Data. The trendiness of the word has begun to scare people away from it. But we all know that data is nothing new, however big or small. We’re just finally getting to the place where corporations are realizing its tangible value beyond simple market guidance.
Data is driving businesses on every front. From customer acquisition to hiring tactics, businesses that know how to crunch data are getting ahead. It’s not limited to one industry, or even one size of company—it’s something that any organization can take advantage of.
With that in mind, here are 5 online companies who are using data extremely well—setting a model as leaders in their respective industry. As they continue to innovate and shape the way that data can drive decisions, take note of their examples as you can apply them in your own businesses today.
Uber isn’t a perfect company. There’s no denying that recently they’ve come under fire on several different occasions. But what’s undeniable is their continued growth and popularity. And it’s no accident.
While news outlets try to lambast Uber for its imperfection, the transportation app continues to study data to improve its operations. Their “big data” is spoonfed to them as customers continue to integrate them more and more into daily life. As one article points out, Uber can use points of origin and destination to figure out where you’re flying to each month (one Uber car drops you off at an airport, you have another pick you up when you land in a new city), which clubs everyone is headed to on a Saturday night, and they can even gather massive amounts of traffic data.
All of this can then be sold (personally identifiable information intact or not) to companies in the same way that credit card companies sell aggregated transactional information. So not only is the information useful for their own improvements, but it’s also creating a whole new way for them to make money.
Uber also uses data for quality control and pricing. They can easily monitor and police driver’s acceptance ratings and quality ratings (ensuring that if a driver falls below a certain threshold for either, they’ll get kicked to the curb). But what’s more, they can easily manipulate the cost of a ride for their benefit, dubbing it “surge” pricing.
Calculating the costs automatically, using GPS data and their own algorithm, surge pricing takes costs one step further by calculating demand. Getting a small glimpse into the algorithm, using the publicly available developer data, one writer for the Washington Post was able to determine that surge pricing ultimately helps drivers to be smarter about which times are most valuable, and also helped to naturally improve the quality of service (measured in wait time) for high-traffic areas.
In short, Uber is the poster child for using data across multiple business practices. Their customer experience is improved, and they’re monetizing valuable data that they’re automatically gathering every single second.
Looking at another app, Waze is using road data a little differently. With a recent acquisition by Google, it’s clear that there’s plenty to be harvested from Waze, but less on the side of transactional customer data.
Instead, Waze is using its data to create partnerships with major cities in an effort to create more streamlined communication and improved traffic flow. While it got some bad press in Los Angeles, after users were finding “shortcuts” that created major back-road traffic, a partnership in Boston hopes to look different.
The partnership in Boston accomplished two things: first, the app will allow the city to communicate with its 400,000 users about real-time traffic updates. But more important to us, the city of Boston will be using the aggregated traffic data from Waze to adjust more than 550 signalized intersections to produce a more streamlined traffic flow that meets the best needs of its commuters.
Simply put, the data from Waze is literally changing the way Boston responds to traffic.
Buzzfeed has to be one of the most interesting companies in terms of its data use. Known primarily for their listicles, it may come as a surprise that Buzzfeed has become a powerful news source, generated more than $100M in revenue last year, and is nearing 200M unique monthly visitors. Their secret: data.
According to Buzzfeed’s data science blog, the company thinks about data in a very specific way. Practically speaking, that means analyzing over 2 Billion views every month of Buzzfeed content, combined with third party data, and asking questions of it.
That has evolved into a tool called Buzzfeed Pound. With Pound, it’s about measuring scale and impact to determine where things are getting shared or spread, and how the company can monetize those platforms. As viral content continues to evolve in the way that it gets consumed (and importantly, where), this can help Buzzfeed to continue to rake in those incredible billings, even when their content is not being shared on their site.
For Amazon, big data is being used to create small relationships. With the amount of consumer data that Amazon has to work with, it’s easy to think that their main use of data is basically just a giant recommendations engine. While that may be a part of it, they decided to take it one step further into a kind of personalization that helps a customer feel “known.”
Tracking customers’ pageviews, purchases, and personal information, they can solve ordering issues extremely quickly, send win-back emails when a shopping cart gets abandoned, and create email digests that target the products you’re most likely to buy.
But we already knew that about Amazon. What you may not have guessed about their use of data is how it applies to business functionality.
As you can imagine, Amazon’s ability to deliver millions of products across the planet at a rapid pace relies heavily on fulfillment centers. It’s an ERP manager’s dream (or nightmare?). To manage the nearly 1.5 billion products in its 200 warehouses, Amazon uses Hadoop’s Elastic Map Reduce on its own cloud based “Amazon Web Services”.
Elastic Map Reduce can quickly crunch and churn data on all of the warehouse items, roughly every 30 minutes, which according to an announcement at the Web 2.0 Summit, is how they reduce warehouse theft.
But if you’re not the Titan that is Amazon, you can still use user data in an incredibly effective way for a hyper targeted, curated shopping experience that grows your monthly users exponentially. Don’t believe it? Just ask Birchbox.
Starting with their line of curated beauty product packages, Birchbox was gathering big data right from its first client. Asking for information like hairstyle and skin tone, detailed customer information led to better personalized recommendations, as the company began to move towards some brick and mortar test-shops.
As Birchbox ventured out into other products and demographics, they learned from their own success and used behavioral survey data to determine what customers would want most out of the Birchbox for Men. With the new product’s success, they have continued to use this type of structured data gathering to make important business development decisions.
What’s important to understand about each of these companies is that they didn’t have to go out of their way to create big data. It was about using readily available data that customers directly and indirectly offered, and allowing that information to drive decisions and growth.
Big data isn’t just a trend, it’s a reality of your business. If you can learn how to use it well, it will help you to be smarter, more efficient, and ultimately a better company.