How do major organizations use data and analytics to inform strategic and operational decisions?

Businesses across industries can benefit from data in numerous ways with proper analysis which will enable a company to stand out from the competition. So, how do major organizations use data analytics to achieve better insights that engage customers and drives sales?

Here are examples of how three companies – Google, Amazon and Southwest Airlines – are using data to make decisions that increase their success and profitability.

1.Google

Google’s name is synonymous with data-driven decision making. The company’s goal is to ensure all decisions are based on data and analytics. In fact, part of the company’s culture is to discuss questions, not pithy answers, at meetings.

Google created the People Analytics Department to help the company make HR decisions using data, including deciding if managers make a difference in their teams’ performance.

The department used performance reviews and employee surveys to answer this question. Initially, it appeared managers were perceived as having a positive impact. However, a closer look at the data revealed teams with better managers performed best, are happier and work at Google longer.

The next question Google tackled was what makes a good manager. Google created the “Great Managers Award” to encourage employees to nominate managers they felt made a difference. Employees were required to provide examples of good manager behavior in the nomination application. Google also interviewed managers about their practices.

Using this data, Google established eight behaviors for good managers, as well as the top three reasons managers might struggle in their roles. Google then used this data to measure managers against these behaviors, enact a twice-yearly feedback survey and revise its management-training program.

2.Amazon

Ecommerce sites typically use data to drive profits and sales. If you’ve ever shopped at Amazon you have probably received a product recommendation while visiting the Amazon website or through email. This is an example of a data-driven business decision.

Amazon bases its recommendations on what customers have bought in the past, the items in their virtual shopping cart, what items the customer has ranked or reviewed after purchase and what products the customer has viewed when visiting the site.

Amazon also uses key engagement metrics such as click-through rates, open rates, and opt-out rates to further decide what recommendations to push to which customers.

By integrating recommendations into nearly every aspect of Amazon’s purchasing process, from product browsing to checkout, the company has found that product recommendations, in fact, do drive sales and increase the bottom line.

3.Southwest Airlines

It’s no secret airlines use data to track customers’ luggage, personalize customer offers, boost customer loyalty and optimize their operations. At Southwest Airlines, executives are using customer data to determine what new services will be most popular with customers and the most profitable. Southwest has found that by observing and analyzing customers’ online behaviors and actions, the airline can offer the best rates and customer experiences. As a result, Southwest has seen its customer and loyalty segments grow year after year.