Today, it’s quite clear that your ability to derive insights from data is the key to running a successful business. But most businesses barely scratch the surface of the kinds of data they could be using to their advantage.
Many ignore major alternative data sources that might yield valuable insights and actionable intelligence. However, it’s indisputable that alternative data sources represent an emerging frontier in the field of business intelligence’s ability to boost revenue. The question is which data holds the most potential.
Surveys on the subject help to paint a clear picture of the kinds of data businesses most frequently use right now, and they reveal that most businesses are still thinking inside the box when it comes to data use. That’s why you’ll find transaction data and systems logs — including internal website traffic data — as the two primary sources of business intelligence data in use right now.
Within the few businesses that have started to move toward alternative data sources, those sources are still narrow in scope. Most often, their sights are set on areas like signals from IoT sensors and digitizing information from analog documents. But those aren’t the only options. There are other types of alternative data that businesses could use to their advantage, especially if their competitors are ignoring them.
Here’s a deeper look at what alternative data is all about, along with examples that businesses should consider using for their analytics operations right away.
What is alternative data?
The most direct definition of alternative data is any non-traditional data source that businesses can use as a primary analytics driver or as a complement to existing data sources. In other words, it’s data that may yield insight on its own or when paired with other data sources.
A perfect example of alternative data in action is the use of cellular location data to estimate foot traffic near a proposed advertising site or retail outlet. In those cases, location data yields business insight that the business would otherwise not have access to. That’s what makes alternative data sets so attractive for businesses — it has the potential to give you an edge over competitors who haven’t thought to use it.
Competitor web traffic data
One of the most important forms of alternative data that businesses can mine for actionable insights can be found in competitor web traffic.
In the digital age, this information offers a way to understand the marketing and product strategies of the companies you’re aiming to compete with. Armed with these insights, you can adjust your business’s strategy to exploit the competition’s weaknesses or simply beat them at their own game.
That’s a major reason why competitor web traffic data and analysis is a key component of every high-performance market intelligence tool on the market today. Using this information, businesses can be nimble in the face of an ever-changing competitive landscape and stay one step — or more — ahead of the pack at all times.
GIS data
Geographic information system (GIS) data refers to stored data pertaining to locations on the Earth’s surface. It may include information about vegetation, structures, streets, or any other kind of information correlated to a particular location.
As an alternative data set, it makes an excellent supplement to traditional market intelligence data sources. For example, integrating GIS data with market intelligence signals can provide additional context in determining customer segmentation or when analyzing customer behavior on mobile devices.
That, in turn, may allow for more precise targeting in marketing efforts or even suggest correlations between particular customer behaviors and their locations.
Satellite imaging data
Satellite imaging data offers another valuable source of alternative data that businesses might use to their advantage. This is because satellites offer a visual perspective that’s unique and that can’t be replicated at ground level — and often make it possible to track changes on the ground over a given length of time.
A business might use satellite imaging paired with machine learning technology to try and spot patterns that correlate to other data points like sales, store visits, or other noteworthy business interactions. A retail store might, for example, try to identify the number of vehicles in their store’s parking lot as a function of their average sale value.
They might discover that they sell higher-value items at times of off-peak traffic. These signals, in turn, might let you know that your location has an environmental problem — like noise or airborne pollution — or that employees are more effective at selling when they have more time to focus on each potential customer.
Social sentiment data
These days, social media plays a key role for businesses as they seek to reach new audiences and communicate with their customers. But it can also be a valuable source of alternative data. One example of that is social sentiment data, which is created by mining the text of social posts for clues that speak to the mood and feelings of the person posting.
Businesses might use social sentiment data to measure the positive or negative impact of business initiatives. They could, for example, combine it with marketing campaign data to see if a given campaign is damaging their reputation in the eyes of their customers. That type of insight can facilitate smarter marketing decisions based upon more than bottom line impacts.
In some cases, it may even reveal that otherwise beneficial initiatives carry some negative long-term reputational consequences the business didn’t anticipate.
The bottom line
At the end of the day, there are far more potential sources of alternative data than those listed here. And there may even be some industry-specific data types that could prove valuable to businesses in their respective industries. The key point is that it’s worth exploring alternative data sources, as they may yield insights that prove decisive in competitive markets. The businesses that do so stand a good chance of finding ways to optimize their operations or stand out from the competition.
But time is of the essence. Before long, the alternative data sources of today will become the industry standards of tomorrow. The businesses that exploit them first will gain the greatest advantage.
