How to Lead With Customer Behavior Analytics

Whether customers are browsing in store or purchasing online, it's important to understand their expectations and what influences them to purchase products. Customer behavior analytics is a great tool that gives insight into buying patterns, frequency rate and interactions across channels.

According to the Salesforce Connected Customer Report, 80% of customers now consider the experience a company provides to be as important as its products and services. So in addition to understanding digital media trends and buyer personas, it's also vital to serve the best experience that retains customers.

The power of customer behavior analytics

Today almost everyone has had an experience with behavioral science technology. Companies like Amazon and Netflix analyze vast amounts of customer data to serve recommendations to every user.

In doing so, they're able to promote and serve more accurate and relevant product recommendations based on sophisticated algorithms and data that help them understand each user's unique preferences, browsing patterns, purchase history and more. This strategy also helps companies make educated guesses on what customers will buy in the future.

Behavior analytics let online or e-commerce businesses make contact with the customer on each step of their journey, from the awareness stage, to the consideration stage and the final purchasing stage.

How customer behavior analytics work

There are many ways you can use online behavior analytics tools to grow your business and drive customer acquisition, retention and growth. Here's what you should consider.

Personalize your marketing strategy

Understanding your customer's past behavior can help you personalize the customer experience, increase loyalty and improve retention. Customer behavior analytics data allows you to segment your market into specific subgroups based on demographics such as age, location, family size and household income. Additionally, metrics such as purchase value and frequency rate can help predict future products customers may be interested in based on their past purchases.

With this knowledge, online businesses can better target their customers with personalized marketing and suggestions. For example, if the customer has made it to the decision stage, such as adding an item to their cart, a behavior analytics tool can make other suggestions based on similar products.

Improve customer retention

Metrics like customer lifetime value, average purchase value and frequency rate can also help identify your best customers. Brand-loyal customers usually have a history or recurring trends in their buying behavior, which can help you promote products that fit their needs.

Modify your campaigns based on customer behavior data and provide a way for your customers to give feedback. The more receptive you are to feedback, the more you'll build trust and give a great experience to your most valued customers.

Identify upselling opportunities

Not every business can offer price adjustments based on a product's increase or decrease in demand. But if you can, it's one way to leverage behavioral data to build customer satisfaction, particularly in the consideration stage of the customer journey.

Amazon offers targeted discounts and promotions to specific customers by analyzing data on past purchases, browsing patterns and responses to discounts. Even at a smaller scale, you could set and track measurable goals based on your customer behavior analytics and feedback to implement opportunities your customers will value and benefit from.

Increase revenue

Using customer data to predict sales and revenue is a huge benefit of consumer behavior analytics. Making evidence-based estimates of sales based on past and current sales reports means more accurate budgeting, reduced costs and improved ROI for an online business.

Targeting relevant marketing campaigns can help increase conversion rates and bring a valuable return to your business. These business initiatives are also a great way to generate profits. The main goal of a great experience is to satisfy your customers while keeping a healthy bottom line.

Choose the right analytics tools

While knowledge is power, it isn't always affordable. Many customer behavior analytics tools may require a significant investment upfront, but the return on investment could be worth it if your business can benefit from the technology. Here's a few options to consider.

HubSpot

One of the most popular names in analytics, HubSpot offers a wealth of reporting options and insights on customer demographics and engagement activity. The company offers a free starter plan to help you get familiar with its product.

Mixpanel

Mixpanel is an all-in-one option that includes marketing automation and CRM capabilities. It also offers a variety of notification features, including email, SMS and push notifications. They offer a free starter plan as well.

Hotjar

Hotjar uses heatmaps, surveys and session recordings to illustrate how people interact with your website, uncovering the why behind page traffic and drop-off rates. It's easy to install—just add a single snippet to your website or app.

However, it doesn't have all the event-specific customization found in HubSpot and Mixpanel. While there's a free plan available with limited functionality, its Pro Business Plan rates depend on the volume of daily page views.

The bottom line

Investment in customer behavior analytics may help drive significant returns for your business. When you target personalized strategies to customers, you're investing in your brand by identifying what your customers need.

Internally discuss the best strategy for investing in one of these solutions and whether it could benefit your company. If employees have had personal experience with customer behavior analytics tools, you may benefit from their insights prior to investing in a new tool.