Today, customers are more hooked up to the Internet than ever. They are always active on social media, online shopping portals, online platforms with informative content, and so on. As a result, consumers are now always updated about the latest trends in the market, be it regarding technology, products, and services, fashion, or education – they know it all. This has made it all the more important for business firms and organizations to gather an all-comprehensive knowledge about their customer base, their likes and dislikes, and their tastes and preferences.
In the cut-throat competitive business world, if you fail to ‘learn’ about your customers’ behavior and preference, you might fall behind in the race. If customers see that you’re failing to understand their ‘pain points,’ they know they have other options to look up to. Thus, to retain a loyal customer base, you need to invest in Customer Analytics.
What is Customer Analytics?
Customer Analytics essentially refers to the techniques that are employed by business organizations to extract extensive information about their customer base while also keeping a close watch on customer behavior. It allows companies to identify potential customers and devise strategies to attract new customers as well as retain the old ones.
Customer analytics comprises the backbone of a business’ marketing strategies and integrates advanced techniques like data visualization, predictive modeling, information management and segmentation.
Why Customer Analytics Matters?
There’s an impeccable and straightforward logic behind investing in customer analytics – the better you understand and know your customers (their buying habits, their preferred choices, and the offers that they respond to), the more accurately will you be able to draw predictions regarding their future buying behavior patterns.
According to a McKinsey & Company survey, businesses that heavily invest in customer analytics are more likely to outperform their competitors, be it on the grounds of sales, or revenue, or ROI.
Every single interaction with your customers is sure to leave a trail of data (information) which when combined helps paint a clearer picture of what your customers expect from you. If utilized wisely, customer analytics can be one of the greatest strengths of your business – it will allow you to transform data (social media posts, comments, and mentions; customer interactions with your channels and media pages; customer behavior to your products/services, etc.) into resourceful insights that can scale up your profits considerably.
Customer analytics can help you –
- Reduce attrition rates significantly be accurately forecasting about the time periods when customers are most likely to leave, thereby allowing you to chalk out proactive plans and campaigns to retain them.
- Boost the response rates, customer loyalty, and your ROI by allowing you to target the right audience with attractive and befitting offers.
- Reduce campaign costs by streamlining campaigns to target only the customer base that is most likely to respond.
- Optimize the overall customer experience by creating personalized selling and marketing strategies for the different customer segments.
- Identify the current trends in Big Data to boost sales.
Factors That Ensure You Reap Optimal Benefits From Customer Analytics
McKinsey & Company maintains that every company should strengthen three aspects to harness the potential of customer analytics fully. They are:
Do Not Get Stuck Up On Mediocrity. Aim For Excellence.
Over 85% businesses state that only when they start using customer analytics (IT and predictive analytics) extensively that they begin to see an impressive and notable boost in value contribution from customer analytics, as compared to 20% and 30% of companies where the utilization of customer analytics is relatively low and moderate respectively. These figures establish the fact that businesses can only reap the benefit of customer analytics when their operations achieve a level of excellence.
Thus, it is essential for an organization’s managerial wing to understand what customer analytics tools they need to invest in to bridge the gap between their current customer analytics infrastructure and state-of-the-art customer analytics frameworks that are being used by the magnates in the industry.
Encourage Fact-Driven Decision Making
Although IT and predictive analytics are pivotal to customer analytics, these alone aren’t enough to pull customer analytics to the optimum level. The key to success lies in taking a holistic approach to customer analytics. The guidance of a leader who stresses on fact-based decision making is also crucial to customer analytics. Insights offered by customer analytics can only be translated into real and actionable decisions by an organizational framework having a logical and rational culture at its core. For instance, instead of focusing on the speed at which the insights are being put into action, you should first focus on the smooth integration of all the tenets required for customer analytics including IT, analytics, and the organizational framework.
Encourage The Involvement Of Senior Management In Customer Analytics
According to McKinsey & Company’s report, businesses where the senior management isn’t involved with customer analytics of the organization display as low as 28% value contribution through customer analytics. Contrary to this, almost 69% of the companies where the senior management is actively involved in customer analytics report of having attained great value from customer analytics.
Given the fact that all the vital decisions concerning a company’s sales and marketing strategies, product/service improvement strategies, campaigns, and so on, are taken by the top management wing, it is only wise to get them involved in reviewing the customers’ side of things. This way they’ll be able to understand better what the customers are looking for and make decisions accordingly.
Customer Analytics Tools
Customer analytics tools are applications that have been designed to help businesses gain useful insights into customer behavior and customize marketing campaigns and strategies to suit the specific needs and demands of the various customer segments. These tools can perform a host of tasks ranging from data sourcing to data analysis and visualization.
Here are five top-rated customer analytics tools:
- Adobe Analytics
- Google Analytics 360
- IBM Watson Customer Experience Analytics
- SAP Hybris Marketing Cloud
- SAS Customer Intelligence 360