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Enhancing Customer Relationships with Consumable Data

Barbara H. Wixom
Principal Research Scientist, CISR

In the early days of big data, organizations invested heavily in analytics talent, data platforms, and business intelligence units in the hopes of making key business activities better, cheaper, and faster. The majority of these efforts were for internal consumption only and had no direct value for customers. In 2013, however, scientists at the MIT Sloan Center for Systems Research (CISR) began observing a nascent approach toward data monetization they dubbed “data wrapping” that focused on assisting and delighting consumers.

Done well, data wrapping can yield a 60% average return on investment, according to a recent article in MIT Sloan Management Review (SMR) by CISR Principal Research Scientist Barbara H. Wixom, prenode co-CEO Ronny M. Schüritz, and MIT Sloan graduate researcher Killian Farrell. “Why Smart Companies Are Giving Customers More Data” is a must read for executives and product managers seeking to maximize the benefits of data wrapping.

What it is and where to begin
“Companies are data wrapping when they give data and analytics to customers as product features and customer experiences—such as spend categorizers, automatic sound optimizers, and shopper insights—with the goal of increasing a product’s value proposition,” write the research trio in SMR. They caution, however, that “the capabilities, processes, and skills that historically helped the company use data analytics … are insufficient for producing data analytics that delight customers.”

Using insights gained from in-depth case studies, interviews with company leaders and project teams, hundreds of use cases, and a survey of 500+ product managers worldwide, Wixom and her colleagues have distilled the creation of well-wrapped data into three steps. The first is to assemble a multidisciplinary team that includes data analytics and IT staff but is headed by product owners and managers. That hierarchy is key, according to the researchers.

Learning from high-performing data wrappers
“Product owners and managers,” they write, “deeply understand a product’s cost structure and the customers being served…. They also have access to customer-facing processes and channels that help the company sense and respond to customer needs.” Such teams are well equipped to deliver on the second step of successful data wrapping—designing features and experiences that inspire customer action. Value ensues when customers are prompted to a behavior or experience that meets a compelling need (e.g., saving time or money).

The third and final step of high-return data wrapping is measuring impact. The researchers report that companies “draw upon a portfolio of techniques such as usage tracking, A/B testing, controlled experiments, customer surveys, and pilot studies to get a good sense of their data-wrapping outcomes.” The design principles described in “Why Smart Companies Are Giving Customers More Data” are supported with examples of successfully deployed data wrappers from BBVA, PepsiCo, and the Australian hearing solutions manufacturer Cochlear.

Based on their research, Wixom, Schüritz, and Farrell estimate that data wrapping provides 26% of the value a typical company yields from all data monetization initiatives. They also write that in today’s digital world, customers increasingly expect value from data analytics. The clear bottom line: companies that fail to deliver such value will surely be left behind.

 

 

 

 

 

 

Leaders Across the Sports Spectrum Connect at the MIT Sloan Sports Analytics Conference

In just its 13th year, the MIT Sloan Sports Analytics Conference (SSAC) has grown to be the leading industry confab, attracting the most influential names in sports. In March, more than 3,500 participants attended the event, representing 44 states, 33 countries, 130 professional sports teams, and 200 universities. To accommodate its meteoric growth, the conference was moved from the MIT campus where it originated to the Hynes Convention Center in Boston.

Houston Rockets GM Daryl Mores, left, with data guru Nate Silver Photo: Julia Zhogina

The packed roster of nearly 200 speakers featured writer and cultural observer Malcolm Gladwell, data guru Nate Silver, Hip Hop Artist Meek Mill, Massachusetts governor Charlie Baker, and the senior leadership of several major sports franchises and media outlets. Panelists and speakers also included data analysts, noted sports journalists, and coaches and players from the premier sports teams in the country.

The lectures, workshops, and panels were as diverse as the notables in attendance.

Just a sampling:

  • Data is the New Black: Building Data-Driven Organizations
  • The Performance/Precaution Tradeoff: Player Health
  • Soccer Analytics: Shaping the Future of the Game
  • Scoring Sponsorships: Metrics to Maximize Brand Value
  • Helping Dream Chasers: Social Justice with Meek Mill and Michael Rubin
  • Ticketing Analytics: The Power of Open Distribution
  • Making the Modern Athlete: A Conversation with David Epstein and Malcolm Gladwell
  • It’s Complicated: Athlete Relationships with Social Media
  • From the Martial Arts to the Art of Negotiation – Sport, Science, Art, or Philosophy?
  • Sports Mythbusting
  • Basketball Analytics: Hunting for Unicorns
  • Baseball 2.0: Updating America’s Pastime

Creative challenges

The two-day event also included a wide range of activities from speed networking conversations between industry leaders and college students to “Chess Blitz,” which convened the brightest minds in chess to discuss the transformation of the game. The Fantasy Challenge tasked graduate students from around the world with creating and presenting new fantasy sport concepts, while the Startup Competition and Trade Show gave selected enterprises the opportunity to showcase their innovations in sports-related technologies, products, and services.

One of the highlights of the SSAC is the annual Hackathon, which brings together innovative and analytical minds to create groundbreaking solutions in the sports industry.

The Hackathon actually takes place the day before the start of the conference. Participants are provided with a brief to build a digital concept and industry experts provide mentorship. Teams then pitch their ideas to a panel of judges, and finalists present their concepts to the SSAC assemblage on the last day of the conference.

Current MIT Sloan Fellow Chris Capuano, a former Major League Baseball pitcher, was on hand at the 2019 conference to share his wisdom in the panel Unlocking Potential: The Next Generation of Tracking Data.

Read the MIT News article about the 2019 MIT Sloan Sports Analytics Conference.