Many enterprises are taking advantage of customer analytics software to create a powerful, personalized customer experience and improve their bottom line. Analyzing the vast amounts of data created by your customers is a process with tremendous promise for enterprises, offering the ability to personalize communications, predict customer churn (and take rapid action to prevent it), segment customers by demographic data, drill-down to specific channels or segments for custom analysis, and even make predictions about the impact of specific actions through the use of modeling.
With so many possible uses for customer analytics, it’s not uncommon for enterprise marketers to feel a bit lost. Where do you begin? What’s the best way to put customer behavior analytics to work for your company that will produce the greatest ROI? Understanding how customer analytics works and how it can be used to boost the bottom line is critical, as marketers are often faced with proving to C-suite executives that their investments in marketing technology are profitable.
To gain insights on the value companies get out of customer analytics, we asked a panel of customer experience experts and data analysis professionals to answer this question:
“What’s the #1 way customer analytics can improve an organization’s bottom line?”
Find out what our experts had to say below.
Ben is CEO of Decibel Insight, an enterprise-level customer experience analytics platform. Ben set up Decibel Insight to help clients investigate the ‘why’ behind their website performance. The platform launched in 2014 and is now used by marketers and web analysts in over 50 countries.
“The #1 way customer analytics can improve an enterprise’s bottom line is…”
By showing marketers the parts of the website that create frictions in the user journey and negatively impact on conversion rates.
With around 7 out of 10 carts being abandoned, tools that segment users, provide session replays, error and behavior reports, and attribution heatmaps will quantify the impact of the friction and drill down to the root causes. This level of insight is invaluable and should be compulsory for any company with an e-commerce site.
Using a suite of in-depth analytics tools will highlight where to make improvements to the customer experience and will ultimately improve your bottom line.
A good customer analytics tool will be able to demonstrate the cause behind a number of factors that are actively impacting your bottom line, particularly user friction.
We have met businesses in the past who were adamant about the effectiveness of their site but couldn’t explain why so many people were abandoning their purchases. We find that those in a business developing a site cannot be objective, as they are too close to the project. It often takes an analytics tool or an impartial perspective to determine the cause.
Anam is a digital marketer at HighQ, provider of innovative enterprise collaboration, file sharing, and content publishing solutions to the world’s leading law firms, corporate legal teams, and banks. She’s passionate about incorporating strategies with story telling to deliver inspirational and high impact campaigns.
“Content analytics can help to improve a company’s bottom line by…”
Attaining valuable data is no longer a problem, especially with so many free and paid tools that can give drilled-down insight into what is and isn’t working. The most challenging part is determining what factors you should be consistently tracking and how to translate the existing data into a usable format. Customer analytics alone isn’t going to improve your bottom line; it’s how you apply that new-found knowledge to your next marketing endeavor, how rigorously you stick to a routine, and how disciplined you are with execution that produces results.
One of the best ways to follow such a process and have it produce results is to translate the data into a narrative or flow diagram. It’s critical that you convert your data into some kind of story that you can easily explain to anyone in a few simple steps. This is because it’s not just about interpreting and visualizing data, but about identifying how different KPIs relate to and influence each other so you can create strong customer journeys that will result in conversions. The narrative aspect is often overlooked as many marketers get caught up in just pulling reports and measuring stats. As insightful as this is, the knowledge gained won’t produce effective results if the findings are not incorporated into your strategy or used to inform future decision making.
Jason Parks is a proud Buckeye and the owner of The Media Captain, a digital marketing agency based in Columbus. Jason has been featured in the New York Times, Inc., Yahoo News, Search Engine Watch, and Entrepreneur.com. Jason has also assisted in launching successful digital campaigns for Fortune 500 brands along with local, family-owned companies that have gained national attention.
“The #1 way customer analytics can improve an organization’s bottom line is…”
If you use analytics to conduct A/B tests to see what type of content resonates best with your customer, it can drastically increase your bottom line.
For our clients, we run numerous types of tests where we are swapping out imagery on a landing page or tweaking the headline and ad copy. Without analytics, we would not be able to determine which piece of creative yields our lowest cost per acquisition.
Organizations using analytics for A/B testing and multivalent testing can easily improve their bottom lines. The worst thing you can be doing is not testing at all.
Jumbi Edulbehram is the Regional President, Americas, for Oncam, maker of 360-degree cameras and software. He is responsible for all sales, marketing, and business development activities in the Americas.
