Customer behavior analysis is not a new concept in any business organizations. Many successful enterprises start with identifying their target customers so they can tailor-fit their programs and campaigns. Big Data and customer analytics software are essential in learning about the customer behavior. Data-driven decisions are now more possible because organizations have an individual-level of their customers. With the advent of technology, the customer’s journey can now be easily identified and learned. Customer behavior analytics can help marketers create targeted and tailor-fitted ads and offers, and ultimately understand the customer journey.
What is Customer Behavior Analytics?
Customer behavior analytics allows you to collect information on how your consumers interact with your products and services. Many traditional measures have been successful to analyze data associated with business, but as digital transformation prevails and more businesses venture online, it has also became increasingly important to look into their customers’ choices and behavior in every interaction and engagement across all channels, offline or online. Analyzing the potential lifetime value of individual customers is one of the more modern approaches in analyzing consumer data. This entails tracking a customer’s behaviors throughout their entire relationship with your business in order to create a more favorable and positive customer experience.
Importance of Customer Behavior Data
Personalization and customer experience were somehow significant factors to consider in the customer journey prior to today’s digital age. Back then, companies would only segment target audience using primarily demographic and firmographic traits such as age, gender, income, ethnicity, geographic location, among others. These are the typical information they would gather to identify their preferences in the services and products they offer. The primary focus of customer data in the past was on the who.
There is no arguing on the importance of understanding who are your customers. Today’s vital practices of developing customer personas and ideal customer profiles help organizations and companies understand their target customers and create an effective customer journey mapping. Nonetheless, today’s customer-centric world requires more than just knowing who your consumers are and creating their personas. It should also be inclined on what they do for you to fully grasp and understand their needs and preferences. The quantitative insights revealed through their behaviors can reflect a much more accurate picture of their customers’ needs and preferences, and the manner and timing of delivering it to them.
Building on the premise of how important customer behavior data are, it is also necessary to invest on a Customer Analytics Platform, so you can easily access insights into how customers interact with your business.
Advantages of Customer Behavior Analytics
Selecting the appropriate customer behavior analytics is critical to the type and nature of your business, however, you have a plethora of available platforms for your customer behavior analytics. It can be accessed in different formats including desktop applications, software, SaaS (cloud), and even as a part of a marketing suite. Below are some of the benefits in using customer behavior analytics for your business:
- Through this platform, organizations gain clearer insights into which customers bought what, when, and via which channels they purchased. Knowing this information about your customers give you competitive advantages because you are better equipped to make data-based and data-driven decisions.
- Customer behavior analytics also makes it possible for companies and organizations to predict customer behavior. It gives the latter an insight on how customers act and think in the future.
- Insights from the analytics helps companies improve several aspects of their operations including sales, marketing, inventory planning, production, fraud prevention, among others.
- Customer behavior analytics measure metrics and data sources essential to know about your customers. This includes but not limited to: demographic information (name, gender, age), interaction with email and advertising campaigns, campaigns that converted and brought them in, order information including purchased products and order dates, customer status (active, at risk, or lost), average order value, sales channel, reward or loyalty program information, among others.
Challenges of Using Customer Behavior Analytics
Every advantage and benefit come with their corresponding challenges. While customer behavior analytics proves to be a significant tool to propel the business further, some companies face challenges in the use of this platform.
- Companies face some hurdles when they use customer experience management solutions that do not utilize proper customer data sources, keep data in silos, do not provide drilled-down customer insights, and with no proper integration of disparate customer data types.
- Too much data also, lack of real-time customer data to accurately map out customer journeys, improper collection, and storage of massive amounts of data, and failure to implement the right technology and protect customer data are also some of the common challenges some companies face.
Despite the presented challenges, companies can still be able to implement a successful analytics program for their customers with the use of proper tools and platforms. Moreover, to be successful in the use of the customer behavior analytics platform, companies must first identify which platforms suit the nature of their business, and how user-friendly yet comprehensive and powerful their chosen platform/solution is.
How does Customer Behavior Analytics Works?
The digitization of business operations proves to be beneficial to the overall objective of companies and organizations. The use of analytics to define and track customer behavior can be carried out in several ways, from automated reporting tools to more traditional spreadsheets, and to services like Google Analytics and Meta Business Suite. However, most businesses and companies prefer more integrated and comprehensive tools and solutions that will give them a better picture and analysis of their customers’ interaction with the company. Modern analytics software is prevalent in the market and has changed the way companies gain insight to better propel their businesses. It has become more intuitive, targeted, and customizable to elevate companies to a higher-level performance.
