By Hayley Selby, Content Strategist
Future-proof your business: How to extract the right signals from the noise in today’s volatile market
Today’s world changes fast, and organizations need to be agile to keep up. They need to be able to extract powerful signals from the noise to respond to market fluctuations quickly and to predict changes before they happen. Real-time access to the latest data is the key to better decision making and powerful ‘a-ha’ moments.
When Netflix spent $100 million to launch the U.S. version of House of Cards in 2011, they predicted it would be a hit. How? Customer data showed that people who watched the UK version of House of Cards also watched David Fincher films — so he was brought in to develop the U.S. remake. The show then transformed Netflix into a global leader almost overnight, becoming the streaming giant’s most- watched series: 86% of subscribers said they were less likely to cancel their subscription after watching it.
Using data-led insights to shape strategies in real-time seemed unique a decade ago, but now it is critical for brands looking to maximize their ROI (return on investment). While the numbers attest (the average ROI for enterprises using business intelligence and analytics is 1,300%), driving this type of transformation often requires a new strategic focus.
At GfK, we believe that the path to future-proofing your business combines instinct with AI- powered predictions. This combination leads to more, actionable ‘a-ha moments’ which, shape decisions and empower you and your team to decode the future. It also gives you the confidence you need to move at speed in volatile markets.
Here is our perspective on how business leaders can discover valuable insights to shape their strategy and know when, why, and how to act.
How business leaders can discover valuable insights to shape strategy
There’s an art to decision-making. And while using data to validate (or invalidate) assumptions is a key element of any informed decision, intuition often provides leaders with a compelling starting point.
“We understand our brand and our business, so going with our instinct is where we begin,” says GfK CMO Gonzalo Garcia Villanueva. “But then this instinct must be validated with in-depth customer data. The art is balancing human experience with data science, resulting in knowledge at speed.”
Combining this art and science of decision-making the right may seem elusive, but the best place to begin is by going back to basics. Start by understanding the key business questions. This can arise from the details of a yearly operating plan, a particularly striking wave of customer feedback, or even wider market trends. Then use AI to transform vast amounts of relevant data into trends or anomalies.
Having these actionable insights months before human-led research would materialize allows businesses to quickly unlock important details and deliver major impact.
Before investing in a new store, Starbucks taps into local data, including income levels, age, traffic, and even nearby landmarks such as offices or universities. This data is then used to create AI forecasting models of the revenues and profits, as well as the potential impact on existing revenues from nearby Starbucks outlets. Instead of taking a guess as to the ideal location, Starbucks executives make informed decisions based on real data.
How to use data to future-proof your business
Businesses succeeding in today’s difficult climate make bold changes, not minor adjustments. Using data mitigates the risk of these bold moves. The right insight delivered at the right time can reveal opportunities to pivot or expand beyond traditional core offerings.
Sharp, for example, used predictive analytics to get to the bottom of a hunch that people were printing less and reoriented its business completely to where the market was headed. “Issues that arise at a customer level can sometimes begin to paint a picture of a strategic change,” says Stuart Sykes, managing director at Sharp UK. “We wanted to understand at a granular product level how we would be impacted versus other brands.”
By analyzing data to plot the decline in printing, Sykes spotted an opportunity for Sharp to move into the managed IT Services sector, which is now a key business area. “Sometimes organizations feel that data and metrics are there for the strategic decisions, but we use it equally to enhance our service and performance at the customer level,” he says.
There are many companies that lacked the data and foresight to adapt in the way Sharp did, and subsequently went the way of the dinosaur. In Sharp’s case, the bold move spurred their bottom line — after an 18-month decline, stock prices rose 33% in two years.
Actionable insights are meaningless without knowing when and how to act on them.
Lindsay Herbert, author of Digital Transformation, recommends using design thinking and ‘agile’ methodologies to help businesses apply these learnings early on in the process.
Both techniques can be used to help businesses define what direction to go with their insights. Design thinking takes an iterative approach to product design, creating quick, low-cost prototypes to validate new ideas and decide on further investment wisely. Similarly, agile methodologies create an MVP (minimum viable product) that is ‘complete and testable’ on a smaller scale.
These approaches can help cross-functional teams enhance their ways of working and continually test new strategies so that they can identify where the real opportunities lie and make fast, actionable changes.
By enhancing your gut feelings with data, making bold decisions and using an agile iteration process, you have the ability to stay ahead of market demand, outpacing change. “The unexpected is only a challenge when you cannot predict the speed at which it is approaching, and in what combination events are likely to occur,” says Villanueva.
Discover more ways of working with data and AI to future-proof your business with gfknewron — a single access point to your brand, market, and consumer intelligence, enhanced with AI-foresight and recommendations.