Customer analytics 101: How to make the most of your data

Companies are increasingly prioritizing the collection of customer data. According to the Zendesk Customer Experience Trends Report, business leaders increased their investment in customer data management by a whopping 92 percent amid the COVID-19 crisis.

But capturing customer data alone isn’t enough. The information you gather must be relevant. You also need to interpret that data to form insights and take action.

This is where customer analytics comes into play.

Businesses use customer analytics (or consumer analytics) to identify and understand what makes customers tick. Data analysis helps you discover how consumers use your product or service to solve problems; it also reveals the roadblocks they face on the customer journey.

Leverage consumer analytics to anticipate customer needs, and you and your team will be set to provide proactive support and a seamless brand experience.

What is customer analytics?

Customer analytics is the process of gathering and analyzing consumer data to gain meaningful, relevant insights into buying behaviors and preferences.

Companies can collect customer data from a number of touchpoints, including websites, apps, social media, and surveys. From there, team members can analyze the data and compile a report—either manually or with customer analytics software.

These insights give businesses a better understanding of their audience and enable them to develop better products or services. They also help businesses determine the optimal pricing structure, target the right customers with marketing campaigns, increase revenue, and improve the overall customer experience.

There are four types of customer analytics:

Why consumer analytics is important

Consumer analytics provides full visibility into customer behavior. You can learn how people discover and use your products or services and how they interact with your support team.

By tracking and analyzing CX metrics like Net Promoter Score® (NPS) and CSAT score, you can see where you’re excelling and where you need to improve. Qualitative customer data, such as social media comments or responses to open-ended survey questions, can point to specific reasons why customers are satisfied or dissatisfied.

By tracking and analyzing CX metrics…you can see where you’re excelling and where you need to improve.

These critical insights allow businesses to make the changes needed to achieve customer happiness, increase customer loyalty, and reduce churn.

Imagine a retail company sees customers are searching for a particular product that’s out of stock. The retailer can work to quickly restock the product so they don’t lose customers to their competitors. Or, say a support manager notices customers are complaining about long wait times. They can add more self-service options or hire more staff to resolve that issue.

In both cases, customer analytics can be used to expose gaps in the customer experience. The marketing platform Mailchimp, for instance, uses consumer data analytics to understand trends in their support tickets. By listening to customers and looking at the big picture, the Mailchimp team knows just the right features to roll out to boost customer satisfaction.

How customer data analytics works

The customer analytics process involves data collection, cleaning, and analysis. These three steps are time-consuming when done manually. We recommend using a customer service software solution—like Zendesk—that integrates with a customer data platform (CDP). This will make the gathering, processing, and summarizing of customer data more efficient and secure.

Capturing customer data

So, where can you find consumer data? If you use omnichannel customer service software, you already have a source of critical data. This type of software houses relevant information like customers’ names, addresses, previous support tickets, and purchase history.

You can also use your customer service software (or a CDP) to gather data from various sources—such as social media, websites, and mobile apps. The system can then create customer profiles to help you see all the key information at a glance.

When using a CDP, you’ll need to create a tracking plan: a living document that outlines the metrics you want to track, why you want to track them, and where they will be tracked. This helps to standardize the data, which makes it easier to sort and analyze. Creating a tracking plan usually requires knowledge of SQL, but Zendesk integrations like Segment don’t require you to write code.

You can also carry out customer surveys. Use CSAT or NPS surveys to collect customer feedback on product and service interactions. Be sure to add open-ended questions so you can gather qualitative data, too.

Regardless of how you choose to obtain the data, it’s important to prioritize customer transparency. Telling customers what information you’re collecting—and why—will establish trust and give them peace of mind.

Cleaning and categorizing data

The next step is organizing and cleaning the data you’ve captured. This will help ensure you make accurate assessments. The analytics tools in your data platform will clear any errors by removing irrelevant and duplicate data. Once you’ve implemented your tracking plan, the CDP will place data sets in categories in the central database.

Analyzing data

Use your platform to assess the data and identify patterns. CDPs utilize machine learning to sort through data and surface trends.

Say you want to find out what factors influence customer engagement for your streaming service. The CDP will analyze data from your app, website analytics platform, email marketing platform, and customer support tool to track specific actions that encourage subscribers to use the service. You might discover that your customized movie suggestions in emails are driving more clicks than the in-app recommendations by the algorithm.

After you’ve gathered, organized, and analyzed your data, it’s time to share the findings with the team. Use data visualization mediums like graphs, bar charts, and dashboards to show patterns, highlight trends, or tell a story.

Turn consumer analytics insights into action

Now that you understand your customers better, what’s next?

Use what you’ve learned to surpass their expectations. Do your customers want faster answers? Integrate self-service options into your support channels for on-demand support. Do your customers want a new feature or product? Communicate their suggestions and concerns to the product team. Do they prefer social messaging over email? Engage with customers on their favorite channels at the right time.

Businesses that proactively improve the customer experience will strengthen their connections with buyers and drive loyalty, profitability, and growth.