This guide’s aim is both to help you determine whether you need a data consultant for your data related business questions, AND if you know you need one, help you find the right consultant who fits your business needs.
Although you can use our guide for almost any industry you might be working in, we specifically work with retailers and thus this guide has parts that are especially focused on retail analytics related questions.
Avoid common mistakes and pitfalls in the search for a data consultant and leap over its challenges like you’re doing hopscotch with our guide.
Have you seen those “How to” videos and articles in which you are searching for an answer to something and instead of just that: the answer…you have to scroll through the artistic ramblings of the author?
Right, so this is not one of those articles.
Let me get straight to the point with a table of contents:
- Why it makes sense to hire a data consultancy in the first place
- At what point is it feasible to work with a consultancy?
- Where do you start searching for a consultant?
- What questions should a good consultant start with?
- How can you determine whether a consultancy is competent?
- How does a consultancy price their services?
If you know exactly which of the above you are here for, go ahead and skip this part.
If you however feel like you need some more information on why it makes sense to work with a consultant or consultancy, then read on.
(Also: yes, consultant and consultancy are used interchangeably in this article, although both project cost and timeframe wise a freelance consultant and a consultancy will likely have very different details. However: the point of working with one and how you can decide is pretty much the same.)
Why does it make sense to hire a consultancy?
The point of a data project and improving your operations by adopting a value driven approach is -very roughly- to be more precise with less waste. With the never before seen amount of businesses and customers on the market, data analytics has become a crucial tool for businesses that want to stay relevant.
However the market is long past the days when basic data analytics meant a competitive advantage. Advanced analytics is unavoidable for long-term growth and competitiveness. Without that, you won’t be able to provide accurate offers for your customers, which means their experiences will be suboptimal and their loyalty will fade. In simpler terms: you won’t be able to sustain your customer growth or even your current base in the long run.
Most companies – certainly ones that would read articles such as this one- will usually have some level of data analytics knowledge in-house. In our experience this means a few BI personnel and some sort of data analytics tool like Tableau, Power BI etc. That is a great starting point, however as mentioned above, basic data projects will not help to build a sustainable growth strategy.
When it comes to advanced data projects with specific requirements of a company, however great a tool is, it should not be expected to plan and execute these use cases.
That is why, when you want to build a long lasting growth engine, involving experts for your data projects is a no brainer.
Right. But when is that?
At what point does it make sense to involve data consultants?
Involving data experts does not necessarily have to wait until you have already gained some experience in data analytics in-house. The pros of having a data team in-house is that you are likely already committed to and on the path of creating a data driven organization.
On the other hand as per above, you will not be able to base sustainable growth on a small in-house team and “one-fits-all” tools. Involving data experts early on then means that you are able to avoid some costly (not just money wise) failures that may even break down your enthusiasm.
So whether you are already doing some data analysis in-house, which you’d like to advance to the next level or you are at the base line merely recording some data, without being sure on what to do with it… talking to experts is a good idea.
To simplify the question of when:
- If you already have ongoing data collection in your business but you’re either:
- Not sure how to capitalize on it → You roughly know what you would like to achieve (e.g.: you want to target your customers more precisely at the right time, with the right message, on the right channel; you would like to predict your stocking and logistics needs more accurately so you can optimize your sortiment range etc.)
- You have second thoughts about the way you’d like to use the data → Instead of a short term benefit of a basic use case such as tweaking your online ads, you are looking for something more complex with a long term benefit like customer segmentation
- You don’t have an expert with the specific skills or demonstrated history necessary to run advanced data projects → This one is quite straightforward, if you have a small team of BIs, or relatively inexperienced data engineers/analysts in your data team, it makes sense to do a few workshops or a joint project with experts so that your team can carry on with expanded knowledge
- You know that you should be able to get more out of your data → This point is somewhat of an extension of the 1st point in the list. If you are already collecting data but you do little with it and you know that your competition gains way more from data collection (i.e. you get better recommendations, are targeted better etc.), then you’ll certainly benefit from talking to experts
- You have had issues with optimal budget allocation…or in more simple terms, you are spending too much on too few customers. It could be as a result of challenges with customer retention, campaign efficiency or issues with your offerings → All of the above can be improved upon and fixed by getting better at using data provided by your customers
- You don’t know how to create a roadmap from collecting data to exploiting it → Even if you are already collecting data, you might not be able to tell whether you are collecting the right information, or how to synchronise data from different sources. It’s one thing to collect some data from your customers, but it requires specific expertise to know what to collect and how to turn it into gold.
- You are looking to base your decisions on actual data, i.e. you want to implement data driven methods in your business operations. → This is somewhat related to all of the above. If you feel like you could improve your business processes by adopting a data driven approach (you are right about that!), you could also seek the help of data consultants.
Right, now you know when it is appropriate to work with a consultant, so let’s see:
Where to start searching for a data consultant
For a quick detour let’s jump back to the consultant vs consultancy question I’ve mentioned before. When it comes to working with data experts there are -very basically- 4 variations of 2 roads. You can either hire a team of consultants or a freelance consultant or “rent” a team or a freelancer.