“Customer analytics are beneficial to an organization’s bottom line, as well as business operations, by…”
Offering organizations the ability to use security investments in video surveillance for analytics purposes, thus spreading out the initial investment in such technology over a number of departments. Additionally, analytics are being used in the retail sector to count people in a particular section of a store which can accomplish a number of things, including calling attention to customers who may need help finding items or have questions. Not only does this improve customer service, it also fosters customer happiness and builds continued interest in making purchases, which helps with a retailer’s bottom line. In addition to people counting, customer analytics can also be used to analyze customer patterns – that is, how long a customer lingers at a specific end cap or display, how many customers engage with displays, and pinpointing overcrowding in a specific part of a store. All of this information can be used by retailers to not only make marketing decisions within a store, but also by managers who can redirect store employees where they are needed.
Dallas McLaughlin is a search engine optimization and pay-per-click expert, marketing guru, and family man practicing locally in the Phoenix-metro area. As full-time digital marketing specialist for The James Agency in Scottsdale, Ariz., Dallas is backed by one of Phoenix’s top advertising agencies. Previously, he has played an integral role for various clients including his time as marketing associate for an Inc. 50 company, in addition to independently contracting for many agencies.
“Customer analytics can improve an organization’s bottom line by…”
Translating massive amounts of data into strategically relevant and useful action items. This advanced insight gives businesses the opportunity for personalization and predictive analytics to answer the needs of the individual customer, resulting in increased customer acquisition in comparison to competitors, as well as increased customer retention, loyalty, and satisfaction. In addition to using customer analytics to acquire new business, businesses leveraging this data also experience an increase in sales to existing customers and an increased customer lifetime value, likely as a result of being able to act quickly in response to customer needs using fact-based decisions.
Courtney is a well-traveled book junkie, a word snob, and a technically creative writer. She’s got an amateur photography habit and a treasure hunting fever. Courtney obtained her B.A. from the University of Washington in international studies, specializing in foreign policy and diplomacy. A problem-solver and decision-maker, Courtney’s approach to life draws on her ability to see the bigger picture and think outside the box.
Her specialties include digital media analysis, direct sales and marketing, hotel and restaurant management, creative writing, technical writing, blogging, yoga, teaching, and team building. Presently, Courtney is a digital media analyst for Hotel Marketing Works.
“The #1 way companies can use customer analytics to improve the organization’s bottom line is…”
Customers are increasingly in control of the conversion journey, a journey that businesses track through qualitative and quantitative data. Understanding this journey is the purpose of analytics. Collecting the dimensions and metrics of this journey is the first step. Next is turning that data into something cognitive. Analysts have a tough job: they have to take a step back from the facts collected (what, who, how, where) and answer the ‘why’ question. This takes (often overlooked) great creativity. Why is the bounce rate so high on my landing page? Why are we getting macro conversions from people in Canada but are unable to capture U.K. attention? Sometimes the answers to these questions will require the team to re-configure their analytics. Other times the answers are powerful insights of customer behavior and businesses can optimize their sites for what’s working or adjust for what’s not.
Mat Brogie is COO at Repsly, Inc., a leading provider of simple mobile CRM and data collection software. Mat has 30 years of experience in large and small companies working with everything from Mom & Pop companies to global CPG organizations.
“The #1 way that customer analytics can improve an organization’s bottom line is by…”
Providing the insights needed to focus resources on the most profitable customer acquisition activities. Customer analytics provides companies with valuable insights such as:
This data informs decisions on where to apply sales and marketing resources for the biggest return. Without customer analytics, companies run the risk of spending time and money pursuing customers that don’t contribute effectively to the bottom line.
Paul Turner, Principal of SkyView Consulting, an independent product strategy and advisory firm, has spent over 20 years in Corporate Performance Management, Business Intelligence and ERP, and over 10 years at cloud computing industry and analytics leaders like NetSuite, Workday, and Adaptive Insights. Paul has BSc in Computer Science from Lancaster University, England.
“Customer analytics can help organizations improve their bottom line by…”
Identifying churn risk in profitable customer segments. Analytics enable companies to identify predictors to churn, such as social media indicators, call center issues, or downsizing a subscription, as well as gain customer satisfaction metrics such as NPS. These insights, together with an understanding of a customer’s profitability versus other customers, enables organizations to direct resources focused on retention towards the most profitable customers. This ensures that organizations can have more predictable return on their CAC (Customer Acquisition Costs) for high value customers. Further, by understanding customer analytics like customer profitability and churn risk, organizations can craft strategies around customer acquisition by simply choosing not to acquire customers that may not be profitable over the long term, perhaps due to higher service costs, or not focusing efforts on customers who are likely to churn before the company has a chance to recoup those acquisition costs.
