January 05, 2023
3 Ways Organizations Can Monetize Their Data
These measures can help businesses use data to achieve quantifiable economic benefits.
When I talk to top executives about their organizations’ data, they often sound like news anchors reporting on natural disasters, using words such as “avalanche,” “flood,” “deluge” and “tsunami.”
The problem isn’t gathering data. Organizations have plenty — to the point that they complain of drowning in it. But many have trouble getting their arms around their data environments and managing information in a way that creates value for their companies. In many cases, stakeholders have difficulty even finding the information they’re seeking.
In short, most businesses are data-rich but insight-poor. To improve their situations, leaders should consider thinking small by identifying data that will bring the most quantifiable economic benefit. This, in essence, is data monetization. But finding and extracting this valuable data can be nebulous. Organizational leaders should consider these three monetization methods to recognize the value from their data.
Selling and Sharing
This is probably the first thing that comes to mind when most people think of data monetization, but it’s not necessarily the most common. Selling and sharing data isn’t for every organization, and leaders who are considering it need to be mindful of security, privacy, regulatory and compliance concerns.
Many organizations risk losing their customers’ trust — and possibly running afoul of the law — if they share customer data with other businesses for profit. That’s generally not what we’re talking about here. Rather, some businesses may have opportunities to share anonymized data with research firms and other stakeholders that can extract value and insights from large pools of de-identified information. These information products can help reach new customers and markets, build better products and make faster decisions.
Selling and sharing data isn’t for the faint of heart; in fact, it essentially requires an organization to set up a new business model. But it does represent a path for using data to generate new revenue streams and realize value from untapped data assets.
Businesses can also generate revenue by “wrapping” data around their existing products and services. This requires a more creative approach than merely selling and sharing data, as organizations must identify customer problems and engineer data-centric solutions.
One of my favorite examples of this type of data monetization is the way that Ring, known for its doorbell cameras, offers its customers subscription services that provide regular reports on neighborhood break-ins and other incidents. Not only does this create a new revenue stream for Ring through enhanced subscriptions, but it also creates a “sticky” experience for the company’s customers (myself included). I’ve also noticed data wrapping from my bank: It is using my information, such as the fact that my kids are recently out of college, to market investment products and services to me that are specific to this event and stage in my life.
This is perhaps the least direct way to monetize data, but it may also be the most effective when done well. Organizations that leverage data to improve their operations and decision-making can often find significant sources of cost savings and optimization. In manufacturing, for instance, companies may use data insights to improve the yield from their factories. Retailers can use data to reduce theft, identify buying patterns and better predict what products will sell well. And delivery companies use data from Internet of Things sensors on their trucks to track packages, keep customers informed, improve service and create a better all-around experience that makes what they do more valuable.
Internally, data can help improve management, organizational structure, resource allocation and staff evaluation. Externally, it can improve product development, communications and advertising. Add these areas together, and you’ll begin to get a picture of just how impactful data can be when organizations take the time and effort to monetize it effectively.
Story by Wendi O’Neill, senior director of the CDW Data and Analytics Presales team. Her team focus is on leveraging a robust portfolio of data and analytics solutions and services to meet clients’ modern data and analytics needs. With over 23 years of experience, O’Neill enjoys helping clients stay ahead of the curve through discovering the potential of data and reinforcing a forward-thinking culture to advance competitive positioning and boost growth. O’Neill has a master’s degree in leadership and innovation from the University of Queensland. She is passionate about mentoring and advocating for her team, and for women and underrepresented groups within technology.