The Role of User Data in Business, User Behavior and Activity

These days, users’ data is playing a vital role in reshaping business models and marketing efforts of companies. I read an article which described Airbnb’s innovation to turn their product into a more user driven service, ultimately helping the company to grow at a rapid pace. According to Riley Newman, head of data science at Airbnb, “Data is the voice of your customer”. So, if your business is not growing according to your expectations, it is time to listen to the voice of your customers and analyze it for the cause and solution.

User data is not the same as user information

User data is a record of the actions performed by the users. It shows what they have decided to do with the product or service. For a lot of people, user data is just a fancy name for user information. Well, it is not. It is a collective information of user’s attributes and actions with your product. For example, a user searched for a product on your e-commerce website, stayed on the search result page for a while and then bounced off. Your system (Google Analytics) recorded all the actions. This is valuable information which you can analyze in order to determine the best tweaks that can be made in order to convert that user into a paying customer.

How you can utilize user data to improve your product or service?

If we consider Airbnb’s example, we can clearly observe the shift from the location based search results to a more user data driven product. A very innovative shift in the existing business model. After analyzing the users’ data, they realized there were too many random locations in general search results. So, they devised an algorithm that added weight to a location, based on its distance to the central point of the searched place.

For example, if a user is looking for “San Francisco” the places near the “Bay Area” would be on top, as the Bay Area is set as a central location in San Francisco. To add further relevance, locations previously rented by Airbnb users were given precedence.

Business insight funnels

Companies can create business insights funnels to answer growth related questions. For example, “How can we increase the revenue from iOS based visitors?” or “Why are we losing customers in the Middle East market?” The business insights funnels will help you to analyze user data to find a solution for your problem.

Types of user data may include, but is not limited to:

User action and interactions with the product or service. For example, paying for the service, using the product.
Data related to user attributes. For example, name, location, and contact info
User data related to social media activity. For example, reviewing product, sharing user experience of the product or service.

Wrap Up

Companies approach user data according to their needs. It is one of the most important aspects of any business and product. Neglected user data may not harm you, but it surely can affect your growth rate. Use it wisely to learn more about your users, so that you can make wise product decisions.