Vaclav has established himself over the past 20 years as one of the leading entrepreneurs in Vancouver and has expanded from a foundation in information technology and web security to the connected worlds of crowd-sourced knowledge and social media. He is an award-winning technologist specializing in founding and growing service and software organizations with a strong emphasis on emerging markets.
Today, Vaclav is focused on setting the vision and architectural foundation for Prosyna Communication, Inc., founded in 2010; leading the overall direction and vision for Pacific Coast Information Services, which he founded in 1995; and most recently has entered into a strategic business partnership with TEEMA Technology Solutions.
“There are many things that you can extract from from your CRM, such as purchase patterns, customers satisfaction, and the ‘typical’ customer profile. This is what I would say to the CEO…”
Most likely your company has customers, and hopefully the information about them is stored in your CRM. Your marketing people are running campaigns for generating quality leads and the sales people are turning every single lead into an opportunity and ultimately a customer. The VP of Sales is monitoring the pipeline and poring through the vast number of reports to understand where all the sales are coming from. Life is beautiful. If only.
Sales reports are great for looking into the past. You can glean how many customers you have in this vertical market, how many bought a particular product, and what revenue came from each client. That’s good for your income statement, but what could you do to make it even better?
Wouldn’t be great to have a crystal ball to help you to see the future? Wouldn’t be great if you could answer any of the following questions:
These answers are hidden in your CRM data. It is for you to uncover and turn into gold. How? I’m glad you asked.
You need to have a few things in place. First and foremost: quality data. We are talking about finding gold, not sifting through garbage. The data you collect must be consistent and accurate. Second, you must build a list of questions you would like to ask of your data – ensuring that you are collecting information that can actually be analyzed. Third, start crunching the data to identify areas that can be refined to supply you with relevant answers. And finally, act on the information you learn.
Austin Paley is the Director of Corporate Communications for Blue Fountain Media.
“When it comes to improving a business’ overall growth and profit, one of the most important roles that customer analytics plays is in…”
Identifying referral sources. How did users get to your site? How did they enter our conversion funnel? Analytics that pinpoint which marketing channels are repeatedly, consistently generating the most customer traffic to your site and leading to the most conversions is an incredibly accurate method for determining which marketing initiatives are the most effective. Perhaps in the past SEO or PPC brought you the most leads, an increase in direct traffic, or whatever metric your key performance indicators may be based on. When you’re launching your next campaign, having this data that supports your efforts is extremely helpful. You want supporting data for each of your tactics to ensure that it is cost effective, time efficient, and at the end of the day proves which elements of your strategies are resonating best with your customers.
Laura Balentyne is the Founder & President of Balentyne, a human centered customer strategy firm. We specialize in advising executives of high growth companies how to deliver an exceptional, high impact customer experience that drives business results and propels growth.
“If companies really want to improve their bottom line they need to focus their customer analytics efforts on…”
Understanding what drives customer behavior, both positive and negative, and how those behaviors impact their business outcomes. Before I create a customer strategy for a company, I look at what existing customer data they have across their company. I evaluate the specific actions that their most profitable customers take versus their least profitable. My goals are to discover what makes these profitable customers so easy to service and why some customers are so challenging. I look at what each group brings to the relationship, how each group communicates and interacts with the company, and most importantly what that means in regards to retention, referrals, and lifetime revenue. By looking at the two extremes, I can often identify three specific behaviors of the less profitable customers that, if addressed, would help the customer to achieve greater value in their relationship with the company and help the company increase revenue and decrease costs in the process. Too often, companies are trying to be everything to everyone and it isn’t scalable, it drives up cost, and quite frankly, it doesn’t improve the customers’ experience. This method helps a company capitalize on what they naturally do really well. Working from a position of strength, they then have the opportunity to help their customers become their ideal customer while delivering greater value to those customers.
Tammy Katz is the CEO of Katz Marketing Solutions, a brand and marketing consulting firm, which she started in 2001. Previously Katz served as Vice President, Marketing at The Scotts Company and overall has 20+ years of corporate brand marketing experience. Katz is also an Adjunct Professor of Brand Management at Fisher College of Business at The Ohio State University.
