Customer Analytics – The Key to Increase Customer Retention and Loyalty
The customer is in the driver’s seat.
Today’s customers are more demanding, fickler, more tuned to others’ opinions and are definitely more informed. Globalization, product commoditization, and a growing competitive landscape shaped by economic uncertainty have contributed to the rise of the new customers of today. Choice is not something they are lacking. In the age of this new-age, discerning and proactive customer, do you have an intimate understanding of your customers to find them, grow them and to keep them? If you don’t and want to do so, the only way ahead is by leveraging customer analytics.
Why is customer analytics essential in today’s business landscape?
If you are shooting in the dark, you risk shooting yourself in the foot.
Customer analytics is an essential driver of commercial success. It is a goldmine of information that helps organizations understand how customers behave and help them draw out plans to respond correctly. The deeper the insights into customer preferences, customer journeys, and customer experiences, the more accurate organizations can get to predict future buying behaviors and course-correct. The logic behind customer analytics is impeccable. The case for customer analytics is strong, and studies prove that. According to this survey:
- 58% of enterprises are seeing a significant increase in customer retention and loyalty as a result of using customer analytics
- 44% of enterprises are gaining new customers and increasing revenue as a result of adopting and integrating customer analytics into their operations
Clearly, we need the ammunition to manage customer interactions armed with in-depth, precise and current knowledge about every individual customer.
Are you convinced that you need customer analytics? If not, then read on to discover why it is the key to increase customer retention and loyalty.
Do you really know what your customer wants?
This is a no brainer. Customers expect businesses to know their needs before they express them. Customer analytics helps you leverage the entire sea of data that stems from several sources, analyze it and gain intelligent insights into what the customers want…and what they could want.
The data sources could be anything from interaction and transaction behaviors, social media sentiments, prospect demographics…the list goes on. Customer analytics takes all this and helps you forecast how the customer will behave in the future as well. By gaining an accurate view of the customer, you can make correct decisions on how to best acquire and retain your customers.
You can make no assumptions about an individual customer’s wants, needs, interests, or values based on the persona you’ve created using demographics. You need qualitative insights revealed through their behaviors and interactions to drive value with your products.
As Todd Yellin, VP of Product Innovation at Netflix nails it with his statement, “It really doesn’t matter if you are a 60-year-old woman or a 20-year-old man because a 20-year-old man can watch ‘Say Yes To The Dress’ and a 60-year-old woman could watch Hellboy.”
Can you drive personalized customer experiences?
The customer could be king, but customer experience is the star.
In a customer-centric world that we live in, is your customer experience stuck in the ’80s? If yes, then you need to take a leaf out of Amazon’s book and get a customer experience makeover. Today, customer service extends to the customer experience. Deliver great customer experiences and become a driver of customer success, and you’ll have greater customer loyalty. If you don’t, then you can wave goodbye to your customers.
The buck doesn’t stop and delivering exceptional customer experiences. Your customer experiences will only be great if you personalize them. Take the prolific amount of personalized recommendations Amazon provides. And do you know what this does? It helps them drive their sales. Statistics show that 35% of Amazon’s sales are generated through their recommendation engine.
Are your customer experiences friction less?
Do you agree it is the small things that make a big difference today?
My personal experience shows me that we, as customers, are spoilt today. I wouldn’t want to purchase a product from a poorly designed, hard to navigate eCommerce portal. I won’t renew a software product license if I have to explain my problem over and over again to a customer representative. I want the online persona of a brand to match its offline persona. That’s what I, and most other customers, want. The reason why I can do that is that I have a choice. Your customer is no different.
Driving frictionless experiences are of paramount importance today. And it is only by using customer analytics that you can anticipate your customers’ need and lead them to their desired path.
You have to capably quantify and visualize complete, cross-channel customer journeys both individually and in aggregate. You have to know where your customers are on their journey. You have to identify the top performing paths, weed out the troublemakers and gain a 360-degree view of the customer from all possible data channels.
Chicago-based clothing company Trunk Club, a Nordstrom company, for example, is delivering fantastic friction less customer experiences. They use real style experts to help customers create their own personalized style box. The customers get the same brick and mortar experience without going to the store!
Are you using your users for product development?
Your users are your greatest source of information.
Who are you building your products for? Your users, correct? Then why not ask the users what are the new features/functionalities that they want from you? A lot of companies use surveys to assess what new they should be doing for product optimization. But along with this, why not use the information that the customers are willingly giving you to make product improvements? Behavior and sentiment analysis, usage data, customer drop points etc. can all be mapped using customer analytics to design a robust product development roadmap…one that is based entirely on what the customers actually want and need.
Do you know who your at-risk customers are?
You can only manage what you can measure.
If you cannot differentiate between your ‘at-risk’ customers and your loyal customers, then how can you drive retention and loyalty? Some customers have more predictive behaviors than others. Some customers will not say anything bad to you about your company but will silently shift to the competitor. While it might surprise you when these low-lying customers jump ship, the problem actually lies in missing the silent little alarms.
Customer analytics will tell you exactly how engaged your customers are and will point out at-risk customers ahead of time. This gives you the bandwidth to be proactive in customer management, intuitively help out the customer, ease all ills and reduce the churn by helping you make smarter decisions, faster.
Are you driving targeted marketing, cross-selling and up-selling opportunities?
Your existing customers are the easiest to market to – be contextual.
With customer analytics, you can increase response rates, loyalty and ultimately ROI by ensuring that you contact the right customers with only highly relevant offers. You can reduce campaign costs by targeting only those customers who are likely to respond favorably. You can create proper segmentation of customers and deliver the right message more effectively armed with the knowledge of target populations.
Insights derived from customer analytics also help you find sweet spots for cross-selling and upselling opportunities. Banks, for example, can use analysis of credit score data and customer buying and spending pattern to offer credit cards, set credit limits, and offer staggered payment options.
Given that data dots are all over the place, customer analytics helps you connect every customer touchpoint that a user has with your brand or product. It connects the disparate data sources, helps you understand customer mindset based on their behaviors, provides a clear view of the whole customer journey and helps you segregate noise from insights.
With such clear and deep insights, you move from a reactive to a proactive model of customer service. Increased customer loyalty and retention then just become a natural consequence of your actions.