Customer analytics refers to the processes and techniques used to collect insights about the customers (their buying behavior, spending capacity, etc.) in order for an organization to make business decisions.
Customer analytics has become a critical part of the decision making process for an organization. In order to understand - why has it become important?, note this: Times have changed and the customers have now become more informed and empowered than ever, and keep becoming more so. Customers now have access to a lot of data anywhere, any time. They now have questions such as where to shop, what to buy, how much to pay, etc. which did not prevail earlier, making it increasingly vital to get and understand customer insights such as - how will they behave while interacting with your business, so you can respond to them accordingly. The deeper your understanding of customers' buying habits and lifestyle preferences, the more accurate your predictions of future buying behaviors will be – and the more successful you will be at delivering relevant offers that attract rather than ghosting customers.
The customer analytics process goes as follows -
A. Understand your target audience’s age, demographic, geographics, purchasing power, etc., and set goals accordingly.
B. Collect all the necessary customer data (qualitative and quantitative).
C. Organize this collected data into spreadsheets or modal calculators.
D. Analyze, calculate and arrange the data.
E. Visualize important data.
A. Customer analytics helps better understand the customer and why they select a particular product.
B. Regularly performing surveys help understand and improve customer experience and marketing effectiveness.
C. Customer Analytics helps put out the right message at the right time through the right channel.
D. It helps achieve a higher ROI and reduced campaign costs.
E. With the help of customer analytics, businesses can reduce attrition rate by predicting customers that are most likely to leave and develop improved campaigns to retain them.
A.It can be a breach of customer privacy as the tools used for this have access to information such as rentals or purchase history.
B. Needs trained professionals to use customer analytics tools or to undertake surveys as the tools used can be highly complex.
C. Customer Analytics can be highly expensive.
CX analytics is a kind of descriptive analytics, asking “what happened” during the customer journey. These are often seen because of the “standard” type of customer analytics: they summarize information into something very easy to understand and which is easily explainable.
Customer journey analytics is your customer’s purchase/rental history, product buying/usage, and having a deep insight into things like abandoned shopping carts and returns. It includes conversations the customer might have had with support, opened outbound emails from the organization, and CSAT ratings.
Customer retention analytics are most helpful in upselling or cross-selling to an existing customer, as it has been noticed that it is far more easier to retain existing customers than to acquire new ones.
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