How and Why Companies collect user data for data analytics purposes and how they use it.

Data is the new Oil of the 21st century. Deny it, disregard the information, but it doesn’t make it any less true. Data rules. Businesses devise strategies around the Data they gather from consumers and users.

In this era we live in, I believe it is important that entrepreneurs learned how to follow the new business rule that has swept across the entire business world. Businesses now thrive on data. Facebook, Instagram, LinkedIn, all collect massive amounts of user data and these Big Data is carefully analyzed.

Data has become integral to the model of many businesses that exist across the Globe, across different industries. Tools and software that capture and analyze data has proliferated across the Corporate world, and so also is the ability to conceptualize these Data and draw deep insights from them for use to draw up business strategies and drive more focused products and services to their target demographic.

How do businesses collect user/consumer/customer data?

There are several tools through which businesses gather data from the users of their products and services or from specific targeted audiences. Businesses can draw data from the far reaches of the Web and then use that information to conceptualize ideas and bring deep insights to top Management.

Users usually give up their data to companies either voluntarily, or indirectly when these businesses track their online behavior, or even when they use third-party systems to track user information and behavior.

For example: I have recently redeveloped a deep interest in the epic fantasy movie trilogy: The Lord of the Rings–LOTR. I have been on Google asking questions about when the new intended series is going to be released. I also looked up several notable quotes and characters from the series, alongside some of the extremely soundtracks.

Days later, I opened my Gmail to see a new mail from Pinterest. The pins featured on the mail I received bordered exclusively on the characters, the actors and some trivia from the Peter Jackson movies.

Someone who doesn’t understand the new business model we operate in the world now where Data rules would say it’s a coincidence. But is it, really? I’ll leave that for you to answer, dear reader, though I have my own conclusions drawn. I mean, from me conducting elaborate searches on Google for LOTRs, to me receiving emails from Pinterest about LOTRs which I’d been searching for.

Converting Raw Data to Deep Insights and Industry Knowledge

Companies with the means and the software to do so collect huge amounts of raw Data. And when these Data comes in, it is generally too much for ordinary humans to study and understand, on their own.

However, thanks to AI and other machine learning algorithms, it is relatively easier to study these raw Data and then convert them into a knowledge base that can be applied across specific sectors for specific purposes, with a fair understanding and knowledge of how the applied data is going to work.

These make data analytics an interesting area for companies to delve into, particularly if they have the means and the technically trained professionals with the right tools to apply this knowledge.

How do businesses use their Big Data?

Businesses can use the large amounts of data they gather for a variety of purposes, which can range from sale of such gathered insights, to turning them into cash flow, to improving customer experience and clinically refining their market strategy.

It is worthy to note that with governments understanding the importance of data to businesses and seeing how data gathering is done unscrupulously, Data Regulations have sprung up all over the world to control data collection, transfer and usage. Some countries own the data collected within their States (think Communist China); others require companies to house the data of citizens collected in data collection centers situated within their borders (think Russia). . .many others are more interested in keeping some companies out of their States because of the risk that these companies will gather citizens’ data and turn same into market Intelligence (think USA banning Chinese Huawei from entering its tech market).

In spite of all these, we should all note that data collection will never go away; instead, companies, governments, Strategy Firms, will merely look for innovative ways to refine the way they collect data. After all, Data is a great asset both for business strategy development and for governments. Everyone will simply adapt to new Laws and Regulations; furthermore, several other players are realizing the value of data over mere hypothesis and will join the fray.

In other words, build a business that can collect tons of data. The wealth is in the data collected and the potential uses for it.

If you have any insights on this, or any questions relating to data analytics, email me on