“The future of the economy depends on data and analytics,” argues entrepreneur Adam Hadley, the founder and CEO of the data consultancy QuantSpark. The trouble is, he argues, too many of those who evangelise about the power of turning data into insight aren’t terribly good at delivering commercial advice that is genuinely actionable.
That warning will resonate with many companies that have drunk the data Kool-aid, often at great expense, only to be presented with a seemingly endless array of dashboards and decks. Translating that intelligence into competitive advantage – earning a return on the investment, in other words – often proves tricky.
It is this issue that QuantSpark set out to confront, Hadley explains. To be of any use, data consultancy has to offer a combination of strategy – understanding the business and its problems – and technical capability – providing solutions to those problems through data science and analytics. “QuantSpark is my way of trying to bring those together, along with an entrepreneurial bent,” he says. “It’s data science, but with a strategic lens.”
Hadley gives the example of a supermarket that wants to increase sales to a growing vegan customer base. The data will tell you this is a growing segment of the market, but which products do you sell and where? Using open-source data, QuantSpark is able to provide such a supermarket with a detailed picture of areas in which there are larger numbers of vegans living locally – and which stores they are most likely to shop at. The supermarket is then able to organise its stocks accordingly.
A good practical example is the work QuantSpark did with a leading retailer of shirts, which had previously built its marketing strategy around high-volume email campaigns. QuantSpark was able to convince the retailer to change tack: one problem was that the volume of its emails meant many did not make it past spam filters; and in any case, the consultant pointed out, most potential buyers aren’t in the market for a new shirt most of the time. Instead, QuantSpark built the retailer a model that predicted when any given customer might be interested in buying, so that it could develop personalised emails at just the right time. The campaign boosted sales by 10-20%.
It is this kind of initiative that will power competitive advantage in the economy of tomorrow, Hadley argues. “The businesses that thrive, especially in a post Covid-19 world, will be those that really understand how to service their customers,” he says. “That requires hyper localisation and personalisation.”
Take online sales, for example. Many businesses have rightly identified channels such as Facebook as a valuable means to acquire new customers. But many have little appreciation of what customer acquisition of this type is actually costing them, or how much customers successfully acquired are going on to spend with them. That makes it impossible to work out whether their investment in a particular sales channel is profitable, or where to concentrate their efforts for maximum effect.
“We’ve built a model that businesses can use to solve that problem,” Hadley says. “It will tell you how much you should be prepared to spend given the value of the customers you will acquire.”
Such work has won QuantSpark an increasingly wideclient base. It works closely with consumer-facing businesses such as retailers and leisure companies, but also counts a number of private equity houses – often investors in such enterprises – amongst its client base. A third strand of the business underlines the broad applications of smart data science – QuantSpark also works in counter-terrorism, helping technology companies to identify extremist material.
“We go from bananas to terrorists several times a day,” says Hadley of the varied nature of QuantSpark’s work. The key is to keep coming back to that point of competitive differentiation – providing actionable commercial insight.
“We’re an outrider – a small company competing with some big players – so we have to bring something different,” Hadley says. “We prefer working that way and we welcome small projects – we’re quite happy doing a three-week engagement if it is intellectually challenging.”
For entrepreneurs and small and medium-sized enterprises, such an approach might be a breath of fresh air. Many such businesses worry that data analytics has become something of an arms race, in which the largest companies are buying market share via their ability to spend huge sums on sophisticated technologies. QuantSpark’s argument is that it’s not what you put into a project that counts, but what you get out of it. That requires skills such as critical reasoning and commercial savvy as well as technical proficiency.