Data is becoming a valuable commodity, like oil in the 20th century. Here’s how companies should be using it.
Demand for data has been surging over the past few years. Companies are rushing to adopt in-house data warehouses and business analytics software, and are reaching for public and private databases in search of data to kick-start their artificial intelligence/machine learning (AI/ML) strategies. Due to the growing demand, good data is becoming a valuable commodity, like oil in the 20th century, and companies are beginning to compete for the most lucrative reserves. In order to understand why data is important for your business, you must first understand the five reasons if gives you a competitive advantage.
Data is a source of insights.
Until very recently, companies did not realize that they were sitting on a goldmine of data and did not know what to do with it. With the revolutionary advances in data mining and AI/ML, companies can now make use of data generated by consumers and users. A really good example is how Moz used artificial intelligence to predict customer churn. It has designed a deep learning neural network that analyzes user actions and is able to predict the behavior of users. Since actions customers are about to perform within the system are caused by a vast variety of factors from the past, it makes it possible to mine some valuable business insights and decrease churn of existing customers, which has an enormous effect on overall company growth. Data analysis and data visualization facilitate data-driven decision-making that finds hidden opportunities in consumer data, like when Target figured out that some of its customers were pregnant before their families knew it.
You can leverage offline data.
Until very recently, online consumer activities such as search queries, clicks or purchases were the main sources of data for large enterprises. However, as it turns out, data is abundant in our physical environments and offline experiences as well. Large tech companies like Amazon are already introducing corporate surveillance strategies in grocery stores across the world. New sensors and actuators installed in shops can collect data about consumer preferences and behaviors. Drones, AI personal assistants and IoT are other examples of tools that can turn every single moment of human lives into valuable data.
his data will become a driver of price setting algorithms that will react to changes in consumer demand. Uber has already begun using this model in its price mechanism. Other companies will soon follow suit, integrating business intelligence solutions into smart malls and city infrastructure. Those companies that stand on the bleeding edge of this innovation will have the best opportunity to extract value from consumer behavior.
Data helps you manage your online reputation.
When your consumers post thousands of comments and reviews about your products and services on social networks and forums, it might become hard to manage your online reputation. Luckily, however, there is an upside! Consumer feedback can be efficiently turned into data that can be analyzed using state-of-the-art AI/ML models and tools.
One of the most promising directions is the sentiment analysis that uses NLP (Natural Language Processing) techniques to understand dynamics of users’ emotions and feedback. To benefit from these techniques, you can create a Facebook application that will retrieve and analyze public posts about your company using sentiment analysis approach. With sentiment analysis, one can also identify positive and negative reviews of your products on ecommerce platforms such as Amazon.
Also, knowing the sentiments related to your competitors can help companies assess their own performance and find ways to improve it. One of the greatest benefits of sentiment analysis for managing online reputation is automation, since it can be hard (and expensive!) to process tons of user feedback manually. Turning feedback into data to be piped into your business intelligence software is one of the most efficient solutions that will set you apart from the competition.