Yesterday I wrote about strategies entrepreneurs can use to build new Open Data companies. But long-established companies can also use Open Data – to improve current operations, assess new partnerships, manage investments more effectively, and connect with customers and increase customer loyalty. Here are seven Open Data business strategies for the New Year, adapted from my new book, Open Data Now.
1. Use Open Data to evaluate business partners and potential investments. Between increased SEC reporting, new digital investment services, and new websites for investors, more data than ever is available on public and private companies, and it’s in more usable forms. Any business or financial firm considering a company as a partner or investment prospect should use these new sources as part of due diligence.
2. Release and use environmental, social, and governance (ESG) data. So many companies now release ESG data that a failure to do so may raise questions. Investors, shareholders, and consumers are demanding it. That’s why so many major companies now participate in the Carbon Disclosure Project and why others are releasing data through systems like the Global Reporting Initiative. By publishing ESG data and, more important, by following sustainable business practices to begin with, companies can attract investment capital, top talent, and consumer goodwill.
3. Build customer loyalty by giving customers their data. There’s ample evidence that consumers are interested in data about themselves, whether it’s their medical records, cell-phone bills, or shopping history. In the United Kingdom, through the government’s midata project, major energy companies, telecom companies, and at least one major retailer have given data back to their customers as a loyalty-building strategy. Some American utilities are doing the same thing, and businesses in all consumer sectors have an opportunity to use this approach. The federal government has led the way by developing the Blue Button initiative for health care and Green Button program for energy.
4. Use the social web and practice social customer service. Review sites, blogs, and Twitter can tell you more about your company’s reputation, good and bad, than most focus groups can. Monitoring the social web and the Open Data derived from it can be a primary source of marketing intelligence, as experts in sentiment analysis are finding. At the same time, using social media to reply to customers’ concerns—not just using the web for promotions or branding messages—can be an effective brand-building strategy. That’s especially important when it comes to handling public customer complaints. The founders of the complaint site PublikDemand call this approach “social customer service,” and banks are starting to use it to respond to complaints that come to the Consumer Financial Protection Bureau.
5. Experiment with open innovation. Sharing scientific research data early on may not just be idealistic: it may be good business. By releasing early results as Open Data before they’ve pointed a clear way to marketable products, drug companies may be able to accelerate R&D significantly. The Human Genome Project has been a model for open innovation of this kind. The benefits to public health are clear, and there are potential business benefits as well.
6. Learn to operate in a see-through world. Truly proprietary information—a company’s analysis of its customers, its business strategies, or its internal R&D—should never become Open Data, and no one is proposing that. But the aspects of business operations that affect the wider world—a company’s environmental record, its labor history, its political contributions, its adherence to regulations—are rapidly becoming an open book. In these areas, expect more government mandates to release data and more experts who are adept at interpreting it. And expect more transparency about corporate relationships and structure as sites like Open Corporates develop.
7. Look for public/private partnership opportunities. Federal agencies may be able to partner with companies that can make government data more available and useful, both as a public service and because those companies want to analyze the data themselves. The government’s Open Data Policy focuses on setting rules for data management going forward rather than detailing what should happen to the masses of data that have already been collected. The private sector can help put that voluminous resource to use. In one of the best examples, Google has worked with the U.S. Patent and Trademark Office to make patent data dating back to the year 1790 available to the public for free in an easily searchable format.
- Joel Gurin, Founder and Editor, OpenDataNow.com