Editor's Note: In this blog, we will delve into the realm of customer analytics and its significance in shaping your business strategy. As businesses strive to meet customer needs in a rapidly changing market, data-driven decision-making has become more crucial than ever.
By harnessing the power of analytics, you can gain valuable insights into customer preferences, behavior, and feedback, which can guide your strategic planning. Whether you are a small startup or an established enterprise, join us as we explore the world of customer analytics and unlock strategies to achieve your business goals.
It is a fact that if you cannot keep your customers happy, they will leave you for another organization, and getting them back will be a tough task. As per the study by the American Society of Quality Control, 68% of customers go due to poorly managed customer relationships, and bad customer data is a big part of this. Customer Analytics has become a buzzword, and many companies are rushing to try and understand their customers using heaps of data due to fierce competition and customers demanding a more personalized experience.
In today's hyper-competitive market, a business cannot win by using its products and services. Instead, a holistic approach towards customer analytics can be the game changer to win customers' confidence and leverage end-to-end customer experiences (CX). Moreover, organizations need to determine what their customers need to gain a competitive advantage.
But why is customer analytics becoming crucial? In the current era of the internet, today's customers have been hooked to the web constantly. Whether it is buying a sophisticated electronic gadget or a simple household item or purchasing a service, they can access enough information via the internet. So, getting aware of customer insight and preferences is of utmost necessity to stand in the market.
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A researcher, Eric Anderson, discovered a segment of customers with highly unusual—and highly unpopular—tastes. If these customers purchase your new product, the researchers found, it is likely to fail. Because some purchases, which normally signal success, actually signal the opposite could be helpful for firms as they develop market-research strategies, or decide when to discontinue a product.
Thus it is necessary to collate enough information about customer trends & behavior to identify a fad from a trend and respond timely and accordingly. An in-depth understanding of customers' buying habits and lifestyle preferences provides more accurate predictions of future buying behaviors.
Why Customer AnalyticsIs Is Crucial For Businesses?
In the digital age of constant customer connectivity, businesses are accessible through mobile, desktop, and social media platforms. Today, customers expect a seamless and quick experience when searching for services or buying products. With consumers having slighter attention to spare these days, organizations have to make sure that the business targets potential clients.
This is where customer data analytics comes into the picture. Having knowledge- of how customers react to various tactics, organizations can improve their products to create a smoother user experience. In this way, organizations can grow their sales not with an extensive marketing campaign but with relatively minor tweaks that cater to the audience.
Think of customer analytics as a business for connecting with the target audience. It gives organizations direct insight into the customers' behaviors and patterns, allowing them to deliver content, communications, and solutions that meet the precise needs better than competitors.
As global management consulting firm McKinsey notes, organizations that utilize customer data analytics comprehensively are twice as likely to outpace their competitors' profits as companies that don't.
In other words, by making investments in customer analytics, you put yourself ahead of the curve - the better you know and understand your customers (their preferred choices, their buying habits, and the offers that they respond to), the more precisely you will be able to draw predictions regarding their future buying behavior and patterns. As per McKinsey's data, businesses that extensively use customer analytics see a 115% increase in ROI.
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Potential Benefits Of Customer Analytics
1. Marketing Efficiency
Putting more focus on the individual customer takes your marketing analysis at par, knowing your spending and the eyeballs you received in return. With customer analysis in place, knowing which marketing channels bring the highest value in terms of order size, retention rate, and profitability allows organizations to either cut marketing costs or expand their reach more efficiently.
2. Lower Customer Acquisition Costs
Customer acquisition costs can prove to be a profit killer for organizations. Finding new customers needs a combination of costly strategies, from targeted marketing and advertising to campaigns aimed at building brand awareness and name recognition. Without standard customer analysis, many of those customer acquisition efforts could go in vain. Quality customer analysis can help you fine-tune your efforts, so organizations can find hidden buyers and turn them into loyal customers for the brand.
