What stakeholders need to hear to invest in data strategy.
By Wallace Cheung, Data Expert, The Plant
Big impact data projects demand big upfront investments – in resources and in time – and getting buy-in can be a challenge. The payoff might be obvious to the person pitching a project, who already believes in its potential to optimize marketing strategies, improve UX, or grow revenue. But for those who need persuading, how do you put together an effective business case?
We’ve learned through experience that attitudes to data strategy can vary widely, from unrealistic expectations about what it will achieve, to indifference. We’ve also seen how those attitudes can shape radically different interpretations of the same pitch, so that data enthusiasts pursuing a particular vision of a data-driven future end up failing to anticipate objections from sceptics.
While every case is unique, we’ve noticed that three cultural trends tend to stand in the way of strategic data projects:
We’ve worked on many data projects, and we think these trends are so common that they’re practically universal. But all three of these challenges are also especially pronounced in Japan, where a cautious business culture can block investments in data.
In this article, we want to share ideas about how to address these concerns. So you can bring stakeholders in, get the investment you need, and set data strategy that’s firmly grounded in business objectives.
Set a clear, quantifiable, and desirable objective at the beginning of your business case and then build towards it. Bold but non-specific outcomes, such as “optimized UX” or “data-driven marketing” are not persuasive without detail. They may be broadly true, but the lack of specificity rings alarm bells for risk averse investors.
An example. Your data strategy might have the goal of increasing customer retention, and it might approach that goal along multiple avenues, with some outcomes that are hard, if not impossible to quantify. But “increase customer retention” is too vague as an objective. A better headline target for the strategy would be “increase repeat purchases by 15%”.
From that central, concrete metric, you can break the business case down into specific data-driven actions that will work towards that goal. In this example, these might be:
If these three actions are mentioned without the objective to increase repeat purchases by 15%, they sound worryingly vague. The concrete metric gives them direction and purpose – it makes them feel real.
In the grand scope of a strategic data initiative, some of the early, minor achievements can seem small by comparison. You might even think that foregrounding quick wins might undermine your wider, more substantial goals. In fact, the opposite is true.
Highlighting small, measurable achievements helps to reassure stakeholders, making them much more likely to support big, strategic initiatives. A quick return on investment, no matter how minor, demonstrates that a project is effective, and that the strategy is on the right track. An example: a multinational quick-service restaurant chain was concerned about the poor performance of its web-based order platform, and approached The Plant for a solution. Despite its potential, the platform was generating low sales, and stakeholders were unsure whether to continue investment.
A quick dive into the platform’s behavioral data revealed a basic problem: very few users were even entering the platform. Further UX audits identified why: the platform only had one entry point, limiting its visibility.
The Plant proposed a quick win: improve access to the platform by adding multiple call-to-action (CTA) touchpoints across the website. This was a simple solution that required minimal development, and was quick and inexpensive to implement.
The results were immediate. An A/B test of the updated UI showed a +300% increase in traffic and a +72% increase in sales within the first month. This quick, quantifiable success helped to convince the business of the value of data investment, and paved the way for a multi-year, data-driven UX/UI optimization project.
Pinpoint quick wins likely to produce positive outcomes, and put them front and center in your business case. In our customer retention example, you might set a goal to increase repeat purchases by 5% in a month, by using data to target regular, high spending customers for an email campaign of exclusive discount offers.. Clear, concrete achievements – even simple ones – help convince investors that progress is being made.
A successful business case sympathizes with the concerns of stakeholders. It is entirely reasonable for colleagues to feel averse to risk, or unsettled by the scale of a digital transformation project. Their concerns deserve to be addressed. This should be the role of dedicated data leadership, but a business case should assist leaders, or stand in for leadership, where it is not in place.
Throughout the business case, emphasize how your objectives and methods match the company’s broader vision. For example, a strategy to improve retention is a natural fit for businesses emphasizing deep customer relationships. In Japan, especially, companies can be concerned that data-driven transformation projects come at the cost of established values. Stakeholders need to know that an embrace of data will not displace the core identity of a brand.
To be sensitive to this position, it may help to soften the language used around the proposal. At the Plant, we sometimes prefer to replace the term“data-driven”, with the less aggressive, but no less accurate “data-informed”. A “data-informed” business makes decisions by aligning crucial insights from data with its values and long-term goals. It leverages its data for competitive advantage without losing sight of brand identity, or the importance of human intuition.
The ideal business case should speak for itself, without having to rely on dedicated data leadership. So start with clear objectives and build out from there, emphasizing quick, measurable wins. Set out an argument that stakeholders can agree to, and give them the confidence they need to justify investment. Good luck!