Marketing to today’s digitally connected consumer means that brands need to be relevant and accessible to customers at the right time and through the right channels. This means that the ability to profile your best customers and to personalize messaging and offers at scale are more important than ever in acquiring and keeping customers.
Data plays a key role in driving marketing success in this digital age. Marketers today understand the value of tracking metrics to demonstrate ROI, to use analytics in digital advertising, etc. Another growing area is the use of Customer Analytics --- sifting through huge volumes of data such as customer demographics, transactional data and sources like social media and customer feedback to identify behavioural patterns and trends – in order to take Marketing ROI to the next level.
The recent CMO Survey conducted by Duke University’s Fuqua School of Business and sponsored by Deloitte LLP and the American Marketing Association reports that the percentage of marketing budgets companies plan to allocate to analytics over the next three years will increase from 5.8% to 17.3%—a whopping 198% increase.
Here are 3 reasons why you too should invest in Customer Analytics:
1.You can identify your most profitable segments and channels.
There was a time that targeting was so simple: Beer drinkers were male, aged 18 and above. Diapers and milk were purchased by mothers. Video games were for teenage boys and dolls were for little girls.
These days, as consumer individuality takes center stage, marketing becomes a lot more challenging. The questions that marketers need to answer include: Who among my customers are the most valuable over time? What are the best ways to acquire these kinds of customers? How can I improve my sales from existing customers?
Understanding Customer Lifetime Value (CLV) is an effective way of profiling your best (and worst) customers. CLV represents the total net profit your company makes from a customer. This means looking not just at customer purchases and the margins you get from each transaction but also the cost of acquiring or retaining a customer. The higher the CLV, the more resources you can put into acquiring those customers because you know they will generate the highest returns.
CLV provides you with information on who your premium customers are, what kind of content or incentives appeal to them, which channels they usually use when interacting or transacting with you, and so on. It is valuable in fine-tuning market segmentation and provides the data to support marketing budgets and plans.
2. It lets you personalize messaging or offers at scale
Every customer wants to be treated as if the brand knows and understands them personally. If you’re a teenaged girl with a full head of hair you wouldn’t want to receive an ad for balding men, and if you’re a tall lady you don’t want to receive sale notifications for petite clothing. Making sure the right message reaches the right person entails using their customer profile information and applying the right personalization and automation tools.
One of the best tools that help marketers personalize offers at scale are recommendation engines that provide suggestions on what you should buy next, typically used by large online retailers like Amazon or media providers like Netflix or your favorite online magazine. Recommendation engines are an application of customer analytics that match a customer’s preferences with the behaviour of similar individuals, in order to present the customer with an offer that would have a higher likelihood of being availed vs a generic one-size-fits-all offer.
3. It helps you prevent your customers from leaving.
It’s always been said and proven that keeping a customer costs less than acquiring a new one. However today’s consumers are fickle and spoiled for choice, so it’s easy for them to shift brand loyalties as soon as a more attractive offer comes their way. By identifying patterns of behaviour associated with churn, churn analytics identifies customers who are about to leave so that marketers can intervene with programs or offers to keep them or even increase their spend with you.
The rewards for investing in customer analytics are clear and quantifiable. A data-driven and inspired organization can reap substantial benefits in marketing that can improve the company’s profitability.
Just Analytics offers customer analytics services as well as solutions for Customer Lifetime Value, recommendation engines and churn prediction. Contact us to schedule a meeting.