Enterprises across multiple industries are finding more ways of monetizing their data
By using customer self-serve information like client demographics or pricing and packaging statistics together with industry-leading business intelligence (BI), they are able to find new revenue sources.
Successful businesses have fully integrated this practice into their strategies, according to McKinsey&Co. A recent study of 512 companies shows a 12,70% revenue increase with data monetization compared to other growth levers such as acquisition (3,32%) and retention (6,71%). Despite this revenue increase being the growth lever least likely for a company to adopt.
Famous examples of companies reselling customers’ data to make money, like Facebook and Google, have made other SaaS startups question how they can implement something similar. However, the biggest obstacle is that most of these organizations don’t own their clients’ information, making reselling unviable.
Data as a Starting Point
Saas companies are in a privileged position because they have access to valuable customer insights through the use of their platforms. Though frequently, this takes the form of simple dashboard statistics that don’t provide much utility to the client, as it is the kind of reporting that can be done without much effort.
However, companies often fall short from leveraging customer data for internal use and outwards to their customers due to a lack of resources, the wrong data access program, and a focus on other features. This prevents them from developing solutions which may result in an additional source of revenue.
To overcome this obstacle, SaaS businesses need to shift their mindset and think about data monetization differently. It isn’t about the information itself and what can be done with it, but what can be done around it. The key is to create services around the data that provide value to the customers so that they’re willing to buy back their own facts and figures.
In my experience as the co-founder and CEO of Verb, a company that specializes in dashboard creation and other BI services, I have found that the best way to achieve this is by using APIs. This tool is versatile as it can take many forms, has different applications, and works across industries as varied as e-commerce, CRM, healthcare, manufacturing and RFPs, Supply Chain, and Logistics.
Harnessing the Power of APIs
The main appeal of a data access API is convenience. This piece of code, which communicates and transmits information between two web services, makes it easy for your end-user to utilize their material for whatever purpose they need.
Thanks to APIs, data is available at all times and in the preferred format for immediate use. It also allows SaaS to retrieve relevant facts from multiple sources in a central system which gives the client a more holistic overview of their business performance so they can make informed strategic decisions.
To help explain, let’s use Shopify, the e-commerce site. Shopify builds an API from third-party software and uses it to pull data from Amazon and Etsy. They can offer their customers, for a fee, the possibility of having all of their sales information in a central place using just one tool instead of pulling multiple reports from different marketplaces.
Another service around customer data is to provide insights by layering extra information on top of their own. This can be done with a data access API that can collect information from relevant sources to allow managers and business owners to forecast. This additive method can provide clients with the knowledge that helps improve business planning.
For example, if you have a logistics company, you can create a data access API to retrieve information from official road monitoring services to incorporate data into your platform. That way, your customers would benefit by giving their clients accurate information about the delivery times of their orders.
Thinking About Long Term Solutions
As a convenience feature, data access APIs should be easy to set up and highly adaptable. This allows any non-technical team to handle it. Users can add APIs, create new data, and take action based on the insights that come from it without constant intervention by the provider.
This solution is a win-win to any enterprise software partner, with no additional maintenance or implementation work needed. It makes for a stronger organizational design, and it enables different business functions, which is the core feature of data monetization.
Reframing thoughts about data monetization needs to happen within SaaS businesses so they can start taking advantage of all the resources they have at their fingertips to scale and increase revenue. Many promising services and insights can derive from within a database, and discovering them should be a bigger priority across the industry.
About the Author
Dave Hurt is CEO and Co-Founder of Verb Data. Verb solves the real pain points of building end-user dashboards and reports so you can focus on your businesswhile providing great data experiences to your users.
Featured image: ©Chan2545
