Posted by Knowledge is power. If you know your customers, you’re in the best position to be able to serve their needs. As a business, you probably collect a lot of customer data. It can be put to good use. You can analyze it and devise new ways of achieving your business goals.
Read on to learn about customer analytics and how you can use it to boost your business
Defining customer analytics
Customer analytics is the process of collecting and studying customer data. It can help you form strategies to improve customer engagement and satisfaction.
You can gather information from a variety of sources. Every touchpoint is an opportunity to learn more about your customers. A touchpoint is any way a customer interacts with your business. This includes visiting websites, signing up for newsletters, or interacting with social media.
Customer analytics involves the use of various tools and techniques to gather and process data effectively. Data is collected and processed using techniques such as ETL (extract transform load), data mining, and AI (Artificial Intelligence).
Once gathered, you must then analyze the customer data using tools such as Customer Relationship Management (CRM) systems, analytics solutions, business intelligence (BI) software, and sentiment analysis tools. You’ll gain insights into who your customers are, how they behave, and what they want.
Why customer analytics are important
Intuition and “gut feelings” can only take you so far — data-driven decision-making results in better-informed business strategies. Customer analytics can provide that valuable data. It represents a more scientific approach to decision-making.
Creating a customer analytics process is key to success. It’ll help you conduct efficient data gathering and analysis. You’ll only gather the data you need to uncover those useful insights.
The benefits of customer analytics
How do the insights gained from customer analytics help your business?
- Boost engagement: Learn what customers respond to in marketing. Use what you learn to craft social media content that drives more engagement.
- Personalize the customer journey: Use data insights to anticipate customer needs and preferences.
- Increase customer lifetime value (CLV): Discover how to improve customer loyalty. Find out what can keep customers coming back for more.
- Promote business growth: Gain a better understanding of existing customers. This allows you to target marketing efforts more effectively. For example, you can acquire additional customers through social prospecting.
7 steps to create a customer analytics process
Let’s now examine the steps to creating an effective customer analytics process.
1. Determine your goals
It’s important to work out what exactly you’re trying to achieve. This is the first step because it’ll inform your approach to the rest of the process. Your ultimate goal, of course, will be to maximize profits. You need to determine whether customer analytics will contribute to achieving that goal.
The following examples are possible things with which customer analytics can assist you.
- Boost social media engagement
- Improve customer acquisition
- Increase CLV
- Generate more leads
- Increase customer retention and reduce churn
- Get more sales
Concentrate your efforts on as many goals as you wish. Keep in mind that a more focused approach may be easier to achieve.
2. Decide upon the right key performance indicators (KPIs)
Once you decide your objectives, you’ll need to find a way to monitor your progress. Choosing the right metrics, or KPIs, is vital. They need to be quantifiable and accessible.
Let’s look at a couple of examples. If your main focus is to generate more sales, then that’s easy to access and monitor. Say you launch a new campaign informed by customer analytics. Compare sales from before the launch versus after.
If you’re trying to boost social media engagement, you’ll need a different KPI. This is more complex. It can be difficult to decode the social media algorithms. The social media platforms do provide tools with which you can monitor likes and shares.
3. Use the right tools
You need to invest in methods for the collection, storage, and analysis of customer data. Additionally, you need a dashboard from which you can monitor your chosen KPIs. There are many solutions available depending on your unique needs.
Let’s look at storage, for instance. You need a solution that’s secure and accessible. You could store data on-site, but that can become expensive. It depends on the volume of information you gather. Alternatively, you could use cloud storage. There are many data lake examples to explore that you can use to store data in the cloud.
Take some time to research which tools serve your needs best. This will depend upon your type of organization and the goals you’re trying to achieve
4. Establish safe data handling protocols
When dealing with customer data, there are cyber security concerns. You have a legal responsibility to look after the data you use. If you fall victim to a data breach and your protocols are found wanting, you could face repercussions. These include but are not limited to, fines and reputational damage.
Use trusted solutions for the storage and collection of data. Only collect the data you need to create an effective customer analytics process. Implement access controls to only allow those who need access to further your goals. Be wary of third-party applications that want to access the data.
5. Ensure data quality
It’s advisable to put a data maintenance process in place. It’ll help with data safety and keep data in a usable state for customer analytics. If you’ve chosen your tools well, then they should be taking care of the bulk of this. Nonetheless, there are some best practices you can employ to ensure data quality.
- Regularly backup data
- Delete old data that’s no longer of any use
- Validate data to ensure accuracy
- Store data in a standard format
- Remove duplicate data
- Organize data into categories (e.g., demographics, behaviors)
Keep on top of this, and you’ll maintain an effective customer analytics process.
6. Find patterns
The purpose of the analysis is to seek out patterns. You’re trying to find a causal relationship between the data and what’s happening with your KPIs. This is so you can tell a story of how your activity is impacting your customers. With this information, you can find new ways to do things that help you achieve your stated goals.
Upon completing your analysis, speak to your teams. You need to show them your conclusions to begin the process of creating new strategies.
Create a presentation, a report, or hold a meeting. Perhaps you operate a remote or hybrid workplace. Hold a conference call using one of the many VoIP small business phone systems that are available. The point is to get your teams exploring how to use the outcomes of your customer analytics process.
7. Devise and test your new strategies
Once you’ve met with your teams to discuss the customer analytics, it’s time for action. Look again at your goals and brainstorm some ideas based on the analysis.
You and your team may come up with many great ideas. Try to whittle it down to two actions and try them out. You could implement A/B split testing. This is incredibly useful in social media content marketing or email campaigns. You try out two slightly different messages and see which one gets the most engagement. You’ll then be able to deploy that on a wider scale.
Boost your understanding with customer analytics
Create a robust process, and you’ll be able to use it again and again. As your business grows, your goals will change. You can apply your customer analytics process to a variety of goals. Always remember to take care of the data so it can take care of you. Learn lessons from the analysis to devise strategies to boost your business.