Both have it’s pros and cons. While a company (consultancy/team) will likely have a stable background (with insurance policies, guarantees) and in-house talent (with a variety of skills), a freelancer or freelancing team will likely be able to work on a somewhat smaller budget and could be more flexible with their availability.
Now back to the question of where to find a great consultant.
When you are looking for a freelancer in general it helps to base your search on social platforms, where you could somewhat easily get feedback on a candidate. The most obvious choice would be either Upwork as one of the biggest freelancing platforms or Linkedin, where you could check out previous projects of candidates and if their profiles are well maintained you could get some feedback from previous clients of theirs. You could also check out forums (Reddit / Quora) or communities (Slack / Discord) to find viable candidates and feedback on their work. Besides the forums could also go by personal recommendations as you probably are familiar with other retailers who may have faced similar challenges in the past.
When it comes to a consultancy firm you can probably more easily find those with a search. You will most likely be able to select between major consultancies that work with a platoon of industries and smaller ones that specialize in certain areas. Not surprisingly major ones will likely have less industry focus and higher fees, with more people working on each case. It would make sense to check out ones that are active on forums and social platforms (Linkedin mainly) and especially ones that generate useful content.
You know, like a great article on how to find a great consultant.
Generally great consultancies will put in the effort to detail these steps.
Anyway on to our next point.
What are some of the questions a great consultant should lead with?
Since you are running a business, this will likely not be your first business agreement with a professional. Still, it could help to discuss in broad terms what you should be hearing from a great consultant.
- They should definitely ask a lot of questions. Whenever a professional leads with how they will solve whatever problems you’ve got, that should raise a flag. It’s one thing to list the benefits of a service in a pitch, but when it comes to discussing details, a great consultancy should always ask loads of questions. It shows that they are actually interested in solving your problem and not just selling you their service.
In the case of a data consultant this would mean a mapping of your data inventory and at least a surface level audit of your operations and current processes. It is also crucial for them to understand how their solution will fit into your system. Both from a business and technical perspective.
- Now it’s great if a professional asks a lot of questions, but that only has value if then they set up a clear set of options. A roadmap with possible directions to take and the expected outcomes of said directions.
In this case, the data experts should base the potential projects you can select from on the data maturity of your organization and the -likely roughly- defined goals you would like to achieve.
- Finally, once the experts have audited your business and drawn up some options to take, they should guide you in selecting your first/pilot project.
The idea here is to draw up a project that will have an actual effect on your operation (in the form of revenue, resource optimization etc.), but more importantly, that will help you understand the process of a data project and will pave the way for a value driven transformation.
By now (if we did our job right) you have a basic understanding of what to expect from a great consultant. However what if you are specifically looking for someone who is not only a great consultant but is specifically skilled and experienced in retail analytics?
How do you know that a data analytics consultant is competent in retail analytics
To be able to create a sound data strategy for retail, a consultancy should understand some key aspects of retail…even better is if they have actual experience with retail companies.
Some of the aspects a great retail consultancy should be aware of:
- A general knowledge of customer analytics. What a customer journey looks like, what statuses can be attributed to a customer, how a customer life cycle builds up.
- How operations and the buying process work specifically in retail? Which areas are responsible in certain decision making processes, what are the main channels used.
- What are the key bottlenecks in retail operations? What are some of the biggest challenges they have to overcome?
- General data knowledge in retail and the main pain points.
- Extensive methodology know-how: How certain business needs can be met by data based solutions.
They should also have a clear vision on what route to take based on your specific goals and needs.
Now then. You know when, where and how to find a consultant. You even have a grasp on what they should know…
Let’s talk money.
How does a good consultancy price their services
This – no surprise – can depend on a platoon of things.
One thing is for sure though: a great consultancy will not provide a large chunk of work free of charge for you.
Any experienced professional will know that for them to provide valuable, personalized service they need to use their expensive resources. Thus if someone does work for you free of charge, that is either a fragment of what you need, or likely not very valuable.
When it comes to pricing strategies consultancies will often either ask for a fixed price with a money back guarantee if you are unhappy with the process…
Or they might ask for a commission. The latter of course only applies if the project directly affects revenue or the success of an ongoing project on your end. If the consultancy has a commission based solution, that will likely be a higher end cost, compared to the fixed price solution.
Some consultancies may also be open for a daily fee with a transparent daily reporting agreement. However since most of these data projects should run for at least a few months, this can be tricky. In case someone decides that the money you’ve been spending on the data projects should be allocated to a different department, you can end up with an abruptly abandoned project that has already burned through some money and might never be finished.
In any case, the key is that the consultant or consultancy openly communicates about their pricing so you may find a mutually beneficial solution.
I hope now you know enough about the “how to-s” of retail analytics consultants to be confident in your search. If you feel like you’d like to test your newfound knowledge on a great consultancy: let us know.