Data has a predictive value
In 2008, I convinced the Board of ID&T to connect all data sources within ID&T, Q-dance, B2S and Sensation. This would give us an improved insight and allow us to make better decisions. This route formed the basis for the digital strategy. In my quest to find suppliers who could assist ID&T with this project, I came across Edwin Witvoet, someone who already had a solid understanding of the ‘big picture’ I had in mind and fully understood which overall objective would be served in the long term.
Edwin Witvoet has worked in the tech industry since 1995 and founded Jibe in 2007. This company assists businesses, organisations and artists making better choices in the area of marketing. By working with data in a smarter way, far more return can be made from the relationship with fans. Witvoet believes that data even has a predictive value: thanks to technological developments such as machine learning and artificial intelligence, patterns from the past lead to specific predictions for the future. He explains how you glean more from your data and fan relationship.
First dance industry project
Witvoet’s first dance industry project was the joint development of an own website and web store for each ID&T brand. This would allow festival fans to easily keep up-to-date with new developments and purchase a ticket faster. Together we ensured that the websites and web stores were secure and could handle many visitors. But we both knew that a secure good website and web store would not create the most optimum relationship with the fans.
That is why we discovered how we can create and use fan profiles to carry out the marketing in a smarter way. We were able to do this by creating a database of fan profiles and using this database in the long term. This prevents someone who, for example, was already a member of the Sensation newsletter not to be requested to subscribe again: a more efficient, faster and easier marketing approach was born.
“In addition, we were able to discover patterns in the data: visitors who, for instance, attended Sensation for many years over time changed into loyal Mysteryland visitors”, states Witvoet. “This enabled ID&T to learn at an earlier stage whether they should launch a new brand, adjust the programming or make other choices on the basis of insight into the fans. If you do not have that data available, you run the risk that you rely solely on your gut feeling. One’s instincts are not necessarily wrong, but it is no coincidence that increasingly more companies are opting for a data-driven approach: this allows you to take better strategic decisions.”
Increased insight thanks to data
“One of the ways in which you can get more from your data, is to monitor the ticket sales for a festival. You can standardise and optimise this process. Based on our experience and the available data from the past, we have basically discovered that three sales curves exist:
- A sales curve with a high sales peak at the start, where subsequently the curve slowly increases;
- A sales curve which gradually increases;
- A sales curve that gets going at a later stage, but has a peak just before the festival takes place.
Because we know how sales curves look, we know when you should communicate with your fans and when marketing efforts are most effective.”
“A comparison can be made between organising a festival and preparing for a marathon. Before you enter a marathon, you also go through certain phases. These phases all require a separate action: first you lose a lot of weight, then you churn through long distances and finally it’s time to commence interval training.”
“The lead up to a festival is the same: with certain efforts or budgets you can ensure that you can ultimately reach specific objectives. We assist festivals, artists and organisations to make the most of data insights and to prepare them optimally for ‘their marathon’. We do this by getting the correct elements from their data and recommending the right actions and promotions at the right times.”
Two objectives thanks to data insights
Data can contribute to the following two objectives, among others:
- Optimise the primary revenue model: by making data-driven decisions, the primary revenue model can be improved. This means that due to this you can make processes more predictable or more efficient and cheaper. Consider the Sensation newsletters: if you are aware whether someone has subscribed to that newsletter, then you do not have to make that person sign up to the newsletter again (via adverts);
- Developing new revenue models. Once your primary revenue model has been improved, your organisation will naturally find its rhythm. This means there will be more time and budget available for you to delve into the development of new revenue models.
“Currently, the majority of the market is able to achieve the first objective. Some parties are familiar with achieving new business models. However, it should be said that we are on the cusp of a business world in which the second objective, the development of new business models, will soon become a reality. Because many companies are on the cusp of their new revenue model, you get competition from non-sector competitors — and you will also have to look for new revenue models”, states Witvoet.
Predictive value of data
“As we have increased data in our systems, we are able to benchmark. Consider the various sales curves for festivals: if we recognise certain patterns, predictions can also be made based on the new data. If you know how quickly certain types of festivals sell, then it can be predicted when your ticket sales will enjoy a peak (if it does not sell out in a gradual pattern)”, says Witvoet.
The next step is the development of a self-learning system. “Here you can do machine learning or artificial intelligence, but these are technical results of the underlying desire to be able to make better predictions.”
Another example of the predictive value of data is the system that predicts whether a festival will be well-attended or not on the basis of social media activities. “You know what? The engagement surrounding a brand (that is: the level of connection between fans and the festival brand) is related to ticket sales. We have carried out an analysis for 250 festivals and noticed other recurring patterns.”