“The #1 way customer analytics can improve an organization’s bottom line is through…”
The ability to provide segmentation analytics that identify companies’ most profitable segments (by consumer segment, by consumer usage segment, by product line, by geography, and by channel), so that companies can drive further growth in these most lucrative segments. In addition, analytics can identify the highest profit improvement opportunities (e.g., upgrading medium users to heavy users or increasing volume per account in selected channels).
Marc Prosser is the co-founder and managing partner of Marc Waring Ventures, a firm which develops specialty internet properties for high value audiences. The company’s portfolio of websites includes Fit Small Business, which provides product and service reviews for small business owners. Started in 2013, Fit Small Business serves as the “Consumer Reports” for small business owners. Prior to starting Fit Small Business, Marc was the CMO of FXCM for ten years. He joined as FXCM’s first employee and grew the company to more than 700 employees.
“Customer analytics has evolved, now enabling businesses to improve their bottom lines by…”
Making it possible to analyze vast amounts of data to focus on the most profitable customers.
Customer modeling used to be a simple RFD model. You’d predict your best future customers based on your past experiences with the customer, specifically their recency and frequency of purchase, as well as dollars spent.
We’ve come along way since then. Now it’s possible to easily sort through a wide range of demographic data. From there, you can focus your sales and marketing on those top customers. Over the Internet you have access to an
especially rich set of data, along with the ability to specifically target your ideal customers, often with ads that appeal to their particular interests.
Ruben Ugarte is an Analytics Consultant who works with startups to help them better understand their data. He believes analytics can help organizations of all sizes sell more and connect with their customers in a more meaningful way.
“The #1 way customer analytics can improve an organization’s bottom line is by…”
Providing cold, hard facts about who your best customers are. Its not just about looking at who orders the most but who interacted with your brand, referred their friends, and shared your brand on social media. Analytics would capture all of this information, and you can then use it to create more of these super customers by figuring out what attributes they posses and where you could find more people like them.
Jim Hoddenbach founded Disciples of Flight with a close friend to provide professional aerial photography and video service. They also run a blog focused on general aviation that serves as an information resource for private pilots.
“In marketing, there’s a common saying that goes something like, ‘I know I’m wasting half my marketing budget, I just don’t know which half.’ Good analytics help you by…”
Providing a very specific profile of your customer or customers. This, in turn, allows you to test and refine your marketing materials and efforts to better appeal to and retain your current customers, as well as draw in those with more potential to be your new customers. In the end, you’ll waste fewer marketing dollars and get better results.
Mike McRitchie is known as the “Profit Inspector” – a highly sought-after marketing and operations analyst and consultant to the small business community. He is famous for quickly analyzing businesses and uncovering hidden assets and profit opportunities. He delivers clear insights with easy-to-use action plans that get results.
“Companies can take advantage of customer analytics and realize improvements to the bottom line by…”
Identifying your top 20% clients in terms of lifetime sales or profit value (from their purchasing history), and then giving them special treatment (special offers, closed door insider only specials, Platinum Club offers, getting their feedback on new products or services before they’re rolled out) can help you make huge sales and profit gains. Typically people neglect their best clients or don’t even know who they are. Customer analytics, even at this most basic level, can significantly improve an organization’s bottom line.
Vitaliy works at Helprace and has been into customer service ever since he co-founded a small construction company five years ago. Vitaliy holds a BA from Canada’s Ryerson University.
“Customer analytics allows you to do one thing and do it well…”
It lets you provide a personal experience by targeting your promotional messaging to different customer groups. For example, you may offer a 15% discount to your most loyal, repeat customers and a small thank you note for their business.
Then there is the newly registered customer who isn’t active or hasn’t yet made a purchase. You can use the same strategy to remind them to log in and make a purchase. By offering them a similar discount (but with different messaging), you can turn your dormant customers into engaged ones.
Gene Connolly is the founder, President, and Principal Data Analytics Consultant of Connolly Consultants LLC. Gene is a “citizen data scientist” and longtime IT professional with VP and Director level experience and expertise in software development, enterprise application management, and knowledge/information management.
