We’ve covered in many ways data monetization in several older 100 days of data economy blog posts. I decided to still list the top 5 reasons why you should monetize your data.
Usually, monetization means converting something into money. In order to determine the economic value of a data, it must first be identified. As with other intangible assets, it is not quite simple with data. Intangible assets (such as data, brand, patents, inventions etc.) can arise in a number of different business functions and there are multiple ways in which data can create value to a company. You can measure the impact and the value of data by looking for specific ways in which an organization uses data e.g. to reduce costs and ways in which data increases and diversify revenue.
Please also read our previous blog post: #5 Could data be your company´s most valuable asset?
Top 5 - Why monetizing data?
1. Increase competitiveness and productivity
Data can help you increase productivity or, for example, reduce consumption and waste. It can enable you to improve the quality of your customer experience and boost sales. By monetizing your data, you can improve your understanding of your target customers and the market in which you operate. Data is valuable in itself, but an understanding derived from data enriches this value.
You can use the data to forecast demand and revenue, optimize prices, manage and reduce operating costs. This in turn affects your company’s competitiveness, productivity and overall profitability.
2. Increase the value of data, products and services
Companies like Facebook and Google provide users with free and, in fact, very high quality digital services. In return for the free services, the user agrees to log in together so that the company can take advantage of the data collected from the user. Collect data can be very detailed, such as where on the site user slows down, what clicks or what images are viewed.
The data can be used to accurately profile the users and target marketing or improving customer experience and loyality. By networking with each other, companies can form very comprehensive and thus valuable data sets about users and their behavior.
Monetizing data reveals its quality, and usually data quality development processes are initiated as part of it. The value of data, in turn, depends on its usability and quality. Same goes for data-driven services.
3. Identifies and mitigates risk
Sharing data needs almost in every cases considerations related to access rights, security and protection. Ultimately, the data monetization and related business models will take care of this and help you move forward. With data monetization, these factors must be taken into account in the beginning.
4. Strength partnerships and ecosystems
Data monetization increases the emergence of new digital services, improve companies cooperation in data sharing and develop existing offerings Sharing data strengthens partnerships and creates new business opportunities, ecosystems and networks. The development of entirely new data-driven business models is often based on partnerships in which specialized companies work together to form a supply to customers.
5. Helps identify new opportunities for growth and strengthens revenue streams
It’s easy to get used to revenue flowing in from the existing streams. You start to rely on fixed income stream and you’re more reluctant and timid to seize new opportunities. Nobody wants to take the risk of falling into the 75% of companies that fail to launch new initiatives and market.
This approach can leave you vulnerable. Data-driven approach is not based on mere assumptions and also prevents unnecessary risk-taking. Above all, you can analyze things before making a decision.