Customer analytics is the study of customer behaviour, such as buying habits and experiences. When effectively analysed, this data can be used to guide key business decisions.
When it comes to analysing your customer data, you can gather this data from a number of your existing channels, such as your CRM system, email databases, and social media channels. The techniques involved in conducting the analysis include for example predictive modelling and segmentation. Using the insights from this process, you can inform decisions about future marketing campaigns, pricing plans, promotions, and loyalty initiatives.
Essentially, customer analytics provides you with a number of key insights. It can be used to tell you:
- Who your customers are
- What they’re doing
- What they want
- How you can reach them
- Where you can reach them
Using this information, you can then create personalised customer experiences on an individual level. These new campaigns will then help you win new customers and increase the loyalty of your current customers.
Customer analytics software makes the process of capturing and analysing your customer data far quicker and more comprehensive. Using the insights provided by the customer analytics software, marketers can then power the sales, marketing, and product development efforts of their business, boosting profitability and improving their return on investment.
Overall, customer analytics software performs three main tasks:
- Helps identify the target customer
- Helps you understand the needs of current customers
- Expresses how the products or services provided by your business meet the needs of the customer
By using powerful software, you can decode huge datasets and break big problems into manageable answers. Plus, with the help of customer analysis software, you’ll find it easier to make better decisions on pricing, promotion, and management. Thankfully, the software can also prevent you from conducting this type of analysis manually, saving you time.
With the vast majority of customers now expecting a seamless experience and near-instant responses, customer analytics software is vital for helping businesses measure and improve their products and marketing efforts to ensure they cater for the needs of the modern customer.
Thankfully, by using customer analytics software, you’ll experience a range of benefits. The software will help you:
- Target customers with relevant and timely offers across all your channels
- Segment your customers and address individual customers based on their behaviour
- Maximise the lifetime value of a customer through up-sell and cross-sell offers
- Track how your customers move along different segments over time
- Predict the future behaviour of your customers
- Understand your customers on an individual level
- Predict which customers you’re likely to lose and help you take actions that will help retain them
Customer analytics tools
Within a business, data is usually consolidated in a large database like a customer data platform (CDP). Once this data has been consolidated, appropriate customer analytics tools can be used to analyse this data in detail. Once the analysis is complete, you can use your findings to improve the overall customer experience.
Your customer analytics software will sit on top of your CDP and will enable the captured data to be effectively analysed. By conducting this analysis, you will generate new findings that will allow you to target specific groups for your upcoming campaigns.
When you effectively utilise customer analytics tools, all activities can be assigned to a customer on an individual basis. By taking a personalised view, customer communications can then be actively shaped to suit an individual customer and can be optimised over the long term. In this regard, customer analytics is separate to web analytics, which is only used on an anonymous basis.
Customer analytics tools are vital for maximising the effectiveness of your marketing activities. Due to the fact that many businesses spend the majority of their marketing budget acquiring new customers, it’s common for these businesses to not communicate effectively with their current customers. However, customer engagement isn’t a process that should be overlooked. After all, acquiring a new customer often requires a far greater workload and a higher level of spend than encouraging greater brand loyalty and repeat purchases from existing customers.
In addition to this, existing customers provide a number of key benefits for businesses. This is because they buy more frequently than new customers, buy higher value products, and are less price sensitive (which makes planning easier). On top of this, loyal customers also play the role of brand advocates because they recommend your product to others.
As a result, optimising your communications with existing customers is a vital step in improving the effectiveness of your marketing campaigns. By using customer analytics tools for this process, you can see a substantial improvement in key figures such as profit, turnover, growth, and return on investment.
Using an analysis tool like Apteco FastStats®, you’ll be able to quickly and easily generate new insights and use those to power high-performing campaigns. With a powerful piece of analysis software like Apteco FastStats®, you can:
- Segment all of your customer data, recognise common traits, and improve engagement
- Identify patterns in transactional data, perform a profile analysis, or conduct predictive modelling
- Identify new business opportunities, such as customers you’re not reaching effectively or geographic regions you’re yet to explore
- Predict the next purchase of your customers and use advanced modelling techniques to calculate the best next products to tempt customers
- Have complete control over creating audiences for your campaigns
By effectively utilising the data your company has and using customer analytics tools to correctly interpret and leverage this data, your campaigns will stand the best possible chance of providing the highest possible return on investment.
Customer analytics insights
When using customer analytics software correctly, your company will receive full visibility into how current customers and prospective customers engage with your business and use your products.
You can use the software to expose macro trends on how customers find your business and buy your products, or you can explore at a micro level and learn more about who your customers are as individuals. Using customer analytics insights, you can segment your users by demographics, interests, and behaviours. Using this knowledge, you can then calculate how your business can better cater to each persona and make data-driven changes to the way your business operates.
However, although it’s primarily a marketing tool, customer analytics insights are relevant for a number of different teams within a business. So, although the marketing department can use the insights generated to gain a greater understanding of their audience, the sales team can also use the data to score leads, prospects, and users. Similarly, teams working on product development can use the data gathered to discover more about the features, product usage, and customer journeys.
Essentially, if your business is measuring or tracking a metric, then a customer analytics platform can help you answer any key strategic question you have. This includes questions surrounding:
- Which channels drive the highest volume of new customers?
- What is the most common customer journey?
- How many new customers were acquired?
- Which revenue channels are most profitable?
- Which revenue channels are least profitable?
- Which customers are the most profitable?
- How often and when do customers buy?
- What’s the average customer lifetime value?
- How many customers have a high, medium or low customer lifetime value?
- Which customers are most at risk of lapsing?
- Why do customers lapse?
- What behaviours correlate with high retention rates?
- How many customers were lost?
- What features resonate with which customers?
- Where are customers experiencing problems?
These insights will help improve your understanding of the characteristics of your customers and their needs. In turn, this will improve your knowledge about the strengths and weaknesses of your business in the market. As a result, by conducting a detailed analysis using customer analytics software, you’ll be able to accurately analyse your current customer base and discover new possibilities. This could include ways you can boost retention, ways you can drive upsells, or possibilities for expansion into new markets.
However, crucially, in order for your customer analytics insights to be accurate, you need to collect lots of data. As a result, as well as passively collecting data through your company’s website, you may also choose to run surveys or conduct user research. All of this data can then be added to a central repository. If you fail to properly maintain your data, you may receive misleading results from your customer analysis software. Due to this, you should always ensure that your customer data remains structured, updated, and complete. If you do this and invest in customer analytics, you’ll gain a competitive advantage over your competitors, because you’ll be able to easily understand your customers and cater to their needs, boosting sales and retention rates.
Best next offer is a marketing analysis method that allows you to predict your customer's next purchase. Our free eGuide explains how customer analytics software helps you to recognise your customers' needs before they arise. Click here to download.