The Big Data-Driven Business

Chapter 7Using Data to Better Understand Customers and Pursue Prospects

Sergey Brin and Larry Page. Reed Hastings. Jeff Bezos. The founders of the most successful brands of the dot-com era built their companies with a data-driven customer focus as the cornerstone of their business model. “The balance of power is shifting toward consumers and away from companies.…The right way to respond to this if you are a company is to put the vast majority of your energy, attention, and dollars into building a great product or service and put a smaller amount into shouting about it, marketing it,” Amazon founder Jeff Bezos said in a 2010 interview with Charlie Rose, according to Inc.com.

But how do you consistently build great products? For companies such as Google, Netflix, and Internet radio service Pandora, collecting and leveraging data are essential to serving customers and creating great products for them. “If you look at the mind-blowing growth of some brands over the past couple of years, they're all brands that use data in new, intelligent ways,” said Brian Kardon, CMO of predictive lead scoring company Lattice Engines.

Data-driven, customer-focused companies use the data they amass as a matter of their daily business processes to understand their customers—both individually and en masse—better with every single transaction. “Once there was only radio, and now there's Pandora,” Kardon said. “Pandora is intelligent. It takes in all the data about what you like and don't like. Pandora ...