Customer analytics is considered to be the bread and butter of any successful business plan. In simple terms, it’s the process of acquiring data, processing it and adapting your business model according to it, in order to suit the needs of your consumers.
The truth of the matter is that you can have the most brilliant product on the market, if the marketing isn’t done right, there is a high probability of that product never seeing many customers in its lifetime.
In today’s article, we take a look at customer analytics – what they are & why they matter. And although you could get a lot more benefits from a customer analytics tool (about which we’ll also talk about at the end), we’ll also throw in a simple guide to customer data analytics.
Importance of customer analytics
As we’ve mentioned above, customer analytics is one of the key pillars of any business plan. But why is that?
Well, imagine you have the most amazing smartphone ever invented in your possession – and you’re ready to sell millions of it internationally. However, because you haven’t done any proper research, you choose to market it to women, living in the rural area of Eastern Europe, over the age of 65. How do you think your product is going to do in such a market?
Another example – you have an extraordinary service that helps teens better study for their final exams. Obviously, you know you have to market to people in that age range, but you decide to use memes from 2012 to market your service. Let us tell you – you might become viral for bad advertising, but you’re not going to sell too many subscriptions for your service.
So, seeing just these two examples, we can gather that a thorough customer analysis can make or break your products or services.
And now, as promised, let’s look at some easy steps that you can take right now to undergo your own customer data analysis.
A basic plan for customer analysis – how to conduct customer data analytics
- Make use of what you already have
Although a thorough market analysis is desirable, it’s possible to have (some of) the data you need right under your nose – although it might be somewhat scattered.
Depending on the age of your firm, you probably have files upon files of interactions with consumers – from online purchases to customer service interactions and survey responses. Make sure you gather all that precious information into one place and start sorting it out. The process is called data integration. You can read more about it, here.
The action of sorting is called market segmentation, and it helps you better understand your wide audience, by dividing it into smaller, more manageable chunks.
You can read a comprehensive guide to market segmentation here.
However, remember that besides the classics (demographic, geographic, psychographic, etc.), you can always use segments that are fitted to your particular business model.
- Identify your biggest fans
Ever since the beginning of the 20th century (the year was 1906, more precisely), Pareto figured out something amazing – 20% of the pea pods in his garden were responsible for 80% of the peas. Or, in more modern terms, 20% of your customers will be responsible for 80% of your business.
Therefore, it makes a ton of sense to focus firstly on your “biggest fans” – also known as the people that are the most valuable to your business. You can identify them by several metrics, but here are a few we already talked about, so give check them out:
- RFM Segmentation
- CLV – customer lifetime value
- RCR – repeat customer rate
- CRR – customer retention rate
III. Have a chat with your audience
The best way to understand your customers’ behaviors is quite straightforward – you need to observe & talk to them. These can be done through several mediums, so we’ll just list some of the most common ones below:
Customer reviews are a great way to have a look at some honest customers’ experiences. This is particularly applicable when the experience was a rather negative one – people tend to be more detailed when complaining about something bad happening.
Even though customer reviews can be painful and sometimes exaggerated, they are still a free, easy-to-access and valuable way to better understand your audience and their expectations from you.
Nevertheless, you should always be on the lookout for reviews, since they are a big part of the reason your business is booming (or not). Read more about it, here.
When it comes to business analytics, customer surveys are your breakfast, lunch and dinner. They are one key pillar in the great field of marketing research and the best part – they are usually inexpensive and easy to do.
Of course, if you want a professional market survey you’ll need to invest a bit more money. But for standard, easy-to-answer and straightforward questions, use an online customer survey and send it to your client.
Hint: a nice discount will incentivize them to answer you more promptly.
There are endless benefits from customer interaction, and customer interviews are no different. They serve two major advantages over other forms of data collection:
- They give the client the opportunity to express their feelings in a more natural way, without the constraints of a survey;
- They give the client the sentiment that they matter. That their complaints are being heard. Which will ultimately be a benefit for your brand.
So, if your budget and schedule allow it, make sure you conduct some thorough, meaningful customer interviews – you’ll be very happy with seeing just how much insights about customers’ experience you can get by interacting directly with those who use your products and services.
IV. Create buyer personas
We won’t get too much into it here, since we’ve already written about it a bunch in the past. You can find our previous blog posts on the matter here.
In short, a buyer persona is the way in which you compile all the information you’ve gathered into effective, tangible tools that will help you market your brand a lot better. It’s a character you develop with the information you have – a character (or, several, most likely), that helps you see who you’re selling to.
Because understanding your audience isn’t about just knowing how they interact with your brand at a particular time. It’s about their entire lifestyle, and how your brand fits into their lifestyle perfectly and naturally.
V. Map out your customer’s journey
Customer journey is another one of those subjects that you have to be into if you want to create successful marketing campaigns. Of course, we’ve already talked about it a bunch, you can read about it, here.
As a short reminder, customer journey is the process through which you determine what steps your customer is going to go through – and then market the right information, at the right time, for each specific step.
The newsletters you send to a new client are (or should be, at least) way different to those you send to clients you’ve sold to for years. When it comes to products and services (especially the more pricy ones), people need time to get acquainted and build trust – just like any other relationship. The customer journey map helps you achieve just that: build a long-lasting relationship to your audience and increase sales in the process.
This technique is crucial if you also want to boost retention rates, sell better and take your profits to the next level.
VI. Make use of machine learning technology
Digital marketing is a lot easier when you have the convenience of technology by your side – and it is especially applicable when it comes to state of the art technology.
Predictive analytics, journey mapping and customers’ behaviors are easier to understand, use and implement with the help of AI.
It may not be accessible to everyone, but if your budget allows it, make sure you take advantage of machine learning technology!
Reveal – your all in one customer analytics tool
As you can see, customer analytics is pretty straightforward – but not as simple as it may seem at a first glance. Data mining, customer analysis, buyer personas, data management and everything else – they take time, experience and patience to achieve. Not to mention the endless testing that needs to be done in order to see if it works properly.
Reveal is the one-stop-shop tool that does that for you. We collect, analyze and use your data in the most effective way for your business. Predictive analytics, higher retention rates and, ultimately, more money in your bank account – that’s how we can help.
Let’s have a chat about how Reveal is the next logical move for your business.
Customer analytics is a key pillar of a successful business plan – and we’re sure today’s article proved that to you. When it comes to any business, data is the most important asset you can have – but it’s important to also know how and when to use it.
Remember that creativity, innovation and a fat bank account are great for a business, but the real results can be seen in the hard data, gained by thorough market research.