Customer analytics: Why and how to track them

Forty-four percent of teams use analytics to acquire new customers because it allows them to target their audience better.

This makes customer analytics essential when creating marketing campaigns.

In this post, we’ll go over everything you need to know about customer analytics: what it is, its key benefits, and more.

What is customer analytics?

Customer analytics is the process of using customer data to make critical business decisions. You aren’t targeting your audience based on assumptions and theories. You’re using real-world data from existing customers to optimize marketing campaigns.

This is essential for your business’s survival because, according to a McKinsey report, companies that use customer data to make decisions double their profits compared to companies that don’t.

A good customer data platform, or CDP, like Lytics gives you critical insight by gathering and organizing data, so you don’t have to do it yourself. This results in:

• Increased customer retention
• Streamlined mobile adaption
• More engaged users
• More in-app purchases

Now that we know customer analytics’ importance, let’s look at its benefits.

Why is customer analytics important?

Customer analytics is essential because:

• It boosts marketing conversions
• It helps you improve the customer experience
• It increases sales and profit

It boosts marketing conversions

Customer analytics gives you insight into how much money you’re spending on marketing, where you’re spending it, and if it’s worth it.

Let’s say you find your email marketing campaign isn’t bringing in the results you’re looking for. You could run split tests and find what works and what doesn’t, segmenting your audience and targeting different pain points for each to see what converts better.

After a few rounds of split testing and using customer data to make decisions, you’ll find your marketing conversions increase. This is because you’re appealing to the correct pain points.

It helps you improve the customer experience

Customer acquisition is expensive, and if your customer retention rate is low, you’ll need to constantly find new customers. This takes a toll on your business and can leave money on the table.

But when you understand your customer, you develop your product or service around their needs, improving the customer experience and retention rate.

It increases sales and profit

When using customer analytics, the main goal you’re looking to achieve is increased sales and profit. Luckily, optimizing your marketing campaigns and developing your product around customer needs gives you the perfect platform for increased sales and profit.

You can even see which customers are more profitable with customer analytics. For example, if a group of customers mainly buys when you’re offering an email marketing sale, you could consider running more specials for this segment.

Now let’s learn all about tracking customer analytics.

How to track customer analytics

Tracking customer data has evolved. At first, you could get away with the essentials like names, email addresses, and phone numbers. 

These days, you need to know your customer better than they know themselves. This involves splitting your audience into multiple segments and running different campaigns for each segment to optimize results.

But implementing customer analytics into your business is simple, and you can do it in three steps:

1. Collect customer data
2. Organize your data
3. Make business decisions using the data

1. Collect customer data

First, you’ll need to collect and store customer data. Many companies prefer buying third-party data because they don’t have to do much heavy lifting. But this is inefficient and expensive, and the data might not even be relevant to your audience. 

Not to worry: Collecting accurate data isn’t difficult. 

Here are some easy ways to collect customer data—you’re probably implementing some of these strategies already:

• Running surveys, promotions, and specials
• Looking through transactional records
• Web tracking
• Conducting user research 

Once you’ve gathered data from your target audience, it’s time to organize it.

2. Organize your data

You’ll need to organize your data in a way that’s accessible. It’s no use collecting data if it’s difficult to find. This is where a customer data platform like Lytics can help.

With Lytics, collecting and organizing customer data is easy, and it’ll connect data across multiple platforms to create a 360-degree customer profile. This allows you to make better business decisions. You no longer have to worry about data silos and hard-to-find knowledge.

3. Make business decisions using the data

Now comes the fun part. Because all your customer data is under one digital roof and accessible to everyone on your team, it’s time to use it to make decisions.

As an example, your marketing team can start looking at where they’re spending money, which channels are working best, and how to improve.

Or, your product development team can begin to understand customers better and design your product around the customers’ needs. This level of customer understanding will set you apart from the competition.

Customer analytics made simple with Lytics

Customer analytics is essential because it allows you to optimize marketing and product development.

But manually gathering and organizing customer data is tiresome. This is where a CDP like Lytics can help. It streamlines your data-gathering and storing process so you can focus on tasks that matter, like making better business decisions. 

So if you want to take your customer understanding to the next level, sign up for a free Lytics trial.