10 Top Companies Radically Changed by Behavioral Analytics

By Scuba Insights

Business pivots can turn a struggling company into a thriving one. Whether changing the name and product completely or just altering company practices, looking at behavioral analytics is the best way to move forward. If you continuously ask: “Which people are churning? Where are they spending the most (and least) time?—you'll know where to go next.

 

Many companies have made these kinds of pivots--and wildly benefitted. Here are 10 stories of companies that found success by leveraging users' behavior to improve their products, each revealing a unique lesson about how to listen to your customers.

1. Instagram: From checking-in to photo-sharing

Instagram is now known as a photo- and video-sharing empire, but it started out quite simply. Co-founder Keven Systrom's original product was Burbn, an app for checking into locations, making plans, and sharing photos.

 

Initially, Instagram had a few zealous users but topped out at 1,000 total. A little while after Mike Krieger, the other co-founder, came on board, the pair decided they needed a pivot.

 

Looking at their user data, Systrom and Krieger found that no one was really using most of their features—but people were sharing a ton of photos. They decided to strip out everything else and produce a prototype solely for photo-sharing. They sent this prototype to 100 Burbn users and got more output in one weekend than Burbn had ever received in total.

 

So, Instagram was launched, which got 25,000 signups on its very first day. Systrom advises, “[Follow] what people love. If you just play user psychologist a little and you listen to your users and you see what they're focusing on and what they're ignoring...good things can happen.”

2. Yelp: From email to reviews

Yelp's mission has always been the same—to allow users to get word-of-mouth reviews. The idea was born when one of the co-founders needed a doctor but couldn't find any useful reviews online. However, co-founders Jeremy Stoppelman and Russel Simmons thought small at first. Yelp was originally supposed to be a site through which people could email their friends for recommendations, which would then be posted so everyone could see. This version of Yelp wasn't very successful.

 

But Stoppelman and Simmons looked at the behavior of their early users and found that many were writing reviews just for fun, without being emailed by a friend first. Once they decided to focus on letting anyone post reviews, the site took off.

 

Yelp underestimated its users' desire to share reviews with strangers and almost missed out on a fantastic opportunity. Don't limit your users based on what you think they'll be willing to do—provide them with a host of options and let their behavior tell you what they want.

3. Southwest Airlines: From guesswork to the perfect routes

Southwest Airlines is now a huge proponent of using data for everything, from personalizing service to saving money on fuel. But they don't let customer behavior dictate tailored customer service—they use customer behavior to make some of the biggest decisions at their company.

 

In the airline business, you need to make sure you have the right flights in the right places. The way to do that is to look at the demand for various routes. But Southwest went a step further by also keeping track of the city pairs which are searched for on their website, not just booked. Thus, they got a real picture of which flight routes customers wanted.

 

Southwest attributes its continual growth in new customers and loyal customers to its data-based philosophy. At Southwest, they believe data should be self-service and interactive, so any employee can explore data. And when everyone is interacting with the data, you have a much better shot at estimating future demand.

4. Groupon: From politics to retail

What is now Groupon started as The Point, a site for organizing people to action. The idea was that there were many events (boycotts, protests) that individuals wouldn't be willing or able to do on their own, but would want to in a group. The Point's original goal and the intention were supposed to be political and social—not about purchasing goods.

 

However, the site struggled, and founder Andrew Mason had to start generating revenue. He was inspired by a campaign that users had posted on The Point not to organize political action, but to get a large group together in order to receive group discounts on products. Taking this idea, Mason added a Groupon section to the side of The Point.

 

Although Groupon began as a side project to get The Point some revenue, it quickly attracted much more buzz and activity than the rest of the site. Within a few months, Mason knew that the right move was to listen to users and make his company focus on Groupon.

Brands can't always anticipate the myriad of potential uses a customer could have for your product. But, by looking at what groups of customers are actually doing, brands may come across a new idea that's just as successful as Groupon.

5. Pinterest: From retail to collections

Pinterest was born as Tote, a site allowing users to shop at different clothing retailers, and receive updates for sales and new items. However, users weren't making purchases—the payment technology was not sophisticated enough to make on-the-go payments easy. For an app focused on mobile shopping, having users who didn't make purchases was disastrous.

 

But when founders Ben Silbermann, Evan Sharp, and Paul Sciarra looked at their users' behavior, they found that people were spending much more time building up collections of their favorite items and sharing them, rather than searching for new items to actually purchase. So instead of giving up, they pivoted and created Pinterest as it is today—an app for cultivating collections.

 

Tote could've just been scrapped—subpar payment technology seems like a good enough reason. But instead of turning their back on their mistake, Silbermann, Sharp, and Sciarra used it as a learning opportunity. Even if your product fails, there'll be useful data from it that can help kickstart your next project.

6. National Car Rental: From bankruptcy to billions

In 1993, National Car Rental was hemorrhaging money. Its parent company, General Motors (GM), was threatening to liquidate the company unless it became profitable soon. So National turned to the only hope it had left—data. National invested $10 million to build a revenue management system that would track bookings, cancellations, forecasts, and more.

