Profit from Customer Data by Identifying Strategic Opportunities and Adopting the Born Digital Approach

We present a framework that maps the four data-driven strategies—Minimize Costs, Reward Loyalty, Personalize Interactions and Acquire Customers—that a firm can enact to extract value from its customer data. The four strategies are distinguished by the potential repurchase frequency and the customizability of a firm’s products or services. We describe each of the strategies and provide in-depth examples from companies in the hospitality industry. By positioning themselves within the four-strategy framework, firms in a wide range of industries will be able to envision how they can adopt the most appropriate strategy (or strategies) for exploiting customer data to improve profitability. We also discuss the importance of “born digital†data, whereby data is captured in digital form, not digitized through scanning or manually input. A proactive born digital approach enables firms to better exploit opportunities for extracting business value from customer data