What is Customer Analytics?
Simply put, customer analytics is the process and technology that organizes and interprets gathered data to reflect the demographics, actions, and habits of your customers. This data can provide unique, actionable insights that can transform the way you run your sales, marketing, and customer service departments. It can impact your entire business.
Customer analytics helps take the guesswork out of running a business. Of course, individuals are unpredictable. However, groups of people tend to follow trackable behavior patterns and trends. The data and conclusions you receive from customer analytics can help you capitalize on these trends to lower your costs and provide more meaningful, lucrative customer targeting.
What Data is Gathered?
Customer data covers everything a customer (or any site visitor) does while visiting your website. This data can tell you where customers are coming from—search engines, social media, etc. It can tell you how long people spend on different pages and the pathways they take through the site. It can tell you which pages customers leave without going on to make a purchase, or which pages a person visits before making a purchase.
It can track the comments made, shopping patterns, time spent online, site visitor demographics, etc. This data can tell you almost anything you need to know about the online habits of your current and potential customers.
How Can Customer Analytics Improve Your Business?
Of course, all of this data isn’t worth much if you don’t have a way to turn it into meaningful, actionable insights. The data you can gather is more than a pile of fun facts to throw at your marketing department; it represents the voice of the customer and how they interact with your business.
To interpret that voice, the technology behind customer analytics combs through all the aggregate data and provides you with the digestible information you can use to increase sales, reduce costs, and grow your business.
Identify Sales Crossroads
The information from customer analytics doesn’t make you psychic, but it provides real insights into the consumer experience that can convert into more sales. With this information, you can compare two important groups (as well as their many subgroups), site visitors who make a purchase and site visitors who don’t.
Of course, you can gain a lot of information from the demographics that can help you identify your most profitable markets, which is incredibly important. But don’t stop there. You can also gain useful insights from their behavior.
For example, let’s say your best-performing customer group is middle-class men ages 45-60. Looking at just this group, you can track the typical site paths a visitor might take and look for divergent points where some individuals go on to make a purchase and others do not. You can do the same with any demographic.
Wouldn’t it be nice to know where you lose potential customers? If customers frequently leave your site while visiting a specific page without making a purchase, it’s probably worth taking a look at the content on that page to adjust the customer experience strategy and increase sales or conversions.
Reduce Customer Acquisition Costs
How many dollars a year do you think you waste by either targeting the wrong demographics or ineffectively advertising to key customer groups when trying to acquire new customers? Even the best marketing team in the world can only do so much without accurate information.
Perhaps you’ve poured a lot of money into Facebook campaigns, but maybe your first-time visitors through search engines like Google convert into customers at a much higher rate. More specifically, maybe you have a better conversion rate for millennial women who visit your site via Instagram while Gen X women tend to convert better via Google or Pinterest.
When you have this detailed information and analysis, you can stop casting such a wide net in each of your channels and hone in on what works when it comes to acquiring new customers. This will lead to both reduced costs and increased sales.
Explore Untapped Opportunities
Are you fully taking advantage of all of your potential customer bases? Perhaps you’re doing well with women ages 18-25, but you haven’t quite hit the mark for women ages 35-50.
Customer analytics can show you where you’re succeeding and where you’re falling short. More than that, the analytics can tell you about current habits of these demographics. You can track which products or services tend to perform well with that audience and pass the information onto your marketing team so they are better able to accurately target that demographic.
Using a combination of site traffic patterns and online engagement, you may even find that with just a little tweaking, some of your product offerings could be significantly more attractive to different people. With this information, you could easily expand your customer base and sales.
Customer analytics is an essential part of customer experience management. The data is out there; take advantage of it. With the right tools, you can efficiently increase your sales while still driving down your costs.