By Andy Wood, MD, GI Insight
Buying data analysis services is not as straightforward a task as it might first appear.
Analytical firms can deliver a plethora of number-crunching possibilities.
The key challenge is to decide what analysis is going to deliver the insights that actually deliver business upturn.
1. Behavioural data (usually transactions) needs to be the first stop.
You need to start by understanding who is buying what, and then try to encourage similar behaviour.
Then transactions need to be linked back to profiles – which are made up of descriptive data. That way known behaviours can be used to identify ‘lookalikes’. Make this the starting point of your brief.
2. Remember, though, profiles are made up of slow-changing demographic information.
Because the correlation between transactions and profiles changes as the customer base develops, the exercise usually needs to be refreshed every six months, at the least. Make this commitment and make sure you have an appropriate budget.
3. The next principle is to buy analysis that reveals significant trends.
Snapshots or insufficiently frequent analysis can be at best misleading, at worst disastrous.
Analytical output that is not in tune with the likely pace of changes in customer behaviour could mask very important extremes of seasonality.
You may need to commission an initial exercise that simply identifies that pace of change.
4. Don’t be afraid to ask for a sample insight session.
You will have to hand over data to the analysts under an NDA, and they will take it away and show you what they can do.
Don’t expect them to get it all right first go.
If they can show you one or two things you didn’t know before, then the first pass has been successful.
5. Finally, don’t be carried away by an exaggerated sense of you own firm’s importance.
Big analysis firms are often only interested in big contracts with big companies.
For small clients, their analysis services will tend to be standardised.
If you are absolutely convinced that those standardised services are going to produce the insights you need, all well and good.
If not, then find a smaller firm from amongst the DMA’s member list.
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