The Value of Data — The Battle for Customers
[:en]By Rick McCarten
Back in the age of hunters and gatherers, as our human population grew we often encountered other groups. When we did, we would fight over areas that contained an abundance of food, fruit trees, places where animals migrated, and lakes full of fish. Over time, as we learned how to farm, we fought over the most fertile areas that had access to fresh water, sun and fertile soil. Fast forward to the industrial age, where we battle for what lies beneath the land — oil and iron ore, copper and gold. The move from hunters and gatherers to farmers relieved our need to fight for the hill with the apple trees or the field where deer spend their winter. With the industrial age came chemical fertilizer that allowed us to expand our ability to grow food, reducing the need to fight over arable land.
As we move forward from the industrial age, the abundance of solar and wind energy will dramatically reduce our need to fight over oil and mineral reserves.
So, what will be left to fight over? With the abundance of everything, from energy, minerals and food, we will be able to over-produce everything we need. Products will become cheaper and more available. With cheaper energy, full factory automation and robotics (including drone vehicles), everything will be available to everyone… all the time. The only thing left to fight over will be wealth creation: the customer. Even today, many companies view themselves less as manufacturers and more as tech, service or software providers, positioning themselves to “over-service” to build customers. How do you fight for customers? Like hunters and gatherers looking for prey, the first thing you have to do is find them. As more goods become abundant, more customers will become elusive. Markets will suddenly appear in one area, disappear, and then appear somewhere else. T
o track new markets and customer expectations, we will need to rely heavily on data. A recent article in The Economist compared data to oil, suggesting that data is today’s new “fuel.” Today, the equivalent of past oil refineries are “data refineries.” Companies like Google and Facebook, which have developed ways to lure customers in and gather data, are the new refineries of the digital age. Data can also be compared to currency. The value of a company can be measured not by its dollar value, but by its active database. Just like unsold products in your inventory, data from Facebook that are a year old have limited value. Stored data also have a shelf life.
Using the tools of Amazon and Google, our industry could gather sales data by SKU from every branch in Canada — daily. These data can provide specific information each night to help build programs unique to each company’s request. That information would provide “customer hunters” with the extensive ability to track their “prey.” Data could go from stored to active and dramatically increase the value of participating companies.
The only thing stopping this from moving forward would be the reluctance of companies to share data.
In the industrial age, as oil was beginning to dominate, John Rockefeller created a refinery that produced a standardized quality for oil. He made oil a tradable commodity and called his company Standard Oil (today in Canada it is known as Esso).
If we do not take advantage of current technology and realize the power of data, someone else will and we will end up competing with them.
Rick McCarten is VP, Operations, Electro-Federation Canada.
Article was originally published in Canadian Electrical Wholesaler[:]