In the digital world, customer-centricity, personalization, and customer experience separate the winners from the losers. it’s no coincidence that these companies thrive. Businesses who are too slow to follow the new trend of behavioral data-driven as well as customer-centric, will grow increasingly difficult to compete in any industry.
Therefore, organizations must take advantage of the behavioral data at their fingertips. Irrespective of the size of your business, you can leverage the power of behavioral customer data and analytics. You don’t need to be an Internet giant.
So why is customer behavior data so important today for all businesses?
Demographic and firmographic traits such as age, gender, income, ethnicity, occupation, industry, company size, geographic location etc, was the back bone of company success. Primarily, companies could get away with segmenting customers. In other words, focusing exclusively on the who.
Of course, there’s no arguing the importance of understanding who your customers are. Today, developing customer personas and ideal customer profiles are undoubtedly vital practices for understanding your target customers and for effective customer journey mapping. In the digital age however, just understanding “who” your customers are doesn’t cut it.
When you think about Amazon and Google customer experience, the first thing that probably comes to mind is their prolific use of personal recommendations. Focusing only on demographic or qualitative characteristics however, can’t make assumptions on individual customers’ interests, needs, wants or values. Neither can you based purely upon who they are, or any “persona” you’ve assigned to them.
Instead, companies like Amazon and Google know that the key to understanding their customers can lie more in what they do; that quantitative insights revealed through their behaviors can paint a much more accurate picture of what their customers want and need, and how and when to best deliver it to them.
So how do you use customer behavior data to deliver personalized customer experiences?
As stated earlier, Amazon and Google, are fueled almost entirely by customer behavior data. And this is made possible by their advanced recommendation engine algorithms designed to serve customers dynamically personalized content and product suggestions based upon each customer’s past behavior.
So why is customer behavior data so important today for all businesses?
Demographic and firmographic traits such as age, gender, income, ethnicity, occupation, industry, company size, geographic location etc, was the back bone of company success. Primarily, companies could get away with segmenting customers. In other words, focusing exclusively on the who.
Of course, there’s no arguing the importance of understanding who your customers are. Today, developing customer personas and ideal customer profiles are undoubtedly vital practices for understanding your target customers and for effective customer journey mapping. In the digital age however, just understanding “who” your customers are doesn’t cut it.
When you think about Amazon and Google customer experience, the first thing that probably comes to mind is their prolific use of personal recommendations. Focusing only on demographic or qualitative characteristics however, can’t make assumptions on individual customers’ interests, needs, wants or values. Neither can you based purely upon who they are, or any “persona” you’ve assigned to them.
Instead, companies like Amazon and Google know that the key to understanding their customers can lie more in what they do; that quantitative insights revealed through their behaviors can paint a much more accurate picture of what their customers want and need, and how and when to best deliver it to them.
So how do you use customer behavior data to deliver personalized customer experiences?
As stated earlier, Amazon and Google, are fueled almost entirely by customer behavior data. And this is made possible by their advanced recommendation engine algorithms designed to serve customers dynamically personalized content and product suggestions based upon each customer’s past behavior.
Here Are A Couple Quick Stats To Get An Idea
35% of Amazon’s sales are generated through their recommendation engine. Personalization is one of the many incredibly profitable example for how these digital age titans are using behavioral customer data and analytics. Together with modern analytics approaches such as personalization, detailed customer analytics could also be leveraged to solve problems and impact KPIs.
In order to you know which offers to show which customers and when, your could pull the following customer data:
When it comes to up-sell and cross-sell, few companies do this better than Amazon.
“Customers Who Bought ________ Also Bought ________”
Amazon’s recommendation algorithm for instance, uses customer behavior data for it’s product suggestions. But, depending on your business, there are many different possible behavioral data points and sources that can be leveraged for this. Most of these are probably already hiding in isolated corners of your existing technology stack.
Customer satisfaction is another critical factor to take into consideration, when building behavioral customer segments for cross-sell, up-sell and repeat purchase opportunities.
