He explains that with a recent example - how the marketing team improved sales in Hyderabad. Data collected by the company showed that the business segment, particularly shop-owners in the city, did not favour the brand Maruti. The company executives looked into customer records and the mileage cracked by existing Maruti Suzuki customers. This exercise helped it identify a lot of potential buyers and the company reached out to them through sustained and targeted campaigns. During the campaign period itself, it managed to sell off close to 90 cars.
For its part, fast moving consumer goods company Marico has moved from BI to visual dashboarding with Tableau, on the back of columnar databases and ETL (extract-transform-load) tools. Using a platform-based interface and order management tools helped the company increase its order visibility, which aided fill rates and increased its topline sales. "The granular secondary data available in one consolidated place is also used for better customer analytics. Initial pilots are being done to provide a better assortment mix to our customers, further aiding sales. These pilots have led to higher upselling," points out Mukesh Kripalani, chief, business process transformation and IT, Marico.
Mobile phone maker Gionee uses self-developed BI tool GPulse. Country CEO and MD Arvind Vohra elaborates, "It has a built-in accountability matrix for various tasks (with timelines) to ensure managers get the required analysed information to aid in task completion." Technology company Ideapoke deploys proprietary technology using big data analytics and matching algorithms to crowdsource technology partners across the globe, connect the best solution providers, enabling customers to restructure, improve, evolve and solve their product and service development changes. Says Anup Sahoo, founder, Ideapoke, "BI taps into the collective intelligence by identifying relevant markets, profiling consumer needs and redefining product offerings, thus enhancing value for both consumers and companies."
In sum, transformation and innovation will play a pivotal in the success of any business. And as "always-on" business becomes the new normal, analytics will provide the perfect opportunity for BI to flex its muscle.
EXPERT TAKE: Breaking marketing myths
- Marketing can be changed by real-time feedback: Marketing can now be considered a variable rather than a fixed cost. Online platforms provide managers instant feedback from customers about their promotion. Because of this managers can consistently improve their marketing campaigns based on that instant feedback. This is unlike traditional approaches where investments are made upfront in television campaigns that only provide feedback after several weeks or months and too often the feedback is received too late to change the marketing campaign.
- Coupons are brand builders: Coupons are commonly used to provide discounts to consumers. Typically the success of coupons was assessed based on counting the amount of coupons that were used. With the arrival of BI managers are able to look at who are reading the coupons and who received the coupons, so they can track the behaviour of both the groups. It turns out that customers who received coupons but did not read them also increased their spending. So coupons are now acting as a form of advertisement in addition to being a discount.
Professor of business administration, Darden School of Business, University of Virginia