CUSTOMER ANALYTICS: Everything You Need to Know

What is Customer Analytics?

Customer analytics is a technique used by businesses to understand customers’ behavior. Building a strong analytics will give the businesses an insight on how to form a better strategy.

There are three stages to how to create successful customer analytics. Once you have collected customer data, you can start using it to create better marketing plans. Customer analytics tools are apps that help businesses improve the customer experience.


These are the three stages of creating effective customer analytics.

1. Collections of Customer’s data

There are many ways to collect customer data aside from asking it straight to the customer.

First, you can collect customers’ data from different sources such as demographics, sales history and web activity. Next is by using customer analytics tools such as Google Analytics, HubSpot, Mailchimp, Salesforce, etc. You can also use web scraping, in which it will allow you to get data from the e-commerce platforms. Having raw customer data can help you understand your customers’ buying habits.

2. Organization and Restoration

Organizational skills are vital in business since they can either make or break the business by mixing up customer data, which can lead to inaccurate customer profiling. With the help of a customer analytics tool, it can help people find information and products faster and perform tasks more efficiently, which leads to increased productivity. Unorganized data can lead to inaccurate customer profiling.

3. Interpretation of Collected data

It is a process of interpreting the collected customer data that will give you a better understanding of customer behaviors and purchase decisions. The results of the collected customer data can be used to create marketing decisions to better meet the customer’s needs and will indicate what products and services work best together for different customers.

In fact, according to McKinsey, companies making intensive use of customer analytics are 2.6 times more likely to have significantly higher ROI and three times as likely to generate above-average revenue growth than other competitors.

(Key feature of most customer analytics platforms based on


Knowing your customers’ habits and understanding your customers’ needs allows you to make better marketing decisions based on statistical facts, which can help your business in a variety of ways.

  • Higher Customer Satisfaction and Retention

Customer Analytics will help your business grow and expand by making your customers satisfied with the products and services your company offers, which will help you turn your customers into repeat buyers. There are many ways to know how satisfied your customers are with your services, it can be via CSAT surveys, feedback requests, web and social media comments, etc.

  • Lower Acquisition Cost

Customer Acquisition is expensive, so it is very vital to understand what makes every customer leave. Having powerful customer analytics will help you identify the common denominators among the customers who have left. On the other hand, it will give you the chance to improve your business strategies and figure out how certain products and services satisfy customers’ needs.

  • Increase Sales and Revenue

Tracking your customers’ shopping habits is the key to increasing sales and getting higher revenue. By analyzing your existing customers and finding out what they have in common, you can create better marketing strategies that will lead to increased sales and revenue.

  • Increase User/Customer Engagement#

In any business, customer engagement is very important. It will not only boost your brand experience but will also increase customer loyalty and build trust. Having a powerful customer analytics tool will help you capture the existing customers’ attention and make sure that they have the best experience possible.

These advantages have become attainable as a result of customer analysis tools that unfold exactly what you need to do to meet each revenue and growth goal, and consumers are more informed and selective than ever before.


1. Descriptive Analytics

An organization can use descriptive analytics to better understand the changes that have occurred in its operations based on current and historical data. A company report is one of the common examples of descriptive analytics, with the use of previous inventories, workflow, sales, and revenue, you can identify the historical review of the business operations and this will help you understand what has to be done to make the service better.

2. Diagnostic Analytics

We can use diagnostic analytics to determine what caused an occurrence. Once the trend has been identified, diagnostic analytics can be used to determine why the trend occurred. Data mining, algorithms, probability theory, statistical analysis, and filtering are the common approaches and tools used in Diagnostic Analytics.

3. Predictive Analytics

Companies use predictive analytics to identify risks and opportunities in customer data. Essentially, it is a branch of advanced analytics that makes predictions about future outcomes based on descriptive and diagnostic analytics results.

4. Prescriptive Analytics

Prescriptive analytics produces recommendations for the next steps by taking into account all relevant factors based on the results of all analytics methods. TikTok’s “For You” feed is the most common example of prescriptive analytics on social media, as the company’s website explains that a user’s interactions on the app are weighted based on the user’s interests.

(4 Types of Data Analytics Every Analyst Should Know)

The goal of customer analytics is to help you and those business owners in analyzing customer interactions in order to make better sales and marketing decisions.

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