Turn Data into Gold: The Key to Achieving the Analytical Edge

You must have heard that “data is the new oil” and it is so true: everything turns into a success only when you collect the data and analyze it. If you are a comedian, you look at the jokes that made the most noise and the ones that tanked. Then, you go back to the whiteboard to rewrite and refine the jokes that work, scrap out the ineffective ones, and add new material. Similarly, a small retail shop can examine its sales data and analyze which are the best-selling products. This analysis will help the business to restock the in-demand products and discontinue the ones that do not sell or are loss-making.

While measuring data is crucially important, it is worth noting that businesses around the globe create tremendous amounts of data daily, which is more than a quintillion byte! To put that into perspective, it is an enormous volume of data… A LOT! Such an influx can easily overwhelm anyone. And if companies fail to deal with it properly, they can get stuck, which is often referred to as “analysis paralysis.”

Hence, organizations should not rush while examining the data and do it methodically. They need to define their goals and select the metrics and data that are most suitable to review. This will help them discover the most valuable insights for their business and strategically plan their way forward.

How do businesses source and use data?

Before the expansion of technology, businesses relied primarily on internal records and customer feedback to gather information about their customers and understand their buying habits. However, in this era of technology, organizations can tap into data from various sources, including:

1. • Internet of Things (IoT): Devices connected to the internet help companies receive real-time data on user behavior, product performance and environmental conditions. For instance, a smartwatch might provide health information about the user to various insurance companies, enabling them to assess users’ health status and medical condition, helping them examine the risks better and offer personalized insurance quotes.
2. • Social Media: Social platforms such as Facebook, YouTube and LinkedIn provide companies with a wealth of user data. These platforms help companies understand how their customers/followers are reacting and engaging with their marketing efforts and products.
3. • Public Data Sets: Government agencies often release various data sets that include market and industry analysis, demographic studies, and economic outlook. Companies can explore these data sets to anticipate the economic and financial landscape of their market or sector.
4. • Third-party Providers: These institutions or entities specialize in collecting and aggregating information. Companies can purchase data from them to gain insights into the behavior of their target audience or the market they are considering venturing into.

By leveraging data from these diverse sources, businesses can make informed decisions, anticipate market trends, and deliver enhanced customer experiences. The key lies in integrating and analyzing the data effectively to extract valuable and actionable insights that drive strategic actions.

Examples of Companies that Use Different Data Sets 1. Amazon:

Amazon did not become the world's largest ecommerce company just by luck. The e-retailer leveraged the user data it collected on its website and app. It is a no-brainer that Amazon has a massive amount of customer data that not only includes contact details and addresses, but also the buying patterns, behaviour, and financial details of the customers. There are even allegations against Amazon of killing competition. As many brands list their products on Amazon, the online retailer has an upper hand. It knows which products are performing well. So, Amazon is alleged to be copying the best performing or most searched products and then placing them on top of the search whenever a user searches for the specific product.

2. Netflix:

The American entertainment streaming giant, Netflix, possesses a wealth of data and analytics, which enables it to decipher the viewing habits of its subscribers. Netflix has been using the data it possesses to strategically curate and place each movie or series on the viewers’ app screen. The home page for each subscriber is personalized, displaying content tailored as per their viewing history. Moreover, Netflix even designs multiple posters for the same series to cater to diverse interests. A prime example is one of their most watched series “Stranger Things,” for which Netflix created a variety of posters emphasizing different genres and themes. Subscribers with a penchant for romance would see a poster depicting a couple, while those fascinated by horror would be shown the poster presenting the series’ scary villain. This targeted approach not only enriches the user experience but also significantly boosts watch time on the platform. Moreover, Netflix leverages data to gauge content that appeals to the global audience, subsequently producing and creating original movies and series around that genre.

3. Starbucks:

There is a famous story on the internet: Starbucks is a bank!

Various articles explain the reason behind that statement. So, you must have come across gift cards and Starbucks cards. These are loyalty cards that are connected to the customers’ Starbucks app. And why use a Starbucks card? Well, the more you use the card the more rewards you accumulate, which can be redeemed for drinks or meals. This helps Starbucks understand their customers and personalise offerings.

But Starbucks does not stop there; the coffee giant also uses data to evaluate demand and open new stores. This strategy helps it to open multiple stores in the same area, ensuring that none of its stores’ business is impacted. Starbucks analyses large datasets to determine the footfall each store in a location receives, the demographic and customer behaviour (spending pattern and order preferences). Harnessing the data helps Starbucks to make decisions on opening stores in areas that will bring in significant traffic to their stores and help in revenue growth.

I hope you can see that data reigns supreme, serving as a fundamental guide that is helping businesses navigate through the ever evolving and growing landscapes of consumer preferences and market dynamics. The examples of Amazon, Netflix and Starbucks highlight the power of data analytics in crafting business strategies and personalized experiences for fueling growth. As we are in an era where data analytics is imperative for companies, we should learn to gauge data and draw actionable insights. The true value of data does not lie in its volume but in its meticulous analysis and application.