What is Customer Analytics and How to Do It Effectively?

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Businesses come in all sizes, and so do their customer bases. A tiny store might have a few hundred customers they know by name, while a considerable bank might serve millions. The biggest companies, like Google and Facebook, have billions of users. Figuring out who your customers are and what they like is crucial. The better you understand them, the easier it is to keep them happy and returning for more, which means more money for your business. This process is known as customer analytics. 

Understanding Customer Analytics

For example, you're running a bakery. You know some people love chocolate croissants, while others prefer blueberry muffins. But wouldn't it be great to know what everyone likes? Customer analytics, or customer data analysis, is a secret tool that collects customer information, such as their purchases and how they interact with your store. By analyzing this data, businesses can understand what their customers want. This feature helps them make all sorts of decisions, from finding the best ads to attract new customers who love muffins to creating even more delicious pastries that everyone will enjoy.
 

Apart from that, studies show businesses that use customer analytics effectively see way more profit. We're talking over 90% more. So, if you want to run a successful business and keep your customers returning for more, customer analytics is a secret weapon worth using.

How to Do Customer Analysis?

So, you want to use customer analytics to understand your customers better? But there are a few steps to take first. Here are the four key pieces you need:
 

• Data Collection Tools: Tools like Google Analytics track how people behave on your website, revealing what pages they visit and for how long. Many other options are available, but these tools only give a small picture.

• Data Organizer: This acts as a traffic director for your customer data. It takes the information from all your different spy gadgets and sorts it out, making sure everything is organized and speaks the same language. This way, it's much easier to analyze later.

• Data Storage (Data Warehouse): It’s a giant vault where all your organized customer data is kept safe and sound. Data warehouses can store information from many sources, like your website, app, and emails. Having everything in one place makes it easy to find what you need.

• Data Analysis Tools:  Finally, you need a tool to crack the code and unlock the secrets hidden in your customer data. These are like code-breakers that take all your organized information and turn it into insights you can understand. Some require a little knowledge of a remarkable language (SQL), but more effortless options are also available.

By putting these four pieces together, you'll have a decisive customer analytics toolbox. As a result, it will help you understand your customers like never before and make smarter business decisions that keep them happy and coming back for more.

Types of Customer Analytics

Customer analytics has four types, and understanding each helps you get the most out of them. By using all these tools together, you'll have a complete picture of your customers and be able to make the best decisions for your business. 
 

• Descriptive analytics tells you what happened, like how many red shirts you sold last week, but it doesn't tell you why. For example, maybe sales of red shirts are down. However, it can't tell you if it is because the style is unpopular or if you just ran out of stock. 

• Descriptive analytics look at your receipts, but diagnostic analytics goes further. It asks your customers why they bought something (or didn't!). So, if you see a lot of low ratings in your customer satisfaction surveys, diagnostic tools can help you figure out why. You ask them directly through open-ended questions or look for clues in comments and reviews. By digging deeper, you might discover the low ratings are due to long wait times on the customer service line. Now you know the cause and can work on fixing it. 

• Predictive analytics look at past purchases and predict when someone might run out of coffee and need a refill. As a result, it lets you send them a friendly reminder to reorder, keeping them happy and caffeinated. It can also predict which customers might be thinking about quitting your service. 

• Prescriptive analytics takes everything it learns from customer data (past actions, why they did them, and even what they might do next) and suggests the best course of action. Suppose you want to keep more customers happy. Prescriptive analytics might crunch the numbers and tell you that if you can solve customer problems 20% faster, you'll see a 50% increase in customers who stick around.

Some Best Customer Analytics Tools

Customer analytics tools are notable apps that help businesses understand their customers better. For example, it has a magnifying glass to see how your customers behave, what they like, and what they don't. Moreover, these tools can be part of an immense CRM system or exist. They collect customer data from places, websites, emails, and social media and then analyze it to give you clear insights. As a result, it helps businesses improve the customer experience, tailor marketing campaigns to specific groups of customers, and even predict what customers might do next.
 

Many different customer analytics tools are available, some simple and some more complex. Heap might be a good fit for a small bakery, while a more complex tool, like Adobe Analytics, might be better for a giant corporation. No matter the size of your business, there's a customer analytics tool out there to help you unlock the secrets of your customers and keep them coming back for more.
 

List of the tools is as follows:
 

• Adobe Analytics.
• Mixpanel.
• Heap.
• Google Analytics 360.
• Amplitude.

Top Customer Analytics Platforms

These customer analytics platforms reveal this hidden world. 
 

• Userpilot: This tool lets you group your customers based on things like location or what device they use. You can even create specific groups based on how they answer surveys or how they behave within your app. As a result, it helps you understand who your customers are and tailor your marketing to their needs.
• Kissmetrics: Kissmetrics can show you exactly where they drop off in the process so you can fix any problems and keep them buying.
• Hotjar: This tool uses heatmaps to show where people click and scroll on your web pages. However, this helps you see what content is grabbing attention and what might be getting missed.
• Totango: Totango tracks all sorts of data to give you a quick snapshot of how your customers are feeling so you can address any problems before they churn.
• Crazy Egg: This tool takes a snapshot of your web page and creates different reports based on it. One report shows where people click the most (like a heatmap), while another reveals exactly where people scroll down. As a result, it gives you multiple insights into how people use your website so you can make it even better.

Customer Journey Analytics Use Cases

A customer might see an ad online, visit your website to browse, and finally come to your physical store to try things on and buy an outfit. It’s their customer journey. Traditionally, you might see bits and pieces of this journey in separate reports. 
 

Customer Journey Analytics is a tool that lets you do just that. It combines data from places, your website, call center, and cash registers into one giant report. As a result, it lets you see the entire customer journey from the beginning to the end.
 

• Understand your customers better: By seeing the whole journey, you can see what's working well and where things might be confusing or frustrating for customers.
• Empower your team: Everyone in your company can access this data and use it to make better decisions. The marketing team can see what ads drive sales, while the store staff can see what products people are interested in online.
• Unlock hidden insights: This tool uses some data science magic to uncover deeper trends you might not see otherwise.
• Easy to use: This tool lets anyone see and understand the data with clear visuals and reports.
   

By seeing the entire customer journey, you can make smarter decisions about your business and keep your customers happy at every step.

Customer Analytics Example

Here are some examples that improved their customer service with better data:
 

• Northmill Bank: This bank wanted to give their customers incredible service, but their systems were all separate. Imagine having different email accounts for these types of questions! However, it made it hard for their customer service reps to help people quickly. By switching to a new system, Northmill Bank created a single view of each customer. This way, their reps could see the entire history of a customer's questions and give them the best possible service. Customer satisfaction scores went way up without having to hire more staff.
• Games24x7: This gaming company gets a lot of questions from their players. Instead of answering the same questions over and over, they use data to figure out which questions are most common. Then, they create automatic responses to those questions! As a result, it frees up their customer service reps to focus on more complex problems. By using data this way, Games24x7 can resolve almost all customer requests within a few hours.
   

These are just a few examples of how companies use data to improve their customer service. By understanding their customers better, these companies can fix problems faster, answer questions more efficiently, and keep their customers happy.

Conclusion

In today's data-driven world, customer analytics are essential for businesses of all sizes. By collecting information on how customers behave and interact with your company, you can deeply understand their wants and needs. It can help you improve your marketing campaigns, develop better products and services, and predict what customers might do next. By using the right customer analytics tools, you can see the entire customer journey, identify areas for improvement, and keep your customers happy and coming back for more.