Teaching Old Dogs New Tricks with Data

The next era of competition depends upon an organization’s ability to optimize data assets to deploy customer-centric value creation business models. Is your organization staying competitive?

With today’s digitized consumer and ubiquity of digital channels, engineering data into the business model allows for radical customer segmentation, disruptive product customization and fundamental delivery innovation. Mass personalization and its sister, mass customization, are elements of customer-centric value creation business models and user-driven innovation. Companies will need to make data integral, not just incidental, to their marketing and product strategies.

Personalization is accommodating customers’ different preferences while providing an off-the-shelf product that matches their needs. Customization is modifying a product or service to provide a one-of-a-kind solution. Historically, personalization and customization have been local or niche markets focused on upper market segments due to the high cost of production such as custom homes, bespoke suits, custom healthcare and custom investing. Digital channels and the collapsing cost of data storage have turned this traditional trade-off on its head. The next wave of personalization will include those companies that create and capitalize on new emergent knowledge.


Mass personalization has been readily adopted by firms that use data to “match” individual consumers in markets that have an enormous range of products. Such is the case with books, movies, and music. Amazon offers more than 6,000,000+ book titles, Netflix offers more than 4,000+ movies and TV episodes and Spotify streams music from more than 1,200,000+ artists.  Amazon, Netflix and Spotify have leveraged consumer data to develop powerful recommendation engines that help consumers navigate the explosion of digital content. One-third of Amazon’s revenue is driven by personal recommendations and personalized emails. Spotify uses musical attributes combined into focus traits such as rhythm, syncopation, key tonality, vocal harmonies and displayed instrumental proficiency to select the next song to stream for more than 299,000,000+ registered users. These companies collect consumer data passively and avoid intrusive customer surveys and expensive focus groups.


The quest for fitness and insight into the quality of one’s condition frequently involves self-measurement. By increasing the data points available, the quantified self is becoming easier to construct, analyze and manage and is also generating revenue for sports and fitness-related consumer electronics providers.  Fitbit and Apple offer sports wristbands and smart watches intended to be worn continually to measure steps, calories burned and inactive time. Both can measure sleep time and set off a vibrating alarm to wake the wearer up. Each day, Apple Watch is tracking billions of steps and more than 700,000 hours of sleep. The Fitbit has an altimeter to measure elevation gained or lost, and it can also record weight if used with the Fitbit scale. Data can be synced with each band’s respective app to track progress against goals.

In healthcare, more affordable and personalized medicine is on the horizon. For $99, 23andMe offers DNA testing to report on 250 health traits and 40 inherited conditions and can be used for more informed healthcare decisions or personal ancestry research. From 2.5 milliliters of saliva, the Silicon Valley-based biotech firm can analyze 960,000+ specific sequence variations.


When movies and television became popular forms of entertainment, viewers were beholden to the theater showings or the studio broadcast timings. Digital content now offers consumers the opportunity to watch what they want, when they want and provides a new distribution channel for programming and advertising with high economic returns. The average price of a video–on-demand (VOD) is between $4.99 and $6.99 in HD, versus Redbox DVD rentals at $1.75 per day. Consumers were willing to pay up for convenience. New technology is being used for on-demand shows that not only prevent fast-forwarding through commercials, but also changes the advertising run after the three-day live TV advertising window ends. This allows for more time-relevant ads as well as leveraging demographic data to better target ads for subscribers.

Leveraging your organization’s proprietary customer data can help migrate from mass markets to segments of one. The next era of competition will increasingly be dependent upon an organization’s ability to optimize its data assets to deploy customer-centric value creation business models.

Contributed by Patrick Pawlicki.