 

By analyzing customer demand, National was able to institute differential pricing based on the type of car, day of the week, and time between booking and rental. They were also able to divide their inventory of cars between locations in a way that maximized the number of cars they could rent to walk-ins. Because National was getting up-to-the-minute data, they could make many price changes and measure the impact on customer satisfaction and revenue.

 

This revenue management worked—National returned to profitability almost immediately and revenues improved by $56 million in just one year. When GM did sell National in 1995, it wasn't just for peanuts, but $1.2 billion (over $1.9 billion in today's dollars). Your customers are not all the same, so don't treat them that way. By segmenting customers as National Car Rental did, you can improve the service they get as well as your bottom line.

7. Chegg.com: From classifieds to textbooks

When Chegg.com launched in 2003, it served as a portal for college students to post classified ads for free. And it had a “less-than-spectacular” start.

 

Co-founder Aayush Phumbhra knew he needed to make a change, so he started to investigate patterns in user behavior. Phumbhra found that Chegg only had significant traffic at the start of each university semester and that most of the ads posted were about buying and selling textbooks. Recognizing an opportunity, he bought 2,000 textbooks from Amazon and began renting them out to Chegg visitors.

 

Once it was clear that this experiment was a success, Phumbhra made textbooks rentals the focus of Chegg. The site took off and is still growing today, providing scholarship connections and tutoring services, in addition to renting over a million textbooks a year.

 

Your company doesn't need to do everything it set out to do. By focusing on your best use case, like textbook sales for Chegg, you can become a top contender for that market.

8. Flickr: From gaming to photo sharing

Whimsical online role-playing—sound like Flickr?

 

Probably not, but that's where the photo-sharing startup began. Founders (and newlyweds) Caterina Fake and Stewart Butterfield (also now of Slack fame) started off by developing the virtual world Game Neverending in 2002, in which players traveled around, built objects, and interacted with other players. In order to expand on instant messaging between players, a vital part of the game, they decided to add photo-sharing capability in 2004.

 

Instead of being a small feature that attracted players to remain using the site, the photo-sharing tool soon became more popular than the game itself. When Fake and Butterfield looked at their user behavior and discovered this trend, they made the choice to put the game aside and focus on what people really wanted—the photo application.

 

Thus arose Flickr, which attracted millions of users and was bought by Yahoo! in 2005—netting the previously deep in debt duo $40 million.

Analyzing the effect of every feature you add to your product helps you find new opportunities. Don't simply measure the number of new users—look at whether that feature is drawing people to your whole product, or just to that add-on.

9. Twitter: From text to hashtags

Most of the major features we associate with Twitter were actually invented by users. That's right: @-replies, hashtags, and retweets all came from the minds of people outside of Twitter.

 

After an individual named Robert Anderson's first @-reply tweet, @-replies quickly became popular and Twitter made them an official feature in May 2007. The popularity of @-reply also influenced the overall direction of Twitter—pushing the company towards cultivating a conversation platform instead of just a place for status updates. Twitter looked at what their users were doing, and added that functionality into their product.

 

A similar story holds for hashtags and retweets: while Twitter initially dismissed these features, they changed their minds as the new concepts soared in popularity. Co-founder and ex-CEO Evan Williams says, “Most companies or services on the Web start with wrong assumptions about what they are and what they’re for. Twitter struck an interesting balance of flexibility and malleability that allowed users to invent uses for it that weren’t anticipated.”

 

Remember, your company doesn't decide what they want—your users do.

10. Avon: From books to cosmetics

The name Avon is synonymous with cosmetics—but the company didn't start out that way.

 

Avon founder David H. McConnell began as a door-to-door book salesman in the 1880s. A common marketing tool used by salesmen was to offer a free gift to a potential customer if they agreed to listen to the sales pitch. Since McConnell was mostly dealing with housewives, he decided on perfume, and teamed up with a local pharmacy to create a fragrance to give away in small vials while attempting to sell some merchandise.

 

Ever the savvy businessman, however, McConnell dove right into this new business opportunity. In 1886 he launched the successful California Perfume Company (later renamed Avon). It was this same drive to give his customers what they wanted which led him to hire female salespeople at a time when opportunities for women to make a living were few and far between—because he believed they would be best at marketing to his customers.

 

Even before big data, looking at user behavior was essential to adjusting your product—the strategy hasn't changed, only our tools have.

Pivot your product with Scuba Analytics

Your brand's user behavior is the best source of information about what they want. By exploring it, and keeping your product flexible, your product can become the best in your market. User behavior and analytics can help you do that. Continuous intelligence platforms, like Scuba, provide brands with real-time analytics that can provide faster, granular, and new insights.

 

Explore our demo today or schedule a call with a Scuba expert

Stay Updated

Stay in touch with Scuba with fresh insights delivered to your inbox.

Ready to Dive In?

We'd love to connect.

Talk to an Expert