Customer analytics falls into the category of business analytics where the focus is on metrics providing various insights about customers. A traditional form of operational analysis would highlighting on what happens in the interiors of your business, retail market analytics indicate which direction the marketing efforts of an organization is progressing. It gives you an idea on who are your customers and based on what parameters they make a decision.
Customer analytics improves a business in the following manner
Marketing efficiency
If you focus your marketing efforts on an individual customer, you will be aware the area money is spent and the anticipated revenue. The key is to be aware which are the marketing channels that bring in the highest amount of revenue when it comes to size of orders, retention rates. You get an idea whether to cut down on the marketing costs or explore the possibility of reach.
Customer retention
The concept of retaining customers so you need to understand why customers leave a business. Retail customer analytics helps you to outline the common denominators and provide you with an early warning that existing customers could leave the business sooner or later. So you need to take corrective action at the earliest
An increase in sales
For driving sales understanding customer purchase decisions works out to be the key. Rely on customer analytics to have an idea on the positive and negative impact on sales. It would mean lesser shipping time and the manner by which customer interactions are handled. Check out whether there is a minimum order or a bundled discount on offer with the income or location of the customer holding significance.
Higher profit margins
All the customers cannot be treated as equal. Some may cost you money whereas others could turn out to be profitable. There are numerous factors that have an impact when it comes to the popularity of customers. For example Amazon has put a life ban on customers who end up returning their items on a regular basis.
If you are not looking to take any action against a non profitable customer, then it is necessary to have an idea what attracts these customers. Then you may alter your marketing strategy based on these inputs.
Customer retention and customer loyalty
Customer retention and loyalty is split into a couple of parts. There is a need to identify individual customers, but in retail it becomes a difficult task. One of the better ways of tracking them is via discount or loyalty cards.
The moment you are aware about the customer, retention time is the average time span between the first and the last order. So as to enhance your retention rate it is necessary to understand the difference among customers between the first and the last orders.
The tracking of loyalty is easy and it can be determined by the time gap between the purchases. It is going to give you an idea whether a customer is loyal to your brand or not.