“Companies can improve their bottom lines through customer analytics by…”
Creating a curated digital record of both customer demographics and behavior in all transactions and at all touchpoints with a business, thereby allowing for the development and deployment of predictive models to minimize revenue loss due to churn and increase the effectiveness of targeted marketing and promotions driving new sales and revenue with lower marketing spend. You don’t want to lose hard-won customers, sales, and revenue by being blind to good customers who are having a series of poor-quality interactions with your business that may cause them to look to your competition. You do want to maximize leads generated and sales closed by spending the least amount of marketing dollars on just those prospects that your data tell you are the most likely to buy.
Jeremy Greenberg is Co-Founder and CEO of Flyte Fitness, the manufacturer of Core Flytes, patented portable stability trainers used by consumers and fitness professionals worldwide. Jeremy is an entrepreneur and advisor, with an MBA from Wharton.
“Companies can improve the bottom line with customer analytics by remembering that…”
Your best customers are your customers.
Across every industry, the financial value of a customer to a company varies significantly. Whether a business is B2B or B2C, subscription or one-time purchase, service or product, its customers are not all equal. The cost and time to acquire customers can be quite different depending on what channels are used and what segment profile customers fall into.
The profitability of a customer once acquired, or lifetime value, also varies significantly based on a number of factors. Customer analytics, done properly, can help tease out who are the most profitable customers and why they are the best, and likewise for less profitable or unprofitable ones. However, it’s easier said than done. Most companies do not have the data infrastructure, resources, or time to conduct a proper data analysis.
So, here’s one way that any company can use very simple data to improve its bottom line: Remember that your best customers are your customers. Using one piece of binary data, whether or not someone is a customer, we can
dramatically improve the bottom line. In our search for growth, we often focus too much on scaling to get more and more customers, with less attention paid to current customers. It is much easier to retain a customer than acquire a new one. It is more likely that you have accurate contact information for your customers than those who are not. It is much more likely a current customer will buy a new product or service from you than someone who has no relationship with your company. It is only possible for a someone to recommend your product or service if that individual is a customer. With word-of-mouth marketing driving 70-90% of new sales, an effective way to acquire new customers is to invest in current customers through engagement and excellent service, as well as by listening to and rewarding them. After all, your best customers are your customers.
Leeyen Rogers is the VP of Marketing at JotForm, an online forms platform based in San Francisco.
“The #1 way customer analytics can improve an organization’s bottom line is by helping with…”
User retention. Retaining customers is the gift that keeps giving, month after month. It’s much more cost effective to retain customers than to acquire new users. Customer analytics can tell us how long it takes for users to receive a response and how satisfied the user was with the reply from the company. This is integral to the success of a company’s customer support, which ties directly into the profit margin. If it takes too long for a customer support professional to respond, perhaps the team needs to be scaled up. Analytics can also tell companies when the peak times are for customers trying to contact the company, and this can help teams adjust their scheduling and strategy.
Jon MacDonald is founder and President of The Good, trusted e-commerce and lead conversion advisors delivering significant online sales. Jon and the team at The Good have made a practice of advising brands on how to see e-commerce sales double or more within 12-24 months. Jon recently released his latest book on their methodology, Stop Marketing, Start Selling.
“The #1 way customer analytics can improve an organization’s bottom line is…”
The basic value proposition of any business is to help people get what they want. A website is no different. Nobody watches TV for the commercials or visits your website to check out your latest marketing campaigns. If they’re on your site, your marketing already worked. Now it’s time to help them get what they came for. And the best way to find out what they want is via customer analytics.
The future of effective web design (and profitable websites) begins with your customer. Creating web experiences that save them time will earn you more money. First, however, you have to know who they are, what they want, and how best to serve it to them. Whether you run an e-commerce site or lead generation site, improving your bottom line starts by better understanding and serving your prospects and customers.
Kyle is the Founder and President of Pawstruck.com, an online retailer of natural dog treats and chews. In 2014, Kyle left his career in engineering looking to combine his passion for both dogs and eCommerce, and Pawstruck.com was born. Pawstruck.com sources premium ingredients, providing pet owners the healthiest and most affordable pet products available.
“The #1 way customer analytics can increase our AOV, CLV, and bottom line is by…”
Identifying our very best customers (we refer to them as whales). For us, whales are customers who have an AOV and/or CLV over certain performance thresholds. By analyzing customer analytics on our whales, we are able to determine which advertising platforms are drawing in these sorts of valuable customers. Additionally, we use the data to determine which products our whales are usually buying. With that information, we can then focus our ad spend on the channels which not only convert the best, but those that get us the most whales. We also will promote products which whales seem to purchase the most, leading to a more valuable customer base that purchases more often for higher dollar amounts — thus leading to a improved bottom line.
