The ROI of Data: Turning Insights into Revenue

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Data has the potential to impact all aspects of your business – from operations to supply and demand – but what’s the ROI? 

It’s a topic on the minds of many business leaders we talk to, so we’re tackling how companies can make their data accessible and actionable, focusing on revenue growth and turning insights into tangible top-line results.

Data-Driven vs. Intuition-Driven Companies

Companies progress through levels of data maturity, ranging from reactive to native:

  • Level 0 – Data Reactive: At this level, businesses operate in silos and rely heavily on spreadsheets and retrospective analysis.
  • Level 4 – Data Native: At this level, businesses embed AI and machine learning into their operations to enable proactive analysis. 

Today, only 5% of companies reach Level 4, while 30% remain in the reactive stage – everyone else falls somewhere in between. 

Businesses that embrace data-driven strategies report 37.7% higher revenue growth over five years compared to their “intuition-driven” counterparts. Furthermore, businesses that leverage data analytics in their decision-making process are 2.3 times more likely to outperform their peers. 

To put that into perspective, a $100 million company could generate an additional $37 million in revenue simply by adopting data-driven strategies.

These statistics paint a clear picture: Companies that have achieved data maturity are experiencing more growth. The gap between data-driven and intuition-driven companies will continue to widen thanks to advancements in AI and machine learning, and this divide underscores the competitive advantage of investing in data for significant returns.

The ROI of Data

When it comes to top-line results, there are two primary strategies: acquiring new customers and increasing revenue from existing customers. 

Acquiring New Customers by Targeting the Right Opportunities

A commercial roofing company replacing aged roofs on commercial buildings wanted to fill its pipeline with high-quality leads. 

To identify prospective customers, they sourced third-party data to locate buildings with aged roofs in their target regions. They integrated the data into their CRM and made it accessible to front-line sales representatives, allowing them to focus on prospects most likely in need the company’s services. 

The result? A $60 million pipeline of revenue opportunities, achieved with minimal investment in technology and publicly available data. 

Another approach to acquiring new customers is to analyze your current customer base and identify your Ideal Customer Profile (ICP) – your best potential customers based on industry, product/service need, revenue size, and more. Once the ICP is defined, you can source third-party data to find similar prospects. 

Increasing Revenue from Existing Customers

One of our clients asked us to develop a “Stars” and “Stones” strategy to optimize their current customer base. 

This approach focused on identifying their best-performing customer accounts (“Stars”) and nurturing those relationships for maximum revenue growth. They also wanted to identify their underperforming customer accounts (“Stones”) to determine whether improvements could be made or if the relationship was better left unnurtured.

By analyzing data on profitability, customer lifetime value, and account engagement, they were able to prioritize efforts on customer accounts with the highest growth potential. This drove additional revenue and improved operational efficiency by streamlining the sales team’s focus on high-value customers. 

Beyond Revenue: Data as a Growth Enabler

While top-line revenue growth has been the focus of this article, the ROI of data extends to other areas of business:

  • Market Expansion: Identifying new geographic or demographic opportunities.
  • Marketing ROI: Improving campaign targeting and performance tracking.
  • Operational Efficiency: Optimizing expenses and profitability by client or product.\
  • Product Development: Analyzing customer feedback and usage patterns to enhance offerings.

Companies that embrace data-driven strategies are growing faster and building sustainable competitive advantages. Whether it’s acquiring new customers, maximizing existing relationships, or enhancing operational efficiency, the ROI of data is undeniable.

For businesses that are still relying on intuition, now is the time to act. If you need help developing the data systems, processes, and culture you need to unlock your revenue potential, schedule a call with us today.

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