Business Tips | 6 MIN READ
What Is Customer Analytics, Why It Matters, and How It Works
Customer analytics is a useful process towards understanding customers so that companies can make informed business decisions.
Business Tips | 6 MIN READ
Customer analytics is a useful process towards understanding customers so that companies can make informed business decisions.
If you want to thrive in this competitive SaaS world, then the importance of understanding customer behavior can hardly be overemphasized. Customers are getting more empowered in today’s marketplace. Companies are investing heavily on understanding their likes and dislikes so that they can make informed business decisions. Hence, customer analytics is a useful process towards that end.
Customer analytics is the process of capturing and leveraging customer data analysis to identify, attract and retain customers. These customer data can be collected from various sources through which a customer interacts with the brand. An intelligent software gathers all these data and converts them into useful insights that business can use to create better strategies.
Companies use these valuable insights in their sales, marketing and product development efforts. Through this, they are able to offer more relevant experience to their customers in all of their interactions. A personalized experience is what makes a customer stick to a brand and eventually become a loyal customer.
There are many cases when a company needs to use customer behavior analytics properly. It helps them in processes like pricing, promotion and management. Without the understanding of customer behavior, their strategies would be far from being effective.
Using customer data gathered from all communication channels, companies use predictive analytics to anticipate customer behavior. A 360-degree customer view helps companies gain a holistic view of the customer. It helps them in creating strategies for customer acquisition, customer retention as well as proactive engagement with the customers. This is how it works:
When it comes to putting customer analytics into work, there are three steps that you need to look into. These are:
There are multiple touchpoints that a customer makes with your brand. Data collection is the process where you gather data from all the channels of customer interaction. These channels include:
All the data you collect has to go through proper validation. Without validation, all your efforts towards customer analytics can go waste. Hence, a proper validation mechanism has to be designed to ensure the accuracy of your data. Few pointers for validation are:
Before you begin consumer analytics through data, you must have your customer personas in place. By cross-validating the gathered data with customer use cases, you can create a predictive model for your business. This helps in identifying customer’s choices that have a direct impact on your business. These choices may be something like, how customers discover your product, which features they like most, what value means to them, and why they leave.
Apart from the above business-related data, you can also analyze the customer’s personal information like their job profile, their age, sex, marital status, location, etc. After gathering all this data, you would have to use data mining through technologies like AI, Machine learning, to identify the underlying patterns within such a huge amount of data.
There are many tools like Google Cloud ML Engine or BigML, that can help you create a predictive model. These tools help you create models through which you can forecast your business outcomes and improvise in advance as needed.
Customer interactions can become way more effective when companies start leveraging customer analytics. Few of the best practices that you may include in these lines are:
Whether you want to run a targeted marketing campaign, increase ROI on your customer acquisition cost, or to leverage brand loyalty, customer analytics can help you fulfill all of it. You must have heard about the importance of right product-market fit while launching a product. But equally important is the match between customer and brand too.
Through customer journey analytics, you can not only offer them relevant experience but also turn them into your loyal customers. And that is the only way towards long-term sustainability of your business.
Originally Published December 18th, 2020, Updated December 22nd, 2020
Shoeb has over 12 years of experience in architecting and developing software applications and creating digital marketing content. He has worked with globally competitive CMMI Level 5 European organizations in the BFSI domain. He has also worked with SaaS-based organizations in developing the marketing content that has helped them win multi-million dollar deals.
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