Why customer data analytics is essential for business growth

Highlights

You’ll learn about why you need customer analytics:

• Understand your customers: Provides insights into customer behavior, preferences and engagement to deliver personalized experiences
• Reduce churn: Monitors customer risk levels to create strategies that ensure they purchase from your brand, reducing churn and increasing customer retention
• Increase sales: Actionable information enhances marketing effectiveness, helping you identify additional revenue opportunities
• Improve segmentation: Group customers for personalized marketing campaigns

Brick and mortar store managers gain valuable insight about their customers because they interact face-to-face, which allows a better understanding of customer requirements. Online retailers, stores and companies face great difficulty tracking customer behavior data as customers communicate through their website, mobile app, digital kiosk or social media platforms. 

Luckily, you can still know your customers through customer data analytics. With 50% of customer analytics champions likely to have sales above their competitors, analyzing your customer data gets you going and keeps customers happy.

That said, it’s essential to collect and analyze your customer data the right way. Moreover, it’s not about just collecting data; it's about uncovering the stories hidden. Understanding your customer journey helps you provide a superior customer experience and overcome challenges like privacy concerns and data quality.

What is customer data analytics?

Customer data analytics is the process of collecting, sorting and analyzing customer data through multiple channels. Your process of making decisions becomes easier when you analyze customer behavior patterns, preferences and engagement levels. The process uses techniques like:

• Data mining
• Machine learning
• Predictive analytics

You can collect customer data from multiple touchpoints and platforms. From there, your team members use customer analytics tools to analyze the data and compile a report. The deeper your understanding of customer habits and lifestyle preferences, the more accurate your predictions. You’re more successful at delivering relevant offers that encourage customers to purchase rather than alienating them. 

But how is customer data analytics different from traditional analytics? Let’s find out. 

Customer data analytics vs traditional analytics

Benefits of customer analytics

Customer analytics provide a complete 360-degree view of your customer behavior and preferences. Here’s how it’s a game-changer for your business:

Creates personalized experiences

With customer data at your disposal, it’s easy to create personalized experiences based on their preferences, likes, dislikes, behavior and purchase patterns. As customer expectations are high, the personalization experience goes far beyond addressing customers by their names. It’s more about delivering personalized content, email and product recommendations at scale. Customer analytics delivers a personalized and targeted approach that takes the shopping experience to another level and increases the likelihood of purchase because customers know you understand their requirements.

Imagine a hotel chain taking the time to really know its customers. They notice that some people love booking quick weekend getaways, so they send out exclusive offers for last-minute stays that fit those plans. Someone may have a liking for spa resorts? They receive suggestions for luxury retreats or wellness packages that match their style. It’s like having a travel buddy who just “gets” what you love and makes planning your next trip even easier.

Lower customer churn rate

One of the challenges faced by companies is mitigating the customer churn rate. Data analysis provides information about high-risk customers, what factors are causing the churn and even predicts the churn before it happens. It gives you time to prepare for such customers and develop strategies to convert them into repeat-paying customers.

Increase sales

Your business sales will increase when you understand the motivating factors for a purchase. Analytics reveal the motivations behind buying decisions to help you make strategic updates in your marketing approaches and choices. It surfaces upsell and cross-sell opportunities that you might’ve missed. The system helps you develop unique marketing plans, accurate promotional efforts and targeted product recommendations. Predictive analytics forecasts market trends that help you manage your inventory level and fulfill demands. Such an analysis-based strategy leads to satisfied customers who generate more sales for your business.

Improves customer segmentation

With customer analytics, you identify meaningful groups within your customer base. It can highlight frequent buyers, seasonal customers and value-driven shoppers, ensuring personalized offers and messaging. Such detailed and precise segmentation provides effective engagement and improves customer satisfaction.

Higher customer engagement

Customer engagement improves with customer analytics because it uses past behavior and shopping trends for predictions. Using this information, you can identify the customer journey and the challenges they faced. Your analysis delivers individualized content with specific offers precisely during the moments when customers need them, creating a seamless experience. This increases engagement, builds trust and fosters loyalty.

Customer analytics tools

Some customer analytics software include:

Contentstack’s Lytics

Contentstack’s Lytics makes it easier to connect with your audience. One aspect that distinguishes Lytics from traditional CDPs is that it updates customer profiles, makes informed decisions and creates dynamic audience segments in real-time. Contentstack's headless CMS delivers exceptional results when integrated with Lytics. Every interaction on your websites, mobile app and email messages can be adapted in real-time. The system consolidates data and content into a single platform. Lytics improves workflow, campaign efficiency and personalization.

Case study: How Industry Dive used Lytics to engage readers and drive results

Industry Dive sought to gain a deeper understanding of its readers across multiple publications to enhance engagement and attract advertisers. The company failed to achieve results from traditional analytics tools, so it decided to implement a real-time CDP like Lytics. This move improved segmentation and delivered personalized content according to reader behavior. The company witnessed a 40% jump in campaign conversions, lower campaign costs and smarter cross-channel content recommendations. Industry Dive now creates better experiences for over 16 million readers while helping advertisers achieve their goals.

