Algorithms for Business (Part 1)
Leveraging Data For Business Intelligence and User Experience
The internet has come along way since ’90s when Tim Berners-Lee invented the World Wide Web. I doubt even he could recognize whats going on in today’s world or maybe he would, granted he is a computer scientist.
A few years after WWW, came the dot-com bubble.With it, the world witnessed the rise and fall of various internet companies. Among the “coach roaches” that survived the tech bubble include Amazon and Google. Much like the internet itself, these companies have metamorphosed over the years. Companies are adopting new ways in which they harness technology to innovate new products and improve on their user experiences.
So what exactly have they adopted that is so different? Important would first be to understand exactly what these companies are and what they do. For instance, let’s take a well known company like Alibaba. According to Wikipedia, Alibaba is a Chinese e-commerce company that provides consumer-to-consumer, business-to-consumer and business-to-business sales services via web portals. Isn’t that what they do after all? People go there to buy and sell stuff, right?
Although Alibaba is one of the largest retailing platform in the world, the founder and CEO Jack Ma has on more than one occasion said that his company is more than just a retail company. He prefers to think of it like a data company. Now, take a moment and breathe that in.
Ma’s description of Alibaba is valid. Boosting of close to a billion users, one can only imagine the size of the platform’s database as well as the amount of data the company has regarding its users purchasing habits among other things. Wait, I know what we are all thinking right now — they are probably selling user data. I personally don’t think that is what he meant when he said they are a data company, but different people hold different opinions on that subject matter.
A lot of the tech giants such as Google, Facebook and Twitter — although some might not admittedly say it — are data companies. The big data gathered by these companies are the ones that facilitate innovation, creation of new products and improvement on their users’ experience. Take Facebook for example. The company employs the use of artificial intelligence, machine and deep learning, in order to achieve higher conversion for their targeted ads. Ever wondered how Facebook serves you with adverts around the things you are most interested in? It goes beyond that to things like image analysis and so much more. Google, YouTube and Twitter do the same.
This then brings us to the topic of the day, how can businesses leverage the use of technology in order to improve efficiency, sales and profit margins? In order to keep the articles short and readable, I’ll divide it into a 3 part series: “Leveraging Data For Business Intelligence and User Experience”; “Productivity Tools For Businesses” and “Artificial Intelligence in Business”. I’ll give my opinions on importance of each component and what businesses/individuals can to leverage them.
Leveraging Data For Business Intelligence and User Experience:
Of course, companies like Google use more sophisticated algorithms in crunching and making sense of their data. However, how exactly does that small start-up with a small site gather data and more importantly how can it harness that data?
Back in the day, all a business had to do was get a good website that was highly optimized for search engines and wait to be “discovered”. Online brand visibility they called it. But like I said in the beginning, the world has changed a lot since then. In today’s world it is not enough to simply have a site.
What matters most today is how much you leverage that site to help you make more informed business decisions. Do you know how your monthly traffic? How about daily? Can you tell where the traffic is coming from? Which page do they go to most, where exactly on the page do they click and why are they prompted to that call to action button there? All these questions need to be answered.
Having such analytics can be the differentiating aspect between a companies that grows and innovates and the ones that stagnates. So the first thing is to collect this data. The purpose is not to use the data for malicious activities, but rather to improve on the user experience.
Tools such as Google’s webmaster tools have grown from simply showing you the amount of traffic your site gets to give more valuable data that can help you discern who your user are and where they come from. Cookies can also help you understand what people do in your site, how long they stayed and which call-to-actions they clicked. Try to understand what prompted these actions. Using newsletter can also be a way of gathering direct feedback from your users and finding out what it is about your business that they like and which aspects they abhor. Heck, you could even go the old fashioned way and simply leave a review form for them to give you feedback, still works doesn’t it?
What do such data do to your business and why are they important? As a business owner, it helps to think of your company’s website as an investment and like any investment — returns are very important. The notion that a site is simply a marketing tools is inaccurate. Yes, it’s true, a website is a marketing tool — but what good is marketing if you do not understand your users or what they like? What value does the site provide to your company is it does not convert?
Conversion rate is determined by its purpose in the first place. Conversion rate here simply refers to the number of users who perform the desired action(s). For instance, if you are an airline company — one of the key actions you would want a user to perform is book online. You’ll definitely have a menu and a few call-to-actions distributed on the site prompting the site’s visitor to click in order to move to the booking section. The question then would be, how many visitors do we get in say a month and of that number how many actually book online? It’s very difficult, if not impossible, to have 100% conversion rate but it’s important to optimize it to the highest value possible. Otherwise, what is the whole point?
Final thoughts on data:
We live in the information age, with more people than ever having the capability to access the internet through one mode or another. For any business to think that they are not a “technology company” is simply to live in denial.
The purpose of this article was to simply get everybody and especially business people to pay more attention to their website and to start to harness it more. The subject of data in itself is a huge one; the possibilities of what a data-driven approach to business can do are enormous. It, however, all springs from having the ability to collect, interpret and use data.
Start small. Begin by first having Google analytics and monitor, for a period, the traffic you get over that period. Three things will happen your observation: The traffic will increase, decrease or remain constant. The next step would be to understand those numbers. Why has it decreased, increased or remained constant? What can I do improve the situation? For the purpose of answering the next question, you will be prompted to dig deeper into understanding your users. And that’s how your journey into a data-driven approach would begin.
Important Note: Be open to your users about your methods of collecting data and what you intend to use it for. Don’t violate anyone’s privacy