February, 2006 SAI-046
From Data to Value
This is a report of the Cranfield Customer Management Forum’s work in 2004/5.
Few companies today would define themselves as anything other than knowledge-based. For knowledge-based marketers, the critical issue is how knowledge leads to market insight, drives offer development and creates value. Previous work at Cranfield has defined CRM practice as the use of individual customer data to drive value.
This previous work has also defined the necessary preconditions for effective CRM and the way successful firms adapt CRM to fit their situation. However, this raised further questions, especially about the detail of how firms use data to create value.
As a result, the members of the Cranfield Customer Management Forum asked that this topic be studied further to provide recommendations for best practice in this field.
This task was addressed in two phases, starting with a comprehensive review of previously published research and then testing and probing those areas where the previous work was lacking or unclear. It did so by means of 13 in-depth interviews with firms who were heavily involved in the data-to-value process.
In short, this study reveals that creating value from data has all the difficulty of ‘traditional’, less data-dependent strategy making and some additional challenges. Far from being made easier by information technology, it is made more difficult by the need to find, aggregate and synthesise sources of data that are more numerous and more diverse than in traditional value-creating processes. It is, however, that greater difficulty that promises both greater and more sustainable competitive advantage and hence value.