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To succeed in the startup stage, a good and well-prepared business plan is crucial. The break-even analysis needs to be firmly grounded on market estimates and strategy. Here the combination of marketing and data can reveal its true power. In every sphere of the 4 marketing Ps – Product, Pricing, Place and Promotion – a good analysis of retrieved data can have a powerful impact (1)
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One of the most common uses of data is to obtain product insights. Some examples:
How to pollinate dynamic pricing with data
Dynamic pricing allows you to optimize revenue by offering different prices at different times to different consumers. You can do this by using real-time datasets, like inventory data, financial forecasts, and models of likelihood of purchase.
Many hotel chains currently use this system(2). Data may, for instance, reveal that clients visiting the hotel website via smartphone are more likely to make reservations independent of price. This allows hotels to increase prices for this specific target group. Airlines and retailers such as Amazon or Walmart adopt the same strategy.
Place: how data offers fertile ground for optimal distribution
Data analysis points the way to find the optimal channels for your products. A timely shift of your distribution channels can be crucial. Take the newspaper sector, which has witnessed declining advertising and subscription revenue. Some newspapers went completely online, erecting a paywall. Others downscaled print circulation and integrated a free or paid online model. By carefully analyzing their data, they were able to downscale their print version accordingly.
Shedding light on which promotion works best
Data can be harnessed to test and predict likely consumer reaction to various marketing messages. For example: to target your e-newsletter to 50,000 consumers you can use marketing data to create a profile of the average consumer, extrapolate their motivations, and write copy that speaks to them. Tools allow you to easily perform A/B testing with small sample sizes, e.g. to pick the best subject lines. You can instantly spot the lines with the best opening rates. These winning versions you send out in bulk, adapted to the various segments of your subscribers.
How data boosts flexibility to outgrow much bigger trees
These are only a few examples of how to quickly adapt your marketing mix to your new markets thanks to data. During the start-up phase adaptation is key. For new players on the market, agility and flexibility are their biggest competitive advantages. Especially against established players who may have slowed down due to routine, fastidious processes or lack of innovation. To survive against competitors with bigger means and more experience you need to be faster and more efficient. As a newcomer, you often need to reinvent the rules of the game.
For more information on data intelligence support in every phase of the business cycle please contact your Bisnode consultant.
Episode 3/5 of our ‘smart data fertilizer for continuous growth’ special highlights the third phase of the business lifecycle. 3. The growth stage: tapping into data to win more customers and more revenue per customer