- User’s purchase history
- Items in their shopping cart
- Items they’ve rated and liked
- What other customers have viewed and purchased
When it comes to up-sell and cross-sell, few companies do this better than Amazon.
“Customers Who Bought ________ Also Bought ________”
Amazon’s recommendation algorithm for instance, uses customer behavior data for it’s product suggestions. But, depending on your business, there are many different possible behavioral data points and sources that can be leveraged for this. Most of these are probably already hiding in isolated corners of your existing technology stack.
Customer satisfaction is another critical factor to take into consideration, when building behavioral customer segments for cross-sell, up-sell and repeat purchase opportunities.
If a customer recently had negative experiences with your organization or hasn’t been getting enough value from the products they’ve already purchased, this probably wouldn’t be an ideal time to reach out with a cross-sell or up-sell offer. Extending an offer at this point in time can actually do even more damage.
Such a customer must be segmented as a low-satisfaction customer. This way, they can be targeted with other retention-focused initiatives to win back their favor and increase their satisfaction. Their negative emotions can temporarily be suppressed by receiving certain promotional offers.
Such a customer must be segmented as a low-satisfaction customer. This way, they can be targeted with other retention-focused initiatives to win back their favor and increase their satisfaction. Their negative emotions can temporarily be suppressed by receiving certain promotional offers.
If those retention initiatives are successful, the customer might re-qualify for a cross-sell offer, at a much more opportune moment. It is indeed true that the most successful enterprises now and in the future will be those that best utilize insights that encompass each customer’s entire experience with their organization.
Customer behavior has and will continue to be a valuable information. If you’re smart enough to pay close attention by capturing, analyzing and acting on customer behavior data, your business with thrive.
Benefits Of Driving Business Impact With Customer Behavior Data & Analytics
- Lower cost of customer acquisition
- Increase conversion rates
- Increase velocity to purchase
- Increase purchase sizes
- Improve marketing ROI
- Customer Retention and Growth
- Improve retention/lower churn
- Increase repeat purchases
- Increase cross-sell, up-sell
- Improve customer satisfaction and loyalty
- Increase lifetime value
To understand why behavioral data is such an effective asset for lowing customer acquisition, it makes sense to first take a quick look at some of the top challenges marketers face today. In 2017, Salesforce’s State of Marketing Report found that 67% percent of marketing leaders say creating a connected customer journey across all touchpoints and channels is critical to the success of their overall marketing strategy.
The path to purchase typically involves many different touchpoints across multiple channels, over an extended period of time that can often span weeks, months or in some cases even years.
This complex, multi-channel, multi-touchpoint, time-spanning journey is also driven entirely by the individual customer, whose motivations, goals, values and requirements can differ completely from those of the customer to their right and to their left traveling along the same path – all of whom demand personalization.
A couple statistics from the same report underscore the extent of customers’ demand for personalization:
52% of consumers are likely to switch brands if a company doesn’t personalize communications.
65% of business buyers are likely to switch brands if a vendor doesn’t personalize communications to their company.
Many businesses are turning to journey-driven approaches like journey analytics and customer journey orchestration because it was specifically designed to solve these exact problems, unlike traditional methods and tools.
Armed with these valuable insights, you can leverage journey orchestration software to optimize personalization decisions across touchpoints. These solutions help you ensure that every offer or message reflects every prospect’s or customer’s overall experience with your organization, is relevant to their current journey and helps them achieve their next goal.
A couple statistics from the same report underscore the extent of customers’ demand for personalization:
52% of consumers are likely to switch brands if a company doesn’t personalize communications.
65% of business buyers are likely to switch brands if a vendor doesn’t personalize communications to their company.
Many businesses are turning to journey-driven approaches like journey analytics and customer journey orchestration because it was specifically designed to solve these exact problems, unlike traditional methods and tools.
Armed with these valuable insights, you can leverage journey orchestration software to optimize personalization decisions across touchpoints. These solutions help you ensure that every offer or message reflects every prospect’s or customer’s overall experience with your organization, is relevant to their current journey and helps them achieve their next goal.