When companies use analytics platform to monitor their consumer behavior, they are also promoting data-driven culture within their company through data literacy. Organizations who prioritize their data (and make actionable insights and decisions through these data) can make game-changing discoveries and take timely action. There are a lot of tools and analytics software available in the market, one of which is Qlik, an end-to-end, real-time data integration and analytics cloud platform that closes the gaps between data, insights, and actions. With Qlik, companies can effectively visualize their customer data and come up with actionable insights. Qlik’s Active Intelligence Platform is the only one on the market that allows for open-ended and curiosity-driven exploration, giving everyone the ability to make real discoveries that lead to real outcomes and transformative changes. However, whichever analytics platform you choose to track your customer behavior, you will want to focus on key main areas:
- Segmentation – More than looking solely at the demographics of the consumers, it is more essential to also look over the preferences and behavior of customers over time because it provides more accurate understanding of their past and future actions and activities.
- Customer Journey – An analytics platform gives you the power to map your customer journey, in contrast to individual analysis of a customer’s behavior at one specific point in time. It gives you a concrete and rich overview of a customer’s engagement with your brand over a certain period, it could span for weeks, months, and even years.
Ways to Drive Impact with Customer Behavior Analytics Platform
The utilization of modern analytics platforms allows your organization to leverage your raw data into an actionable insight, thus solve problems and speed up the decision-making process. In your business operations, some outcomes are critical to ensure that the business reaches its peak. Customer behavior analytics affects three essential goals of your company. These are the following:
- Customer Acquisition – The modern customer journey is not a straightforward journey, but it is a complex path that usually involves a lot of various touchpoints across multiple channels over an extended period that can normally span weeks, months, and even years. Modern analytics platform helps you understand this journey which also includes their behaviors and preferences. Organizations will be able to identify which campaigns and channels they usually engage and respond to, the products they prefer and purchase, the offers or products that encouraged them to purchase again, among other significant observations. Companies can gauge the effectiveness of their marketing initiatives, thus attracting more customers and keep the same high-valued customers engaged and happy in the long run through various initiatives like loyalty and rewards program and other unique promotions addressed to them.
- Customer Engagement – Analytics platform allows you to see how well your customers engage on your campaigns and other activities. You can analyze their buying patterns so you can tailor fit the campaigns for the specific group of target customers. Once you track and analyze their engagement pattern, you can recommend related products that they might be interested, upsell products to high spenders, and offer discounts to value shoppers. This also helps organizations understand customers’ seasonal buying patterns, their tendencies to repeat purchases, and their in-between purchases.
- Customer Retention – You have acquired customers and you were able to keep them enticed and engaged through your campaigns and offers. However, you still need to make sure that you retain your customers. It is important to have significant and accessible information that will help you retain your customers. Customer behavior analytics helps you identify and track patterns of churn and retention and counteract on it before they completely turn their backs away from your brand and company.
Why Invest on a Customer Behavior Analytics?
Amidst the extensive marketing and operation of your products and services, you’ll always look for a tool that will assist you in further leveraging your goals and objectives. So, why invest in customer behavior analytics? The answer is simple – it gives your business competitive advantage and allows you to be an industry leader. The market is getting more competitive in the present times and customers are presented with a lot of options. With so many offers to choose from, your potential customer might lose sight of you and prioritize other brands that cater more to their needs and requirements. You don’t want that, do you? With customer behavior analytics, you will not only be able to provide better experiences across the board, whether online or offline customer experience, but you will also be able to better boost your customer acquisition, lower costs, increase in customer’s loyalty, reduce customer churn, and higher conversion rates.
By understanding their behavior and preferences, the curation of campaigns and initiatives for them will be much easier and more effective. In a nutshell, customer behavior analytics gives you an insight to your customers and allows you to understand their existing pattern and predict their actions in the future. It increases your value and puts you ahead of your game when it comes to creating better experiences that will grow your customer base and keep them with you in the long run. By taking advantage of comprehensive analytics platform, you are using your data efficiently thus gaining better insights as to how people interact and engage with your company.