3. Better Customer Retention
As per some of the studies, retaining an existing client costs less than attracting a new one. By helping organizations know their customers better, the correct analysis can boost profits, improve retention, by avoiding unnecessary costs and enhance efficiencies. For any successful business, focusing on customer retention is always a good place to start, because existing customers are the most significant and valuable assets for the business and brand.
4. Customer Engagement
Highly engaged consumers are likely to make repeated purchases. Having customer analytics in place, companies can market their products to the right customers. Additionally, the products or services will be customer-centric. All of this will lead to high customer engagement, which will ultimately help organizations gain a good ROI.
Customer Analytics Use Cases In Different Industries
Customer Analytics In Telecom
A prominent Telecom company with business units spread across the globe was facing issues in analyzing its customer segments and developing personalized services. The company was looking at identifying suitable customer segments while cutting down on campaigning costs. They also wanted to conduct a regular prognosis of their network adequacies to enhance customer satisfaction. The company was also encountering challenges with declining revenues, which enforced them to cut down on operational costs.
The customer analytic solution assisted the telecom company in identifying and engaging with the right client at the right time. The solutions provided also encompass new strategies to maximize customer lifetime value (CLV) through personalized cross-sell and up-sell offers. It also helped the company formulate an effective go-to-market strategy, which allowed them to ensure Quality of Service and offer a better Quality of Experience.
Customer Analytics In Insurance
In a challenging market, a leading insurance service provider was struggling and wanted to identify their wants and preferences and classify their customer needs. They wanted to develop products to target their customers and stay updated with technological advancements. In such a scenario, a customer analytics solution helped the organization to build and manage a more easily distinguishable customer database throughout the customer’s lifecycle.
Now, the company can ensure that the experience of its customers is satisfactory. Moreover, the insurance provider can build a roadmap to integrate analytics into their organization’s functions.
Furthermore, analytics employed in the insurance industry is focused on identifying and reducing fraud; estimating and managing risk and customer retention.
Customer Analytics In Healthcare
Multi-specialty hospitals engage with medical practitioners of various specializations in different geographic areas. Their revenue and growth depend, to a large extent, on the strength of their relationships with the physicians they engage with. A leading multi-specialty hospital engaged Customer Analytics to develop a physician relationship management system that would enable hospital liaisons to identify the revenue-generating/ top volume physicians and the most loyal physicians through tools like- “physician scorecard” to help maintain the hospital’s relationship with these physicians.
Furthermore, customer analytics worked with the raw utilization data and physician rosters from numerous hospitals to create a physician master and build a scorecard, which provides hospitals an overall picture of the proportion of physicians in each bucket. Therefore, strengthening their relationship with physicians.
Customer Analytics In Retail
One retail giant implemented customer analytics to increase conversions by placing products that are frequently bought together physically closer to each other in-store. Also, they personalize the customer’s in-store experience by giving out coupons or baskets. They do this by placing items that are frequently bought together in one basket and then discounting the overall product price.
Customer analytics revealed the CX pain points, which can be addressed in-store to provide a frictionless buyer’s journey and engage with people in the right way and at the right time. Moreover, they could modify their in-store inventories based on your on-site visitors, which helped them save a lot of time and money, hence, increasing sales.
Moreover, having a unified data platform that churns out customer data analytics will allow you to track metrics, bridge the gap between different data sets, create customer intelligence from data-driven insights, and streamline and optimize products and strategies for omnichannel retail.
Therefore, it can be assumed that Customer analytics can better guide business goals, marketing strategy, and product development to retain and engage customers today and tomorrow — and keep them loyal for the long term. By leveraging customer analysis, organizations can better position themselves to create value for customers and enjoy a more substantial ROI.
In this competitive environment, Polestar Solutions empower companies by delivering rich customer insights that drive outstanding CX and personalization. Time to Benefit from Customer Data Analytics, To know more about our solutions, book a session with us today.