After using Lytics, Robin Re, VP Marketing at Industry Dive, said: 

“Before Lytics, we struggled to get a clear picture of our readers. Now we have much better customer intelligence about how people are engaging with our content and can use that information to drive smarter content recommendations and better experiences.”

Read the complete case study here. 

Google Analytics

Google Analytics tracks website performance, user behavior and campaign results. The tool contains all the features necessary to monitor customer interactions on your websites. You can even monitor traffic analysis, audience insights and goal tracking to measure conversions. Using Google Analytics, it becomes easier to determine the best-performing marketing channels.

Salesforce

Salesforce is a customer relationship management (CRM) tool that does more than track customer relationships. The platform keeps all your customer data organized, helping you nurture leads, drive sales and maintain stronger connections with your audience. With its automation capabilities, Salesforce manages your data sets to recommend action items for the sales team and performs automatic follow-up duties. This suits businesses that want to gather customer data while streamlining business operations and enhancing team-related interactions.

Mixpanel

Mixpanel understands your digital customer behavior like never before. It tracks every move your customers make on apps or websites. The platform goes above data collection to show how customer interacts with your products while highlighting their pain points in the process. Marketers and product managers benefit from this tool as it enhances customer experiences while increasing engagement.

How Contentstack empowers businesses with customer data analytics

Can you deliver personalized content without knowing what your customers like? But with so much data coming from multiple sources, making sense of it is challenging. That’s where Contentstack comes in. It integrates with various data analytics tools to help you leverage the full potential of customer data. 

Precise segmentation

One-size-fits-all campaigns no longer deliver the desired results. Contentstack makes it easy to segment your audience into specific groups. Whether you’re segmenting by demographics, behavior or purchasing patterns, you can deliver the right message to the right people.

Take a subscription-based business, for example. Contentstack allows users to divide their customer base into categories consisting of “new subscribers,” “at-risk churn” and “long-term loyalists.” Users in each segment can receive messages made specifically to match their needs. You can send new user onboard assistance and exclusive offers for loyal customers.

Integrates with Lytics for advanced analytics

The unique feature of Contentstack lies in its partnership with Lytics, which operates as a real-time Customer Data Platform (CDP). The advanced features of Lytics, like dynamic segmentation, real-time identity solutions and machine learning, set it apart from others. A travel company can use Contentstack to deliver highly tailored recommendations. Through Lytics, users can monitor customer interactions in real-time to modify offers automatically. An abandoned flight search for Hawaii allows you to immediately provide reduced package deals that benefit customers and increase sales potential.

Drives measurable ROI

Every interaction with your brand is an opportunity to delight your audience, but timing and relevance are crucial. Contentstack ensures that each touchpoint is optimized. 

An e-commerce business can use Contentstack to generate individualized product promos specifically for each customer based on their order history. Customers who leave products in their cart will receive a message and a unique discount to encourage purchase. This increases your return on investment.

Unifies data for a complete customer view

Contentstack functions as a central repository that collects data from various departments. All website behavioral, purchase and email engagement data reside on the platform and present a well-rounded customer profile. For example, Contentstack stores purchase data of offline and online customers in a single source. The method reduces the time needed to develop strategies that specifically address individual requirements.

Optimizes customer touchpoints

Every interaction your brand establishes provides an opportunity to please customers, yet reaching customers with the right content at the right time remains fundamental. Contentstack optimizes all interactions, from websites to mobile alerts and follow-up messages.

Through its headless platform, e-commerce companies can recommend products that align with customers' browsing behavior. A customer gets an instant shopping cart alert coupled with exclusive savings after they abandon their cart, increasing purchase opportunities. Companies can maximize these interactions to build long-term relationships.

FAQs

What is the meaning of customer data analytics?

Customer data analytics is the process of gathering and analyzing customer information to make data-backed decisions about the content to share and products to recommend.

What are the 4 types of customer data?

The four types include demographic data (age, location), behavioral data (purchase history), interactional data (customer service calls) and transactional data (payments).

What is consumer data analysis?

Consumer data analysis focuses on identifying trends and behaviors among customers to improve marketing strategies and customer satisfaction.

Learn more

Getting into customer analytics is pretty easy because it’s all about understanding customer behavior to make smarter business decisions. With no dearth of customer data as every click, view and interaction adds to the pile, turning this data into actionable and meaningful insights gets your business going. That’s why companies prefer to use Contentstack’s Lytics. It quickly uncovers hidden trends and correlations in your data to make informed decisions about where to focus your efforts and convert prospects into happy paying customers. Talk to us to know how Contenstack can change your customer analytics game.