In the digital age, many companies use customer touch points to collect information without capitalizing on its full potential. In an article for Harvard Business Review, Bala Iyer and Mohan Subramaniam discussed how companies can use APIs to harness this information and gain a competitive advantage.
By using the collected data only internally, many firms are missing out on complimentary services that third-parties might build on top of that data. In recent years, APIs are changing this trend by opening new avenues for growth through four key approaches:
- Using customer interactions to build a comprehensive repository of user information, which can cover things like location data, social habits or spending patterns
- These rich repositories can then be used to predict future behaviour based on historic patterns, telling companies which areas to focus their efforts on at what times. This data can also be used to attract advertisers targeting a specific demographic
- By creating an engaging UI as the front end of your API, companies can increase user retention. The more users an application has, the more new users it attracts. These exponential interactions accumulate huge amounts of data which are informational assets
- Recognising growth opportunities and exploring new revenue channels through API implementation in related areas can offer massive expansion. A travel accommodation Platform, for example, can partner with museums, theatres and theme parks to grow their ecosystem of services.
The important thing for companies to remember is privacy for their users. With more firms becoming data repositories built on the back of a service, permission must be given by the user, or only aggregate information provided, before third parties gain access to the data.