How to Create a Data Monetization Strategy

Summary

In this presentation, Elon Weiner, an engineering manager at Looker, explores data monetization strategies for organizations. He emphasizes that companies can enhance their offerings and generate revenue from data without directly charging customers. Key strategies include indirect monetization through enriched core products and direct monetization by offering paid data insights. Weiner illustrates these concepts with examples from companies like Dyson, Spotify, and Peloton, highlighting the importance of analytics in driving engagement and value. Ultimately, he advocates for a consultative relationship with customers through effective use of data analytics.

Takeaways

• 📊 Data-driven organizations outperform their peers by enhancing customer acquisition, retention, and profitability.
• 💡 Indirect monetization allows businesses to enhance core products with analytics without directly charging customers.
• 📈 Customer engagement can be increased through analytics that provide insights, such as real-time information and benchmarking.
• 🔍 Looker offers both internal and embedded analytics, with the latter making up a significant portion of its user base.
• ⚡ Direct monetization involves charging customers for access to data features, creating a separate revenue stream.
• 📅 A tiered approach to analytics offerings can provide value to both basic users and those willing to pay for deeper insights.
• 🔑 Key insights, like behavioral analytics and churn data, are highly valued by customers and can drive further engagement.
• 🌍 Real-world examples, such as Dyson and Peloton, show how analytics can remind customers of product value and drive user retention.
• 📉 Different tiers of data offerings can cater to various user needs, from limited access to in-depth analytics and custom reporting.
• 🤝 Analytics transform customer relationships from transactional to consultative, offering value even without direct charges.

Q & A

What is the main objective of the presentation?

The main objective is to cover proven strategies for monetizing and generating revenue from data, while providing customer examples to highlight those strategies.

How do data-driven organizations outperform their peers according to McKinsey?

Data-driven organizations achieve higher customer acquisition, deliver more value to their customers, have higher retention rates, and are often more profitable.

What is indirect monetization in the context of data?

Indirect monetization involves enhancing a company's core product through analytics without directly charging customers for those analytics, leading to increased acquisition, conversion, retention, brand recognition, and proof of value.

Can you provide an example of a company using indirect monetization?

Dyson uses analytics to remind customers of the effectiveness of their air-filtering devices by providing data on air quality, which enhances customer engagement.

What is direct monetization?

Direct monetization involves charging customers for access to data or data features, creating a separate revenue stream. It is common in the B2B space.

What is the significance of packaged insights in direct monetization?

Packaged insights are crucial as they provide unique and valuable information to customers, differentiating a company's offerings from competitors.

How should companies approach tiering their data offerings?

Companies should focus on the insights first, offering various tiers of value based on metrics like benchmarking and behavioral analytics, and gradually providing more detailed and automated features.

What are some key examples of customer applications mentioned in the presentation?

Examples include Counta, which offers tiered analytics for POS services, Drizzly, which monetizes data for alcohol suppliers, and Wix, which uses embedded dashboards to support millions of users.

What can analytics do for customer relationships?

Analytics can transform customer relationships from transactional to consultative, providing insights that enhance engagement without always requiring a charge.

What are the three key strategies Wix employs for their analytics product?

Wix differentiates their premium SKUs, allows customers time to appreciate the value of analytics through a learning curve, and creates a monetization path after a free trial period.