There are several benefits for companies to analyze their customer data effectively. Data analytics is more than knowing what is in the database, but instead how to effectively use the data to gain answers and insights into customers and take predictive actions.

Top benefits of customer data analytics:

• Proactively anticipate consumer needs.
• Mitigate risk and fraud.
• Include relevant products and services.
• Personalize customer relationship.
• Improve and optimize the customer journey.

Read further to learn more about data analytics, its importance in specific business practices, and its uses in engaging customers and developing long-term relationships.

Table of Contents:

1. Defining Data Analytics
2. The Importance of Analyzing Customer Data
3. The Three Elements of Customer Analysis
4. The Best Marketing Practices are Data-Driven
5. The Necessity of a Customer Analytics Initiative
6. Data Analytics Categories and Actionable Results
7. Making the Most of Your Data

Defining Data Analytics

Data Analytics is defined as the science of evaluating information as raw data to draw conclusions based on the available data. The 'analytics' itself has primarily been automated using algorithms and computer processes that pull information to help companies better understand their customers, vendors, and business decisions.

Data, in the form of a database, can be difficult to interpret on a larger scale without the help of additional software or algorithms that can produce answers created to better our understanding of the data contents. Management uses the information to help make decisions about business processes or actions.

The Importance of Analyzing Customer Data

When a business has a better, more intimate understanding of customer behavior, they can excel in obtaining new customers, growing their brand, and building long-term customer relationships. Of course, as a business, you have the data on your customers, but data analytics helps you unlock its power.

In daily business activities, companies receive signals and information from their customers. Many areas of this data can be reviewed to improve your business's interaction with consumers, develop a positive brand reputation, and expand your consumer base.

What can be learned from customer behaviors?

• Product preferences.
• Social media behaviors.
• Demographics for current and future customers.
• Transactional behaviors.
• Communication preferences.

Analytics can be a powerful resource for organizations to gain valuable insights into how their customers behave and react. For example, businesses can learn which marketing approaches increase sales for specific demographics. Management can discover purchasing patterns and develop marketing strategies to target customers with frequently purchased products and services. Most important, customer analytics delivers these answers to the members of your team that can best use the information and act on it.

Consider these essential advantages:

• Boost sales to both new and current customers.
• Mitigate customer attainment and relationship costs.
• Lower customer churn and improve brand loyalty.
• Enhance workflow and lower the cost of customer marketing strategies.
• Strengthen sales and relationship longevity through targeting top prospects.
• Provide higher ROI on marketing and promotional opportunities.

The Three Elements of Customer Analysis

One of the first things learned by professional marketers is the three elements of customer analysis. However, not everyone has this background. Educating various departments about the three elements and how they impact specific key areas helps create a better vision of the importance of their work.

The three goals or priorities for customer analysis are:

1. Customer Identification.
2. Understanding Customer Needs.
3. Demonstrating how you can meet those needs.

These three bits of data can help improve your marketing strategy. It allows you to gain a glimpse of your consumer environment (identification), learn about consumer affect and cognition (customer needs), and consumer behavior (purchases).

The Best Marketing Practices are Data-Driven

Why focus on data-driven marketing? In the upcoming year, studies show that data-driven marketing campaigns will be in the position to increase core product sales by over ten percent. Marketing without data is like fishing; you dangle the bait and sit waiting for a customer to notice and take a bite. With data, you know who your customers are, where they are located, and what they are looking for.

An example of how sticking to data-driven marketing, even in times of volatile market changes, was demonstrated recently by several beauty product manufacturers.

The Necessity of a Customer Analytics Initiative

You may be wondering what a customer analytics initiative is. It is a plan or strategy. A customer analytics initiative is a framework for your analysis. Before analyzing customer data, your team should develop a plan to discover the correct data for your needs. You will need to define your goals, develop a method to measure prospective customers and results, initiate a technique to measure the data, and follow through on the results obtained.

It can be confusing where to begin, but having well-defined goals can help you strategize obtaining the data needed to make critical decisions. SMART is the analytics acronym that can help you stay on track. When defining your customer analytics initiative, you need to be SMART, which stands for Specific, Measurable, Attainable, Realistic, and Timely. In other words, develop your analytics strategy to get the answers you need quickly and accurately, and be prepared to act on the results.

Data Analytics: Categories and Actionable Results

When you want to gain the power and advantage your business needs from its customer data, you also need to understand the different types or categories of customer analytics and the generated results.

The Four Types of Customer Analytics:

1. Diagnostic Analytics: Discover “why” a customer purchases or acts.
2. Descriptive Analytics: Learn about past customer behaviors.
3. Predictive Analytics: Predict future behavior patterns.
4. Prescriptive Analytics: Suggests ideas to influence customer behavior.

When you look at this data, you want it to provide you with insight on improving. Advancements can come in many forms. For example, your goals can be again in customers, increase sales, discover ways to improve your brand reputation, or create better products based on customer needs. There are several beneficial customer analytics categories geared toward specific insights.

• Customer journey discovery.
• Customer experience recognition.
• Customer engagement development.
• Customer lifetime data review.
• Customer loyalty and retention analytics.
• Voice of customer detection.

Data can help businesses better relate to their brand supporters when presented effectively. When your brand reputation improves and customer relationships are managed effectively, organizations can build on these soft assets and grow in their industry.

Making the Most of Your Data

Analyzing consumer data is essential for business success. There is a great deal of information, and it can be challenging to know where to start. Harder yet is discovering a method for everyone to access the data so each department can make the most of customer analysis in their area of expertise. This can mean working with data across platforms, departments, and software applications. Mistakes can be very costly. Accurate data is the foundation of every type of business. You don't want to risk making errors.

DataCose has expert developers that can help you integrate your data into a collaborative platform environment and super-charge your abilities to gain powerful insights into your customers. Although you want data to work for you, you don't necessarily want difficulty accessing the data. DataCose can help energize your data discovery and delivery so that your business can use customer insights to help invigorate sales and reinforce your customer relationships.

When you need to get the most out of your data, you need DataCose. Contact us today; we can help review your data needs and develop a plan to motivate customers and grow your business.