The Benefits of Customer Analytics for Retention Marketing
As experienced marketers already know, the right customer retention marketing strategies and analytics can do wonders for your growing business. Focusing on customer retention and loyalty programs allows you to gather important information about your customers in a non-invasive manner. This information can then contribute to creating more meaningful interactions with each individual customer based on their specific sensibilities instead of adhering to a broad spectrum of impersonal marketing tactics. Essentially, you can find out what your customers are looking for, how they view your brand, and what actions you need to take to keep them coming back.
5 Types of Customer Retention Analytics
The following is a list of the five main types of customer retention analytics that you need to know about.
Descriptive analytics is the first step to helping you better understand your customers’ behavior when interacting with your business. Whether it’s tracking past purchases, complaints, inquiries, or product and service reviews, descriptive analytics uses a historical context to give you in-depth insights into how you should approach specific customer interactions and retention tactics.
This data is invaluable because it gives you exactly all of the information you need to help you create more personalized customer experiences to show your appreciation and build greater loyalty.
Predictive and descriptive analytics work in tandem to give marketers an overall idea of how certain historical patterns can impact future customer interactions. As the name suggests, this method allows marketers to accurately predict future customer behavior based on their past purchases and interactions with your business. However, it’s based on a cumulative pattern of activities such as recurring purchases, not single or standalone unrepeated events.
Using the information you’ve gleaned from descriptive and predictive analytics, you can now work toward finding feasible solutions to glaring potential problems you may have faced in the past, are currently facing, or that could arise in the future. Through trial and error, prescriptive analytics gives you the opportunity to prescribe various workable and proven remedies to help you increase your customer retention rates. Find out what tactics weren’t working in the past and learn how you can improve upon or replace them with more effective customer satisfaction and retention solutions in the future. After all, hindsight is twenty-twenty.
The purpose of diagnostic analytics is to diagnose a specific problem or event, to answer the questions of why and how something occurred. For instance, if you notice a sudden or gradual downturn in customer acquisition rates, it’s in your best interest to diagnose the problem immediately. To find out why certain trends are emerging in your business, you need to thoroughly analyze past data and understand how certain events are related to one another. This is referred to as data discovery, data mining, and data correlations.
Outcome or Consumption Analytics
Similar to diagnostic analytics, outcome or consumption analytics helps you understand why certain customers behave the way they do. Why did they choose to support your business? Why did they choose to stop supporting your business? This information can help you better understand what motivates your customers to make certain purchasing decisions and how you can personalize their experiences to drive more positive outcomes for your business.
How Does Customer Analytics Improve Your Retention Marketing Strategies?
Time and time again, it’s been proven that when customer analytics are aptly integrated into a company’s retention marketing strategies, the results are extremely positive. Customer analytics can help you build a strong foundation for your retention marketing initiatives by giving you direct and concrete insight into how your customers view your business. This not only gives you the competitive edge of getting into your customers’ heads, but it also helps you create more personalized and positive customer experiences that makes them want to continue supporting your business.
Here are a few noteworthy reasons you should give more credence to customer analytics when structuring your retention marketing strategies.
Significantly Reduce Customer Acquisition Costs
In the early stages of building your brand, one of the first things you should do is identify your target audience. Who do you think would benefit the most from your products or services? Who does your brand appeal to the most? These are important questions you need to ask yourself to build your brand identity. Customer acquisition is important (especially in the beginning stages), but it’s also extremely costly. Customer attrition, however, is even more costly. The more customers you acquire, the higher the chances are that you’re going to lose a few at some point.
The cost of replacing the customers you’ve lost can also add up fast. You’re better off concentrating on building and cultivating strong relationships with the customers you still have and giving them more and more incentives to stay with you. As the saying goes, it’s better to focus on quality over quantity.
Understanding Your Customers’ Needs
Market research and customer analytics can also help you understand the needs of your customers and the best way to deliver those needs to them. Customer satisfaction surveys are a great way to get insight into how you can better serve your customers and what changes you need to make to your business model.
More Cross-Selling and Upselling Opportunities
Historical data shows you what your customers have purchased from you in the past. Reviews give you an insight into what they thought of your products and services. With this information in your arsenal, you can make appropriate cross-selling and upselling recommendations.
Facilitates Sustainable Growth
In-depth customer analytics gives you invaluable insight into what your customers are thinking as well as what they do and don’t want from your business. By delivering on those goods, you give them greater incentive to choose you over your competitors. Recurring business facilitates sustainable growth because of its inherent reciprocity. You deliver the high-quality goods and services your customers have come to expect from your business and in turn they’ll keep coming back and even recommend you to other people they know.
Build and Measure Customer Loyalty
Customer loyalty programs require a lot of give and take. In exchange for supporting your business, you have the opportunity to show them just how much you appreciate their patronage. Offering a generic loyalty program to all of your customers is the wrong way to go. Customizing your loyalty program incentives and rewards instead shows your customers that you’re not only listening to them but that you want them to have the best experience possible with your business.
At Macromark, helping our clients build strong customer retention strategies and analyzing data is our specialty. If you need a little extra support in any of these fields, we’re here to help. Contact us today for more information.