Target and Engage Customers with These Business Analytics Tips.
Nimble, digital-first companies have been able to out-maneuver larger competitors by integrating business analytics into almost everything they do. Uber and Lyft up-ended the transportation sector while Netflix became a major force in filmmaking. Amazon’s embrace of big data put it on the path to redefining both online and in-person retail. How did these companies do this and what can other entrepreneurial businesses learn from their success?
Business Analytics Examples
There are three methods by which disruptive companies can use large datasets, analytics, and strategy to drive others out of the market: high levels of customer personalization, entirely new and innovative business models, and radical cost-reduction. Below, we will examine how three household names did exactly that and what you can learn from these cases to benefit from data and analytics in your own organization.
Netflix Uses Customer Personalization to Take Hollywood by Storm
Netflix started reaping the benefits of big data and analytics starting in 2006. Remember when you would order a DVD by mail and Netflix would recommend more picks for you to add to your queue? It did this by using a history of movie ratings, rental dates, and a basic customer profile to guess which movies you might be interested in renting next.
In 2007, Netflix launched its streaming service and changed the game for not only video stores but also the movie and cable TV industries. With this new application, Netflix was able to gather more information about its customers’ behavior, down to how long they spent picking a title to watch, what time of day they watched it, when they paused it, when they re-watched it, and more. And as Netflix’s business grew, so did the complexity of the data it’s been able to capture, in a seemingly never-ending process of intelligence gathering and innovation.
At Netflix, the company’s strength in big data and analytics is used to enhance the customer experience at all levels, from title recommendations to imagery to advertising. The audience information it gathers and analyzes allows Netflix to target its audience effectively with original content and other recommendations, creating a consistently loyal fan base. Implementing technologies that allow you insight into the behavior of your customers can enable you to more effectively deliver what your customers want, giving you an advantage over your competition and allowing you to further penetrate the market.
Uber’s Business Model Transforms the Transportation Industry
Ease of service is the quality that makes Uber so appealing to consumers. Just a few clicks from a rider’s smartphone allow Uber to match the rider with a driver in seconds. The technology at the heart of the Uber enterprise has made ride-sharing a popular and eco-friendly choice for consumers. Taxi companies and public transportation are struggling to adapt with the same speed and efficiency. Uber’s data-driven business model revolves around improving the customer experience, streamlining location accuracy, and even determining pricing – providing a level of personalization missing from the traditional transportation industry.
Uber gathers data on its customers and drivers to design a synergistic experience. Each trip is automatically recorded by Uber through its app and analyzed using complex mapping and location analysis. Historical customer data is used to analyze usage patterns and determine geographic areas where Uber’s ride services are most in demand, so there is always a driver available and waiting nearby. Uber knows the vehicle model and location of its drivers; their rate of acceleration and the speed at which they drive; and whether they also work for a competing brand, such as Lyft. When you’re riding with Uber, Uber is using the data it’s collected from thousands of trips – in addition to its knowledge of city infrastructure – to predict bottlenecks and traffic jams, optimize your route, and predict your ETA.
Uber collects and analyzes data in real time, from the moment a car is ordered till some point after the passenger has been dropped off. This data is used to optimize the customer experience throughout, driving logistical efficiency while still allowing it to be flexible enough to fit the needs and the lifestyle of the consumer. Advanced analytics solutions, like the technology employed by Uber, can help you gain profound insight into the marketplace, helping you increase efficiencies, accelerate growth, and reduce costs.
Amazon’s Cost-Cutting Creates Options to Brick-and-Mortar
Amazon is king when it comes to cost-cutting, having started a revolution in e-commerce that has put brick-and-mortar stores on their toes. Amazon has analyzed massive amounts of data to keep its operating costs amazingly low over the past 24 years of growth and has passed those benefits onto the consumer in the form of deep discounts. For example, by crowd-sourcing its inventory in the early years, Amazon was able to offer consumers pricing options that they were unable to find at traditional sellers.
In 1999, Amazon patented the technology for its 1-Click Buy feature, allowing customers to circumvent the shopping cart and instantly purchase items using previously entered credit card information. Not only did this create value for the customer, it allowed Amazon to store the customer’s payment information, address, preferences, and other information in a database for future use. Instead of identifying trends in purchases or products, Amazon was analyzing specific information about actual people, grounding the company’s data and analytics firmly in reality and reducing the possibility of human error in its insights. Amazon was the first to control data in this way, increasing the accuracy of its analytics and leaving other e-commerce retailers to play catch-up.
This practice of collecting and storing specific data on actual customers was a game changer for Amazon – and for the e-commerce retail industry. Now common practice in many industries, there are multiple avenues for capturing this kind of data, from lead forms to subscriptions to social media. Identifying legit customers and analyzing their characteristics can help you narrow your focus and create solutions and marketing strategies that specifically address your ideal customers’ needs.
How to Harness the Power of Data in Your Organization
An important thing to note is that these former startups were able to disrupt the industries they entered because they changed the standard that consumers have come to expect from service providers. Netflix, Uber, and Amazon implemented technologies and procedures that allowed for groundbreaking instant gratification and ease of use. Some of their traditional counterparts have struggled to implement the same technologies that allowed these three to have such pertinent insights into the needs and wants of their existing and potential customers.
What does this mean for your business? You don’t have to invent a new technology to make your product or service easier and more efficient to use. Each of these three disruptors used deep knowledge of their particular customer base to help provide services with an unprecedented ease and value. Understanding your customers allows you to focus on how to meet their needs, driving efficiency, innovation, and customer loyalty at all stages of the customer journey. Personalization isn’t just for B2C companies; any company can take advantage of business analytics to create the most compelling experience for prospects and customers.