On data, coffee and analytics


Twenty-five years ago, most people thought of coffee as a commodity. You'd be laughed at for suggesting that anyone would pay $5 for a "premium" cup of Joe.

My how times have changed. We've known for a while now that coffee isn't necessarily a commodity. The lines at my local Starbucks amaze me, and I pony up a decent amount every month for its Colombian brand at the grocery store. And don't for a minute think that this is US-specific. Across the globe in China, Starbucks has announced plans for significant growth.

In an era of Big Data, it's only natural for people like me to wonder what happens to the data behind every transaction (no matter how small), especially for increasingly data- and tech-savvy companies like Starbucks. (Read more about the company's partnership with Square surrounding mobile payments.)

Changing the Default Mind-Set

It turns out that Starbucks is hardly alone in recognizing the caffeinating power behind data. A recent article shows how British-owned Costa Coffee used data to drive loyalty and sales. From the piece:

Four years ago, we conducted research to understand levels of customer loyalty in our marketplace and were surprised at the high level of cross-brand use," Costa U.K. marketing director Kevin Hydes explains.

We thought we had a hard-core set of consumers, but the findings showed this was only partly true - 5% of our customer base drove 46% of our customer transactions - so we set out to find a way to build loyalty and create active brand preference.

As data permeates more and more of our lives, the default corporate mind-set will change from "Are we tracking this?" to "Why aren't we tracking this?"

Simon Says: Quantify This!

Think about it. If organizations can develop analytics like these on coffee, imagine what they can do in larger retail, healthcare and manufacturing environments. Those unwilling or unable to quantify important business metrics will find themselves increasingly at odds with larger corporate objectives. Follow, lead or get out of the way.


What say you?


About Author

Phil Simon

Author, Speaker, and Professor

Phil Simon is a keynote speaker and recognized technology expert. He is the award-winning author of eight management books, most recently Analytics: The Agile Way. His ninth will be Slack For Dummies (April, 2020, Wiley) He consults organizations on matters related to strategy, data, analytics, and technology. His contributions have appeared in The Harvard Business Review, CNN, Wired, The New York Times, and many other sites. He teaches information systems and analytics at Arizona State University's W. P. Carey School of Business.

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