Jeremy graduated from UCLA in 2005 with a bachelors degree in economics and founded Schaedler Insurance shortly thereafter. The Northern California-based insurance agency specializes in surety bonds for California construction professionals. Jeremy is happily married and the proud father of two young boys.
“With quality customer analytics data it becomes much easier to…”
Identify and market to profitable customer segments. For our business, we were able to identify large distinctions on when customers were likely to purchase online transactions based on time of day and the day of the week. The data showed us how to properly market to our customers in the most cost effective manner, which improved our bottom line and was very helpful considering many of our findings were counter-intuitive.
Tony Faustino is President of Faustino Marketing Strategies and publisher of the marketing and corporate strategy blog, Social Media ReInvention. He teaches clients how to market expertise on the Internet.
“Savvy B2B suppliers use improve their bottom lines by using customer analytics to…”
Measure Trust Signals when a prospective buyer initiates the research stage:
B2B companies who use customer analytics to identify, measure, nurture, and fill their sales funnels with qualified leads expressing their trust ultimately win with higher lead conversions and sales yields.
That’s significant bottom-line ROI for a B2B company facing three to six month sales cycles.
Sarah Hardwick, founder and CEO of Zenzi, helps companies forge deeper, more profitable relationships with customers by understanding their inner needs and desires. Hardwick has been recognized as a ‘Best Young Entrepreneur’ and a San Diego Most Admired CEO. Her firm has increased awareness and inspired business results for Nestle, Shea Homes, DIRECTV, MapQuest, Grocery Outlet, Ghirardelli Chocolate, Chiquita, Grand Pacific Resorts, and many more.
“The #1 way customer analytics can improve an organization’s bottom line is…”
Nothing is better for profitability or more coveted by businesses than happy, loyal customers that make repeat purchases, provide referrals, and drive true product innovation. Analytics, therefore, need to be used by marketers to get at the deeper questions – not just what customers did on social or which messaging resonated the best, but why customers were motivated to engage with the brand.
The secret in driving true ROI and sales is in understanding ‘why’. Decades of psychological research has proven values are one of the most powerful drivers of consumer behavior. For businesses, values are a powerful tool to inform decision making about how to reach your best customers, which messages are the most effective, who they trust, and what triggers them to engage and buy.
We leave traces of our values in many things we do and say, whether it’s a status update on a social media site, an online review of a product or service, or a recommendation to a friend. You may not realize it, but you already have hidden clues, or values markers, in your data that indicate the inner motivators of your customers.
Marketers can use this information to help companies tailor strategies to specific segments, speaking to customers at a level that resonates with their subconscious needs and desires. Do they have a passion for exploring life? Strive primarily to protect their families? Want to hear from people similar to them to make important decisions? Marketers can begin to gain actionable insights to best serve their top customers.
Once you uncover the rich values motivations of your best customers, it’s easier to identify relationships and patterns that go beyond demographics and provide deeper insight into their true motivations. Putting that data to work for your business creates powerful values-based marketing messages, which will help you to differentiate your company and stay ahead of your competition.
Peter Murphy is co-founder and CEO of Pocket Prep, Inc. Before launching Pocket Prep, Peter held several management positions at Lockheed Martin. Peter holds a Master of Science in Management, Aerospace and Industrial Management from Embry Riddle Aeronautical University-Worldwide. He earned a Bachelor of Business Administration in Operations Management from the University of North Florida.
“The number one way customer analytics can improve an organization’s bottom line is through…”
A three-step approach: automation, investigation, and application. In order to gain any value from customer analytics, an organization would need to automate the reporting process, investigate the reports themselves, and then apply the findings by experimenting with key business processes. There are dozens of solutions for capturing and presenting customer data, but businesses fall flat when they stop actually looking at their data.
For our small team, we learned that finding time to investigate the data was the hardest part of making intelligent business decisions. Every business is different. Each business has its own set of key performance indicators that make it tick, and it’s these KPIs that must be measured, particularly when factoring in customer interaction.
