How data becomes business opportunities

By Fong Yee-hung, Year 4 (Final Year) Student, Department of Management Sciences, City University of Hong Kong

This is why so many companies ask you to answer a tonne of personal questions to become a member of their loyalty club

By Fong Yee-hung, Year 4 (Final Year) Student, Department of Management Sciences, City University of Hong Kong |

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ypo June 16, 2016 City U feat Data for business

 

Have you ever wondered why so many companies want to offer you “membership” to their special loyalty “club”?

One reason is that companies want your personal information so they can use the data internally for customer analysis, developing marketing strategies, and business forecasting.

Let’s consider an insurance company. If a parent wants to buy an insurance policy for his child, he needs to provide the insurance company with a lot of personal information, including his name, gender, age, contact number, income, and health condition.

This information helps decide whether to approve the policy and calculate how much the parent’s payments should be.

Clients are placed in different groups according to their total yearly payments, marital status, age, product type and so on.

Analysts can also use the data to tell how well the company’s business is doing.

For instance, they can tell which products sold the most in the past quarter, or which age group is the target customer, or what the buying behaviour of a specific group is.

If the company wants the parent to enjoy their experience more, or they want to find a better way to keep existing customers, they can perform data analysis to find out which product could be sold to that person.

In addition, various marketing campaigns can be used to increase customer loyalty and satisfaction.

Companies can also use the data to build statistical models for making predictions. They can interpret these results to identify which factors are important for estimating sales and trends.

As you can see, there are many benefits to using data analysis in business.

Firstly, it can easily identify potential customers and the most valuable customers. Secondly, it can help maintain competitiveness and market differentiation. Thirdly, it can provide more “upsell” opportunities and help maintain closer relationships with customers.

The data can help businesses run more smoothly and more efficiently. And as technology becomes more advanced, all of this data is generated at a faster rate.

Welcome to the era of data!