A few years ago, when ConAgra Mills looked to optimize production across its mills, company executives turned to what might seem an unlikely source—the airline industry. But for ConAgra executives, the parallels were clear. An airline with empty seats loses revenue just like a mill with an empty production line. How airlines filled their seats offered ConAgra executives fresh ideas for managing capacity utilization across its mills.
Business journals are filled with stories of leaders who have transformed their companies by observing successes in seemingly unrelated fields. Breakthrough ideas—both large and small—are often found in unexpected places.
With this in mind, I share four stories that emerged from our recent interviews with Generation D—the term we coined for data-rich, analytically driven companies.
GenD companies are more than twice as likely as their peers to use advanced data sources, such as unstructured text, location data, and audio and video. They are also 2.9 times more likely to use predictive analytics and 4 times more likely to use prescriptive analytics to inform the majority of their processes and strategic decisions.
It isn’t just their use of data that makes them stand out; it is the business gains they can achieve. The study found that GenD companies were “extremely effective” at addressing business challenges, such as developing new revenue streams, improving customer interactions and operating efficiently—in fact, they were three times more likely to be “highly effective” at this work than their peers.
Across the more than 1,000 companies we surveyed—in financial services, retail, travel and transportation, CPG and telecom—all were beginning the migration from relying solely on traditional, structured, transactional data to using more advanced data and analytics to solve their business challenges. The infographic on the right shows both the type of data each industry is using and how they’re putting it into play for their enterprises.
Here are four examples from our interviews of how companies are making the most of their data.
Improving the customer experience with real time data
One trucking company we spoke with wanted to revamp communications with drivers on the road so they could provide customers with real-time updates. The company tackled the problem using location data. By placing telematics systems on trucks to automatically collect GPS, engine use, speed and braking data in real time, staff could update customers on changes in delivery status as they happened instead of waiting for drivers to call.
And while the goal was improving the customer experience, the company found that location data also provided valuable insight to help it optimize fuel costs and reduce the number of handsets issued to drivers by 60 percent.
Pricing policies faster, and less expensively, using aerial imagery
Finding ways to cut costs these days is getting harder and harder. After years of cost-cutting initiatives, many organizations struggle to find ways to streamline already skeletal business processes. An insurer we spoke with found that advanced data and analytics could provide new levels of efficiency—enabling them to price policies faster and less expensively.
How? The company previously had to dispatch home inspectors when writing new policies to confirm data, such as size or condition of the home, that could impact policy pricing and terms. At roughly $100 per inspection, the costs rapidly added up.
Now, by using aerial imagery combined with building permit data from third-party sources, the insurer cut the number of on-site home inspections to just 40 percent, resulting in huge savings.
Optimizing high-cost inventory with gamification and simulations
Companies looking to optimize pricing and demand strategies could take cues from one jewelry retailer we spoke with.
Retailers often use in-store tests to gain feedback on product pricing, packaging and placement. The challenge, however, is that these tests can be expensive and lengthy, requiring stores to carry inventory that may or may not sell.
This jewelry retailer wanted an alternative that would minimize carrying costs and more quickly measure demand for new products. Their solution: conduct simulations through an online gamification with existing customers, potential clients and store associates to better understand what products people want and how much they’re willing to pay for them. This effort helped the company reduce its inventory costs and realize a 60 percent increase in new product success rate.
Getting ahead of trends by analyzing unstructured text
Trends are interesting. What’s in one day may be out the next; and what’s happening in one industry may impact another. For example, one apparel manufacturer knew that colors had a “trend of their own.” Buyers often select similar color palettes for everything in their houses, from clothes to bedding to paint. So their question was: How can we better spot these trends and understand customer likes and dislikes so we can adjust our designs accordingly?
The answer: tap into customer blog posts and reviews and see what customers are saying. By analyzing this unstructured text, the manufacturer can see these kinds of trends as they happen and make better product decisions as a result.
The manufacturer also found that they’re more nimble as well—able to modify products midstream before “the window closes on a fashion period.” If stores report that customers aren’t buying a specific shirt because of the collar size or the sleeve length or some other attribute that information can be funneled back to design and a new and improved product can be delivered back to the stores while demand is still hot.
Four industries, four challenges and four significantly different use cases. However, each is tackling a problem that more than likely your company is facing too—improving customer satisfaction, reducing costs and staying ahead of the market.
How will you make the most of your data? Looking at GenD companies like these may spark a new idea or two for using advanced data and analytics in your own enterprise.
You can learn more about GenD companies in “Inside the mind of Generation D.”