Factor 02 in Platformization: Value through Data & Analytics
Data is the new oil – the new competitive advantage for companies today.
Vivaldi’s Platformization Potential Study is a forward-looking, comprehensive report that introduces the top S&P 500 companies such as Netflix, Pfizer, MGM Resorts, Nike, etc. with the most potential to capture exponential growth. We divided our analysis into two lenses: (1) the brand relationship between a company and its stakeholders and (2) how the company performs across the following five factors: The “Customer Centricity PLUS” Mindset, Value through Data and Analytics, Social Currency, Industry Position and Ecosystem Potential, and Agile Experimentation with New Technologies. Below we highlight the second factor.
FACTOR 02: Value through Data and Analytics
The degree to which a company invests in and builds its operating model around data, analytics, and technology, determines platformization potential.
Companies that have high platformization potential are those that think far beyond simply products and services. They operate businesses where value is created through data and analytics, enabling them to create new value through strategies such as personalization or customization.
To better understand customers, and to deliver value, they integrate data from multiple sources; they capture first-party data (those provided by consumers themselves) with their own data in the CRM or customer data platform, and third- party data (those acquired through third-party suppliers to build audiences).
Think of Apple, its App Store is an extremely profitable platform and a key factor in the success of the iPhone business. The platform not only offers app developers access and the ability to sell to a vast market of consumers, but it also offers them data and analytics to improve their software. Even if consumers download the app for free, Apple charges developers a hefty ‘Apple tax’ for its services: 30% of any in-app purchases in the first year, and 15% every year thereafter. Yet developers are willing to pay these high margins. Why? They believe that the incremental value Apple adds outweighs its fee.
Traditional pipeline companies can begin to exploit similar value through data and analytics. Intuit, for example, is well known for Quickbooks, its tax preparation software. It now manages an open platform that connects the 600,000 accountants who use its tax software with consumers and small-businesses. Over 1,400 apps have been developed by third-party developers. It uses the data from its Quickbooks software to guide software developers in their product development, creating benefits and value for its accountants who can improve the services they offer to those in need of tax preparation services or other accounting services. Thus, Intuit creates value for multiple parties, not just direct customers, but all participants in its open platform.
Explore the full study here for action-oriented strategies that can help businesses build better and stronger brands for today’s consumers.