Research project enables smaller businesses to improve the utilization of their most important raw material: customer data
It is crucial that small and medium-sized enterprises see the potential in their customer data. This information should not merely gather dust but contribute to growth and increased sales.
In Denmark, there are no valuable raw materials in the ground, but we have great knowledge and huge amounts of data. Which is why data is increasingly becoming the raw material that will enable many companies to generate value. However, when it comes to utilizing their data in the right way, small and medium-sized enterprises often lack the knowledge and concrete tools.
This is what a research project led by CBS will help change. In collaboration with DI Handel (DI Trade) and Erhvervshusene, CBS has launched the research project “Use Customer Data,” which is financed by Industriens Fond. The aim of the project is, among other things, to enable small and medium-sized enterprises, who trade in commodities, to analyse the large amounts of data they already have and thereby strengthen their competitiveness.
Specifically, the project will enable small and medium-sized enterprises to proceed from an overall understanding of growth opportunities driven by customer data to operational initiatives within individual companies by way of, among other things, events, workshops, and business development.
One year in, the project is now ready to present a model for the companies’ maturity in terms of utilizing customer data. Alongside the maturity-model, the project’s website also offers an open-source tool to benchmark a company’s ability and motivation to utilize customer data compared to more than five hundred Danish companies’ use of customer data.
Help with digging for gold
Professor Thomas Ritter from the Department of Strategy and Innovation at Copenhagen Business School is one of the main forces behind the project that will enable small and medium-sized enterprises to improve the utilization of their customer data. According to him, companies risk missing golden opportunities if they do not manage to utilize their data on, for example, customers’ shopping habits.
There are many examples of companies collecting data, which ends up ‘gathering dust,’ rather than contributing to growth and increased sales,
Thomas Ritter explains.
The Professor also mentions that most companies have access to their customer data, which is why the utilization of these data should be considered low-hanging fruits. Only, the companies lack both knowledge and skills.
Many small and medium-sized enterprises do not manage to incorporate and utilize data in their company – either because they do not know what to do, or because they do not yet have the skills to utilize their data systematically,
Thomas Ritter elaborates.
Companies’ lacking profits makes it hard to get started
In Denmark, small and medium-sized enterprises make up 99% of the approximately 300,000 businesses in the country. Which is why it is crucial that the companies see the potential in their data.
However, these smaller companies are challenged because they do not have the same resources as larger companies to analyse the huge amounts of data they already have.
Management in smaller businesses are busy with the day-to-day running of their company, and they lack both the knowledge and the tools to start optimizing the value embedded in their data,
says Professor Jan Damsgaard from the Department of Digitalization, CBS, who contributes to the project with a focus on customer insight through “Internet of Things”.
A survey among four hundred and forty-eight DI Trade members revealed that a third of the companies to a very high degree or a high degree required help to optimize the value gained from their data. This could be, for example, information on where the customer becomes aware of or locates information about the company’s products, which customers buy what, how often, how, and when, as well as customer behaviour when visiting the web shop.
This is what project “Use Customer Data” must produce solutions for. The goal is thus to help companies proceed from passive data to usable data by enabling them to analyse the large amounts of data they already have – rather than basing their sales on assumptions.
One of the project’s main aims is to make our results and models accessible to the small and medium-sized enterprises by way of knowledge and useful tools on our website. And in addition, there will be a series of live events,
Jan Damsgaard concludes.
The next event will take place on April 6th-7th, and the theme is “How to use customer data to make better business decisions”.
Facts about the project:
- As of January 1st, 2021, CBS, DI Trade and Erhvervshusene embarked on a three-year project: “Data-driven Customer Insight”, which is financed by Industriens Fond. The project’s website is BrugKundedata.dk
- The purpose of the project is, among other things, to provide small and medium-sized Danish enterprises, who trade in commodities, with the insight and the skills to generate growth through a data-driven understanding of their customers, which will then enable them to create data-driven customer segments in order to improve sales.
- The project focuses on small and medium-sized enterprises and start-ups, because several studies show that these companies are the ones that require the most support in utilizing their data.