Importance of Customer Analytics for Businesses
As organizations expand, it is logical that their consumer base also grows. Even though monitoring the activities of the customers is hectic and precarious, knowing the patterns in the customers’ behaviors offers the necessary direction for decision-makers to plan their robust business strategy.
Going through this humongous database of customers manually is not possible in the current scenario, and this is where Customer Analytics comes into the picture. Customer Analytics refers to a systematic study by which the data gathered from the customer base and behavior is used to identify, attract, and retain customers. It forms the cornerstone of business marketing strategies and critical decisions by integrating advanced techniques like data visualization, predictive modeling, Information management, and market segmentation.
What is Customer Analytics?
Customer analytics is leveraging and capturing customer data analysis to attract, identify, and retain customers. These customer data can be collated from numerous sources through which a customer interacts with the brand. Intelligent software gathers all these data and converts them into valuable insights that businesses can use to create better strategies.
Companies use these valuable insights in their sales, marketing, and product development efforts. Through this, they can offer their customers more relevant experiences in all their interactions. A personalized experience is what makes a customer stick to a brand and eventually become a loyal customer.
Why is Customer Analytics significant?
There are numerous cases when an organization requires to utilize consumer behavior analytics properly. It assists them in processes like pricing, promotion, and management. Without an understanding of customer behavior, their strategies would be far from effective.
Utilizing customer data collated from all communication channels, organizations use predictive analytics to anticipate consumer behavior. A 360-degree customer view assists companies gain a holistic view of the customer. It allows them to create strategies for customer acquisition, customer retention, and proactive engagement with the customers. This is how it works:
Customer acquisition: By exploring customer behavior, you can design effective sales and marketing strategies that fit the right consumer. By targeting the correct audience, your marketing cost can be decreased considerably. Curating personalized marketing campaigns would also help in increasing the conversion ratio.
Customer retention: You can develop predictive customer analytics by studying the customer behavior of those who got churned. The proper strategies can be formed to engage proactively and effectively with at-risk customers to prevent further churn.
Customer engagement: When we talk about effective engagement with consumers, a personalized experience is a must. Customers allow it when they get bespoke solutions for their needs. By studying their support queries, niche and challenges, you can engage with them more reasonably. Consumer engagement analytics assist a great deal in product adoption and nurturing customer relationships.
Factors to assure that you derive optimal benefits from Customer Analytics
Every enterprise should reinforce a few aspects to achieve the power of customer analytics fully:
1. Leverage Operational Excellence
As per the McKinsey study, over 85% of businesses stated that only when they started using customer analytics extensively that they begin seeing a vital boost in value contribution from customer analytics, as compared to 20% and 30% of organization where the usage of customer analytics was relatively less and moderate, which establishes the fact that enterprises can only take the benefit of customer analytics when their operations achieve a certain level of excellence. Hence, the decision-makers of a business must understand the customer analytics tools they require to invest in to bridging the gap between their current customer analytics infrastructure and the advanced analytics frameworks that the industrial tycoons are using.
2. Adopting an integrated approach
IT and predictive analytics alone are not that enough to take customer analytics to the upper level, even though they’re significant to consumer analytics. The core success lies in taking an integrated approach to consumer analytics which involves guidance from the leadership and emphasizes fact-based decision-making. An organizational framework can only action insights offered by customer analytics with a logical and rational culture. Such an organization would first focus on the easy integration of all the standards needed for customer analytics, including IT, analytics, and the organization-wide framework, instead of quickly actionizing the insights.
3. Involve Senior Management
According to McKinsey’s report, almost 69% of the businesses where the senior management was actively involved in customer analytics reported having attained great value from customer analytics compared to only 28% of the companies where the senior management isn’t concerned with customer analytics of having obtained significant value contribution through Customer analytics. Given that all the crucial decisions concerned the marketing and sales strategies, service/product improvement campaigns, strategies, and more. If a business is taken by the leading management, it is intelligent to get them involved in reviewing the consumers’ side of things thereby helping them understand better what the Customers are looking for and make appropriate decisions.
Therefore, the more you understand your customers, the better you’ll be able to predict and meet their needs, and increased sales will naturally follow. Setting up accurate reporting is a big step in understanding your customers.
Talk to our experts if you want to learn more about how we at Polestar Solutions can help get your customer data analytics effort off to a running start.