As companies strive to delight customers and differentiate from the competition, the concept of data wrapping is emerging as an innovative—and inexpensive—way to deliver more value. Simply put, data wrapping involves taking information that you already have, such as customer data, and using it to deliver more value by “wrapping” it around your current products and services. Unlike using data internally to support the business or selling your data externally to third parties, data wrapping focuses on using data to give more to your customers.
Some examples include, a bank offering customers a budgeting calculator based on their personal financial situation, a manufacturer offering a dashboard on equipment performance and maintenance statistics, or a ride-sharing company providing an estimated fare based on the length of the trip. By “giving” data back to customers, companies stand to gain big benefits in return, including improved products and services, increased profitability, and new ways to enhance the brand experience.
We uncovered a recent MIT Sloan Management Review article that takes a closer look at data wrapping, and how to do it successfully. According to the article, effective data wraps should do the following four things simultaneously:
- Anticipate customer needs: Anticipatory wraps offer customers predictive features and proactive advice. Examples include providing appointment reminders, maintenance notifications, and subscription renewals.
- Advise with evidence-based decision making: This type of data wrap helps customers decide what to do. Examples include providing advisories and insights that provide customers with more knowledge and information to make key decisions.
- Adapt to meet tailored customer needs: According to the article, this type of data wrap requires adapting the experience by meeting customer needs in a tailored way across different environments and contexts.
- Act to benefit the customer: These wraps are integrated into customer processes and are designed to automatically trigger actions to benefit the customer. Examples from the banking industry include automatic fund transfers for overdraft protection and scheduling of monthly bill payments.
According to the MIT Sloan Management article, success requires identifying ways to measure the value data wrapping delivers to customers, as well as to the business. The article goes on to say that, “Measurement is a twofold process. First, because data wrapping creates value indirectly, this should be captured with a mix of techniques like tracking customer usage, A/B testing, or controlled experiments and surveys. Second, companies have to pinpoint the source and magnitude of the value that they’re capturing: how much and in what way does this help customers?”
Are you ready to explore how data wrapping can deliver more value to your customers?
If you’d like to read more, including the importance for data analytics and product management teams to work together, see the complete MIT Sloan Management Review article.