Why It’s Beneficial To Understand Customer Analytics?

To say that every business needs customers in order to survive is an understatement.  Customers are at the core of every business. Enterprises exist because they’ve identified customer pain points and hope to address them profitably. 

But not all businesses actually reach their target markets for many reasons, including fierce competition in the industry. For a business organization to stand out, it must initiate effective approaches to study its place in the market, to find ways to connect with customers, and to analyze the impact of marketing campaigns, among other vital business components.

If you’ve ever found yourself wondering ‘What Is Customer Analytics? And How It Works’, you’re not alone. In this article, we’ll answer your questions and explain why customer analytics is beneficial to business organizations.

Customer Analytics 101

Customer analytics is defined as a set of processes and technologies – including software programs – that provide organizations with important data on customer insights in a timely manner. It is the cornerstone for marketing activities, and contributes to various critical business decisions. Customer analytics include several key components, including predictive modeling, data visualization, information management, and segmentation.      

This essential activity is a holistic approach typically undertaken by the business owner and departments such as sales, marketing, and information technology. Business analysts may be hired as external consultants or integrated as part of the internal business structure.    

The customer analytics team should work together to unify and analyze various customer-related inputs from tools such as:

• Customer Relationship Management (CRM) programs
• Customer service software
• Social media platforms 
• Customer analytics applications 

Without consolidated access to these platforms, it will be a challenge for the team to come up with a comprehensive consumer behavior analysis.    

Why is Customer Analytics Important? 

Customers have become more empowered in this day and age. For instance, they may be able to influence the decision-making process of other potential customers just by writing a positive or negative review about a product or service over the internet. 

Aside from uploading customer reviews, consumers can information that proves useful to businesses, such as what they like about a product or service, how often they buy specific products, and which items are they buying from a business and its competitors. Companies can get insights on consumers preference, lifestyle and buying habits, which in turn may be effective in predicting further behaviors. This allows businesses to customize their promotions and offers, leading to improved rates of conversion and retention.           

What are the Benefits of Customer Analytics?

When utilized properly, insights from customer analytics tools can help a company achieve improvements in the following business elements:

Marketing and Sales

• Effectively target consumers. Because you know the preferences of your potential and existing consumers, you can come up with a more targeted marketing campaign that increases your chances of making a sale.   
• Increase sales to existing customers. As you gain the trust of your customers, they will be inclined to prioritize your other offers, and can even help you attract new users via favorable online reviews and word-of-mouth.         
• Promote customer loyalty. When you know what makes your customers feel satisfied, you’ll find it easier to deliver the right products or services, allowing your business to build better customer relationships in the process. 
• Reduce marketing costs. When applied to consumers, predictive analytics can help businesses foresee future purchases of a customer, allowing for smarter marketing campaigns. Having a targeted marketing campaign also leads to a more effective strategy, minimizing costs spent for ads intended for general consumption. 
• Come up with methods to develop campaigns likely to increase conversion.  A custom-made digital marketing campaign can attract more buyers.  For instance, knowing which websites were visited by your target consumers allows you to place ads on that site. Learn from SEO experts and content marketers like Garit Boothe to increase your profits using digital marketing strategies.
• Minimize bounce rates for digital campaigns. Knowing your customers’ pain points arms you with the correct methods to customers towards your offers. Instead of a customer leaving even before you can reach them, drawing in the appropriate audience ensures that they’re truly interested in knowing more about what you can offer to them.   
• Reduce costs needed in market and survey research activities. You no longer need to launch tedious market research activities, as you can gather data on customer preferences and interactions online or have ready access to this information digitally. 
• Generate higher returns on marketing and promotional investments. Insights from various customer analytics programs increase the number of users clicking on your calls to action, allowing them to act favorably in response to your product or service offers.   
• Lower the costs of attracting new customers. They say it takes about five times more costs to invite new customers than to keep existing ones. With customer analytics tools, you don’t need to guess what appeals to prospective customers, which dramatically reduces the costs of attracting them, and avoids the inefficiency of mistargeted marketing campaigns.
• Easier classification or segmenting of customers. Separating your customers or creating segments allows you better analyze them.  It allows businesses to customize products and services for more effective marketing strategies and an improved customer experience.  

Customer Service

• Improve overall customer service by responding in a more targeted manner. Drawing on all the information gathered from various customer analytics tools, business know how consumers feel about their products and services. This helps them to implement changes in the way they interact. This makes customers feel important and valued. Being proactive also helps avoid potential problems with new or existing clients. 

Product Development

• Creating buyer personas. Before any product or service can be created, teams will have to create buyer personas to ensure that the target buyers can find reason to believe that they need a product. The process involves identifying target buyers or end users, understanding their goals and pinpointing the main challenges in achieving them.   
• Enhance pricing strategies. Customers have different reasons and motivations for buying a certain product. While some customers consider a product’s price point to be a dealbreaker, other buyers are not as sensitive. Gathering information on how pricing impacts willingness to buy a product is useful when a business tries to establish pricing methods.    
• Develop better products and customize products or service features. Combining information from market research and customer analytics can help businesses to improve services and products to either increase market share in a certain segment or to develop a new product line that caters to an underserved customer category. 

Final Thoughts

There are several of reasons why companies must endeavor to understand their target audience. By utilizing customer analytics, businesses can gather and interpret information that helps them to find the right clients at the right time, market effectively to them, and ultimately create happy, long-term customers.

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