Customer analytics has changed dramatically in the past 20 years. First the internet and eCommerce, then mobile devices, and now the Internet of Things (IoT), have all combined to create more channels for customer engagement. This shift in availability, and evolving customer behaviors, has created a tidal wave of data points that marketers have to account for and analyze if they want to ensure long-term success.
What’s more, the data that’s being created isn’t the same as it has been; there’s more of it than ever before, through new channels, which means you’re interacting with customers in more places. Back before the explosion of channels, in fact, marketers had a solid handle on customer analytics because of how few points of interaction there actually were.
The channel explosion and changing customer behaviors, however, have altered the role for modern marketers. Now you have to contend with high volumes and varieties of data, coming in at a substantial velocity, a practice which is further complicated by this data residing largely in internal silos. This is where customer analytics, the topic of a recent webinar I participated on with Brandon Purcell, senior analyst, customer insights professionals at Forrester Research, comes in handy. We focused extensively on data ingestion and preparation, as well as making the most of your customer data.
When it comes to garnering the most value from customer data analytics, it’s important to remember a few key points:
- Start with a clearly defined business objective. All data sources are valuable in some way, but Purcell cautions that “analytics for the sake of analytics isn’t going to be effective.” You must determine what you want to get out of customer analytics before even beginning to think about the data. Purcell also advised picking an ROI that’s easily quantifiable so you can prove the value of customer analytics to the executive team in a way that’s easy for them to understand.
- Prepare the data before you analyze it. On average, about 80% of your time will be spent preparing data for analysis and only 20% will be spent on modeling. At RedPoint, we aim to flip this on its head and allow organizations to more effectively deliver insight based on their customer data. Regardless, data preparation is a key facet of achieving insight that can drive improved business results.
- Organize your company for analytics success. Many companies aren’t organized to maximize the value of customer analytics, especially given that so much data resides in silos. Organizations will often have either decentralized or centralized analytics functions, which don’t offer the kind of company-wide insights necessary to drive an effective strategy. Instead, Purcell recommends crafting an analytics “Center of Excellence” that functions on a shared-services model and allows for all lines of business to access customer insights.
Customer analytics effectively applied can unlock substantial long-term value. You’ll more effectively engage with the always-addressable consumer if you can determine their behaviors and analyze the data that you’re collecting. This will drive an increase in customer lifetime value through improved retention and more effective new-customer acquisition. Marketers have more data than ever to analyze, and those who can keep up will be ahead of their competitors.