Whether you’re a new or seasoned business owner, words like “data science” and “enhanced revenue” can make your skin crawl with anxiety. What do these mean? How should your company implement these?
You may be a pro at this already, or you may need some guidance. Either way, you are in the right place to grow your business and enhance your revenue! Let’s break down what these concepts mean and how you can implement them in your company.
Data science is a multidisciplinary field that uses scientific methods, processes, algorithms, and systems to extract knowledge and insights from structured and unstructured data. In other words, it is a system that gathers information using scientific methods.
So, what is the advantage of data science and the steps you need to take to achieve it?
The 80/20 Principle
Think of it this way. Just 1.4% of tree species account for 50% of the trees in the Amazon. If your business is only 1% better than your competition, you will capture 50% of the market share over time!
The 80/20 Principle states that 20% of your customers produce 80% of your revenue.
The esteemed computer scientist Jim Gray believed that “everything about science is changing because of the impact of information technology.”
If one business has new cutting-edge technology, more people will buy their products instead of their competitor’s products which lack the latest technology. The business with advanced technology accumulates small advantages that make it easier for them to beat their competition. This is the 1% margin.
You only need to be 1% better than your competitors to be a dominant force in your industry.
Unclean Data vs. Clean Data
The first step to being 1% better than your competition is analyzing your current data. Is it unclean or clean?
First of all, what does Unclean Data entail?
Unclean Data encompasses your irrelevant, inaccurate, and incomplete data. It is a waste of your marketing, sales, and administrative dollars. It’s the data you are spending your time and resources on without seeing an increase in profit. There are multiple ways to lose money to Unclean Data.
Deliverability encompasses incorrect client information such as mailing and email addresses. Your company domain could get blacklisted if you send undeliverable and non-opt-in emails. The results are catastrophic.
Additionally, digital media buying falls into the same category. If your data is unclean, your banner, video, and social media ads reach the wrong people, which is a waste of your resources.
Normalization & Standardization
Your data should be clean.
What was wrong with that sentence? Did this article lose its credibility in your mind for a second? That’s exactly how your customers feel when your advertising and other services have inadequate spacing, improper capitalization, and misspelled words.
Not only does this make you look unprofessional, but your target audience will not respond to you. Even if you get the deliverability factor right, if your information is tainted with grammar errors, you will not receive the response you want despite your efforts.
When you enhance your data with additional demographics and business attributes, you risk improperly scoring your data. This wastes your marketing budget and sales investments in people. Inaccurate data won’t help you in the long run.
On the other hand, Clean Data is effective and highly valuable!
Clean Data is scored accurately. It allows your sales team to spend more time talking to the top 20% of your current customers who renew faster, buy more frequently, purchase multiple products and services, and deliver you more net-new business through referrals.
Clean Data allows you to target new prospects who look exactly like the top 20% of your best customers. While your target audience is 80% smaller, each new customer is far more valuable. This allows your marketing budget to stay the same, but you can afford more marketing channels to reach your target audience.
With Clean Data, your business revenue grows faster!
Where should you start?
A data cleanse takes your current data and reorganizes it. How can you trust records littered with incorrect data? Is your information so disorganized that you can’t determine what’s correct or what it pertains to?
Don’t worry! There’s a way to fix this.
A data cleanse cleanses, standardizes, and harmonizes data sets. It eliminates worthless records and determines attribute weights for scoring. It sorts through incomplete, incorrect, and irrelevant data. It replaces this data with missing information that could benefit your data. This creates quality data.
As a result of data cleansing, you can score all records for prioritization, tell data stories visually, and create a Data Enhancement Plan (DEP).
Clean your data so your business can reach its full potential. This work enhances your data and grows your business so that your team can utilize their time and efforts in a more productive way!
Data Enhancement is the next step to grow your business.
Data Enhancement adds necessary information to your clean data. It sounds more complicated than it actually is. You don’t have to be a “data scientist” to enhance your clean data. All you need is someone well-versed in Excel and a formula to score your best current clients based on your sales data alone.
When you enhance your data, you should score contribution metrics, standardize and unify segmentation, and append donor attributes and demographics.
Powerful outcomes for enhanced data will:
- Increase renewal/retention rates
- Increase customer value
- Increase frequency in which they purchase
- Increase likelihood of prospects becoming new customers
- Help identify attributes that determine top revenue generators
- Allow you to spend marketing budget on narrowed down prospects
Data activation identifies the value in your quality data and transforms it into action.
Accurately identify your customers so that you can enhance customer experience and appeal to your target audience. Data activation helps you plan for current marketing initiatives and future ones. With data activation under your belt, you’re always one step ahead.
Apply What You Know About Data Science
Step 1: Create a Current Customer Sales Score
All you need is Excel and a formula to score your clients based on your business objectives.
The formula you use to score your current customers will depend on your industry and business objectives, but you can consult this general formula.
Average Gross Profit/Order x Average Order Frequency x Average Customer Loyalty
Step 2: Create a Current Customer Demographics/Attributes Score
Your demographics should include:
- Income level
- Hobbies & interests
- Voting record
Your business attributes should include:
- Years in business
- Annual revenue
- Number of employees
- Decision-maker’s Title
For your data activation to reach its fullest potential, create a current client and prospective demographics and attributes scoring formula:
- Sort demographics and attributes of top 20% customers
- Calculate the range for characteristics
- Identify the most important attributes
- Evaluate attributes from most to least important
- Note the total score on the attributes and demographics.
- Calculate the score of all prospects based on formula
- Engage the top 20% through marketing
Add demographics and attributes to the top 20% of unique customers scored to enhance your data further.
Note: If you don’t have many demographics or attributes, send your list to a true data compiler source to append the data. Reliable sources you can go to include Acxiom, Compaq, ValPak, and D&B.
Step 3: Apply Attributes Score to Your Prospects
Score your cleansed prospect list based on these weights. Find more business that looks and acts like your top 20%.
This changes your Marketing Action Plan.
A smaller number of prospects allows you to:
- Expand marketing channels
- Increase spend per targeted prospect
- Extend the length of your campaigns
Grow Your Business with AMG
Data Science is a lot of hard work, but it’s necessary work. However, running a business while simultaneously reorganizing and rethinking marketing techniques can be overwhelming.
That’s where the AMG Team comes in!
Our team delivers your organization revenue enhancement through the combination of data science, cutting-edge digital and traditional marketing innovations, and business automation services.
Partner with us to increase your revenue and grow your business. When you choose the AMG Team, you’ll leave 100% satisfied and with zero regrets.
Call us today for more information!