Leveraging technology allows organizations to reduce their operating costs while still gaining actionable, data-driven business insights. Automating the data gathering and reporting processes means you’ll save time and energy. Beware of reports requiring excessive manual touch time, as these are a well-concealed form of organizational waste. When looking at customer analytics reports, spend time investigating the details. Abnormalities, outliers, and trends should be considered as they may be leading indicators that require action.
Once informed, the organizational leaders need to apply the information to their actual business processes. Data is worthless when its sits on a virtual shelf collecting dust; it’s equally worthless when information derived from the data is disregarded. Only when a company automates, investigates, and applies the data gathered from customer analytics tools would they ever see an increase to their bottom line.
Philip Elliot is the Marketing & E-Commerce Manager at We Sell Electrical, an electrical goods e-commerce retailer based in Nottingham, UK. Their products include lighting, LED, CCTV, DIY, and energy saving solutions for around the home.
“We use customer analytics platforms to see…”
How customers are engaging with our site. We keep a close eye on the pages via which they access our site, which further pages they navigate to, and at which point they drop off. It’s important to know at which point they’re dropping off, as identifying consistent patterns here can help us solve serious flaws with our user experience and conversion rates.
This was especially the case with our checkout process. Using Google Analytics, we identified that users were consistently dropping off during the fourth page of our checkout process. To counteract this, we reduced the steps in our checkout process, making it quicker and more streamlined. Now a purchase can be made within 3 steps.
Since we implemented this, our conversions immediately improved month-on-month, sometimes with increases as large as 30%. Your customer’s time is precious, and you need to make your user experience as efficient as possible – they won’t be around for long.
Matt runs all sales and marketing activities at Sauce, a company that provides customer segmentation for retailers. Sauce empowers marketers to build advanced segments of customers based on all their data and keep them in-sync with their favorite marketing tools, in real-time.
“Customer analytics can allow retailers to know…”
When they are about to lose a customer and prevent it. It costs six times more to acquire a new customer than to drive revenue from an existing customer, and so stopping your customers from lapsing/leaving is incredibly cost effective and has a huge ROI.
Oliver oversees growth at GorillaStack and has been actively involved in digital marketing, CRM, and marketing automation for 15 years. Most of this time Berger spent working with large organizations and a number of startups with a focus on customer acquisition and growth.
“The #1 way companies can boost the bottom line with the use of customer analytics is…”
If i had to pick one metric to highlight, it would be the acquisition channel from which the customer was acquired. I have extensively used this as a metric to determine ROI and a Customer Lifetime Value (CLV) as a factor of acquisition cost.
Most organizations only track acquisition data anonymously and then apply an aggregated Cost Per Acquisition (CPA) across the marketing channel. For example, if an organization spends $100 in a channel and creates five customers, they determine a $20 CPA from that channel.
What many organizations fail to do is to apply that data at a customer level and track through a customer’s lifetime. With the above example, a business may have two comparable channels (channel A and channel B) with the same metric – $20 CPA for $100 spend. They seem to be the same, and they have an overall spend of $200 for 10 customers.
Let’s say the organization books $300 in revenue. Many organizations assume a ROI of 50% and continue to spend across the channels. Remember – same CPA, positive ROI.
What many companies miss is that the customers from each channel will likely be different. It may be that the five customers from channel A all went on to spend $40 across their lifetime, resulting in 100% ROI. Say all the customers from channel B went on to spend $20 each across their lifetime – that would result in 0% ROI. So as you can see, on the surface, for a $20 CPA it looks as though the channels are comparable, but if you delve deeper, they are not and an organization would be better to focus its spending on the channel with 100% ROI.
From experience, many organizations miss the above while it is probably the #1 way to improve the bottom line.
Luke is a Growth Marketer at Hurdlr.com, based in Washington DC. You can usually find him doing Jiu Jitsu, listening to Taylor Swift, or growing a company.
“The #1 way data can improve a business’s bottom line is through…”
Testing. With data, one is able to test a certain function or change within their product, analyze the reaction to that change by the data that they have available to them, and then iterate on that data. Without data, it would be impossible to know whether or not that change had created a positive effect and it would be total guesswork.
Honestly, it’s difficult to describe just a single way that analytics benefits companies. A few other reasons are:
There are many examples, but the point is that without analytics, you are in the dark.
NGDATA helps data-rich companies in financial services, media/publishing and telecom to drive connected experiences. Our next generation customer data platform, Lily Enterprise™, puts people at the center of every business via Lily’s Customer DNA, which continuously learns from behavior to deliver compelling experiences.Learn More...