“It is not only possible to predict whether and how fast a festival will sell out, it is possible to group certain types of festivals. For example, if you enjoy the Lente Kabinet festival, then there is a fair chance that you will also enjoy Georgies Wundergarten festival. You can respond effectively once you know and understand the behaviour of your fans.”
Data predicted the end of Pitch
Recently it was announced that Pitch festival was closing its doors. A pity, because it was a real platform for talent breaking through. This came as a shock to some fans. However, when looking at the data, Pitch’s demise could have been predicted — and that the organisation could have done something to prevent the festival being cancelled.
How digital mechanisms work
A common principle here is the ‘relevance-consistency-discipline’. A brief summary of this principle: “Explain which content is relevant to be shared via the digital ecosystem. Examples within the dance industry are: news items, music and videos. Determine how often you wish to publish these aspects (consistency) and maintain this (discipline), because that is where the real challenge lies. Moreover: ‘persistence wins’. This is how to make the connection with the fan. The content consumption and sales will increase significantly.
Analyses are also crucial: they allow you to measure the effects of the performances in the digital domain. There are various tools, instruments and platforms for this. If you reveal the relevant content in a consistent and disciplined way, it will lead to an increase of the influence and reach within the digital domain. If you fail to be consistent and disciplined, you will immediately witness the consequences.
The Pitch graphs show that when you fail to participate in the digital domain, you instantly see the consequences. If the influence decreases within social media channels, then the average visit in the own domain also drops rapidly. At that moment you can see that a festival does not follow the ‘relevance-consistency-discipline’ principle. Then it is very likely that there will be dire consequences. In the case of Pitch, it is evident that the involvement of the fan has dropped significantly in recent years, and is zero when the festival season is over. And that the number of fans no longer grows. Now the festival is gone. This says it all — and should unquestionably be considered a warning.
Comply with new legislation using blockchain
From May 2018 it is mandatory for companies and organisations to proceed extra carefully with consumer data. According to the new General Data Protection Regulation, they are, for example, no longer permitted to use data if they do not indicate in advance what the data will be used for, and data can no longer be stored for an indefinite amount of time.
The effects of this legislation are extremely drastic for companies. “Thanks to this legislation companies will first have to delve into which data they have and which data they use. This means that there are possibly even more companies that will start using a data-driven approach.”
Consumers naturally benefit from this changing legislation. “You gain insight into your ‘data wallet’ (the place where your data has been stored). The control over the data remains with the consumer and ultimately you can give permission whether certain data can be accessed or not, from one central location. For example, consider a dashboard, where you state whether your data can be used for each site, app or company.”
Witvoet is involved with a European project with Jibe, that will facilitate this dashboard via the blockchain. The blockchain is a ‘digital ledger’, where data is determined in a decentralised way. “Thanks to its decentralised nature, it can be automatically traced with which parties you wish to share your data and with which you do not.”
He continues: “This complies with the new data legislation. In addition, this gives the consumer the control over which parties can access their data. When we have achieved this, you simply have to tick whether you wish to share your data with Facebook, Mysteryland or Google, or not. This means companies have to convince you to allow them to use your data, forcing them to be even more relevant to you. Exciting times for companies who wish to improve their current business models or wish to develop new ones.”
Conclusion and recommendations
Before you can optimally start working with data insights and create predictive value, you must take the following steps as an organisation:
- Ensure data management: if you do not have data collection or data storage processes, you also cannot glean any benefits from the data in the long term;
- Strive for personnel with a digital mindset: after all, they are the most important players, rather than the computers and software that have to support these people. Here you can find 12 other important tips for an optimal digital strategy;
- Establish a data network and data ecosystem. A ‘layer covering the existing systems’ is the only scalable and affordable solution. Don’t forget: data comes from internal and external sources, both in structured and unstructured form. That data must be collected and connected. Read the most important information about data management here;
- Start using a solid framework that helps you manage using brand equity, brand reputation performance, marketing efficiency, business acceleration and business activation. That is: the Business Acceleration Framework. Here you can find information on how the framework allows your organisation to grow.
The result of this approach is that data is transformed from a cost item to a source of revenue. This is how the digital transformation contributes to the digital assets.
- This post is a pre-read of Part 4 — Chapter 1 of my new book ‘Digital Assets’ the translation of the Dutch publication ‘Digitaal Vermogen’.
- Also read the publication ‘EDM and the Digital Domain’
