Customer Data Analytics is the process of analyzing the customer data by a business to create a profile about the customer. With that profile, a business can predict user behavior and can target personalized services for them.
The business has long understood the value of customer data. By creating a personalized experience with the customer data, they can increase their loyalty with the customer and thereby increase their revenue.
Businesses use various analytic techniques to analyze customer data from descriptive to prescriptive. Each analytic gives different information about the customer. Descriptive analytics is done to get the overall information about the customer. Predictive and Prescriptive analytics is done to find the customers future decisions.
How does Business get customer data to analyze?
There are various ways in which a business collect data about their consumer. The first and the most fruitful way is,
They simply ask for your data
Whenever you buy a product or service from a business. The company directly or indirectly asks permission to collect your information. When you sign up for a new service, through your Facebook or Gmail profile, you give your information to the service provider. When you accept the terms and conditions, you agree to provide your information. These are the direct ways of accessing your data.
Some companies may also illegally procure your data without your consent. They use tracking software to collect information without your consent. It is illegal as it invades your privacy. User privacy is a huge issue that the tech world is dealing with right now.
Procuring you data from data companies
This is probably the easiest way for a company to get your data. There are companies whose only job is to collect and sell consumer data. These companies are called data companies. Google and Facebook are good examples of this. They give out free services and in turn, they collect your data. These data are used by them to target ads and are sold to other companies for a price.
I said this is easy cause the data companies collect and process your data to a structured form. They eliminate outliers and noisy data to store it in a structure that is easy to analyze. For a business that needs customer data, it is easy to procure it from these data companies for a price.
The other important ways of acquiring customer information are e-mail tracking, web crawling, and from companies own records.
What type of customer data do companies use?
There are many customer data available. To choose the right kind of data for the analytic process is vital to get valuable information.
Customer data from their words,
These are the data about the impression of a product or service by the consumer. The consumer usually posts this information on the social media, forms, and blog posts. This information gives the business the idea of the customer’s reaction to their product. The business can improve its product or service by using this type of data.
Data from the website,
These data are procured from the customer’s interaction on their website. Data like time spent on a page, link clicks, etc are acquired from this type. It gives the company an idea about how engaging their services are and where to improve. It also gives an idea of what interests the consumer. Major e-commerce sites are using this data to identify user behavior and recommend products.
Data from a transaction,
This type of data is particularly useful for retail companies. For every transaction, the customer makes buying goods/services from a company, it increases the understanding of the consumer by the company. By better understanding, a company can better recommend products/services to the customers.
How a company implements consumer analytics?
Major tech companies have their own analytics team for analyzing consumer data. This trend is also followed in major companies in all the domains. They have the resources and knowledge to create their own team of analysts to perform consumer analytics.
Small to Medium companies that don’t have the knowledge or resources outsource the analytics process to other analytics companies. Sigma data systems, Diceus, LatentView Analytics are some of the major analytic companies.
Nowadays, tools and Softwares are available for companies to make the analytics task easier. The analytic tools are now integrated with the CRM tools. Salesforce CRM and ZOHO CRM are good examples of this type.
Consumer data is becoming more and more valuable for a company. It lets the company know about their customer and interact with them. By understanding, the companies can in turn increase customer retention, & customer conversion, improve sales, and increase brand loyalty. So, in today’s world, analyzing customer data is a must for a business in order to stay above the competition.