The 3 questions to ask, to help with strategic data planning
Think of the best person you know at planning? What makes them good? Chances are they’ve got good attention to detail and they’re methodical. Without consciously thinking about it they’re probably quite good at looking into the future and play out scenarios in their head. So they’re the kind of person who thinks of things others don’t account for. It's this type of person you need when it comes to strategic data planning in ecommerce. They should also have a strong blend of commercial and technical savvy. Not every ecommerce retail business has such a person within it. Especially small ecommerce retailers. So we've put together the following questions to help you. They'll help you think about what you should be asking yourself in order to make most optimal use of customer data in your organisation.
1. What are we trying to achieve?
One of the first things people often ask us is “can you tell us what our data says?” We usually respond by asking “first of all, what are you trying to achieve?” Starting from top-down broad business objectives is important as it helps provide focus. Taking a bottom-up approach can be done, but it’s the 'needle in a haystack-type approach' that takes longer. So to save time, be clear on what you want to achieve as a business, and drill down from there to know what questions to ask of the data.
For example: "We want to retain a higher proportion of our customers."
2. What do I need to know in order to achieve that?
Building on the previous point, you now need to ask yourself what you need to know in order to achieve your goal. What information is needed in order to turn the current situation into an improved one. It helps to use ‘if’ statements at this stage. For example ‘I’d be able to send out a targeted incentive for a customer to stay with us IF I knew when they were most likely to switch to a competitor” or “I’d be able to identify which customers to focus on retaining IF I knew who was more important”.
At this point you need to check whether you’ve 'boxed' your thinking. By this I mean, have you determined what data you need, based on what data you have within the organisation? You should be trying to stay strategic at this point. Don’t get dragged into ‘solution mode’. It’ll narrow your thinking.
The reality is that many ecommerce businesses have a tonne of data. So it’s good practice to try and leverage what you’ve got already. However it’s also important to think holistically as this fosters innovation and commercial opportunity enabled by data.
At this point it may be worthwhile talking with someone who understands strategic data planning in an ecommerce retail context. They'll know what potential data would specifically be needed in order to answer shed light on the 'if' statements above. This also depends on the complexity of the challenge you face. It also depends on what decisions would be influenced by the answer. This brings us to the next, highly important question.
3. How would knowing X change my decision-making? (i.e. do I really need to capture and use this data? What is the "minimum viable data" we need)
A common mistake is to try and capture every single piece of data possible into one giant database. This is the result of data requirements gatherers, who talk themselves into seeing value in every single piece of data. While data is valuable it’s how it’s used and brought together that actually provides the real value. So in the age of big data, in many cases only a small amount is needed to make a difference to the bottom line.
In short, focus on the data needed to get results - that's what strategic data planning is all about.
Strategic Data planning - the next phase
In this follow up article I've added more questions to ask yourself about ecommerce data planning, which get more into the detail, moving you from strategic to tactical implementation.