Are you considering entering a new market? Trying to decide if you should open a brick-and-mortar store? Want to know if it makes sense to enhance or sunset an existing product? You may want to use customer behavior analysis insights to inform your decision.
Before you make a major business decision there are usually a few questions you want to answer. For example, why are we doing this? Can we afford it? Who's going to work on it? How long will it take? If we build it, will they come?
You can usually find the answers to your budget, resources and timing questions in a report or by consulting your team.
But customer behavior-related questions like "If we build it, will they come?" can sometimes be harder to address—at least they can be.
Today businesses of all shapes and sizes are using insights gathered from customer behavior analysis to make more informed business decisions. If your business is not already using customer behavior insights in its decision-making process, now may be a good time to start.
What Is Customer Behavior Analysis?
Customer behavior analysis is the process of examining customer behavior over a period of time and then using the knowledge gleaned from that analysis to predict how your customers (or customers with similar traits) will behave in the future.
The process can be as simple or in-depth as your budget allows. There are a variety of tools and resources available to help you through the process. For example, there's out-of-the-box systems (customer relationship management, email, point of sale, etc.), reports, consultants and analytics solutions.
Making Better-Informed Decisions With Customer Behavior Analysis
How can customer behavior analysis help you make better business decisions? Let me count the ways. It can help you:
1. Identify new sales opportunities.
Is there a particular topic or issue that your customers gravitate toward? If so, you may have just found a new sales opportunity.
By analyzing how your customers are responding to a topic, a product sample, a questionnaire or a campaign, you may be able to identify new products to create or sales channels to explore.
For example, after reviewing their email open and click rates, a law firm may find their clients are showing an interest in trademarks. They can then use that information to kick off a marketing campaign that highlights their trademark services, or create a trademark package.
2. Get in front of red flags.
Red flags or business risks are another insight that can come from a customer behavior analysis. During an evaluation you may find that your customers are leaving or gravitating toward a particular trend that your business is not in a position to support.
Let's say you have a brick-and-mortar business. During a customer behavior analysis you find your customers are doing more of their shopping online. That may be a good indicator that your business is at risk.
If you catch this trend early enough, you may have the opportunity to make some key business decisions—such as moving your business online, creating an online presence or reevaluating how you operate your store—before the shift has a big impact or a competitor takes your market share.
3. Prioritize projects.
Do you have a list of projects that you're considering and need to decide which to focus on? You can use the findings of your customer behavior analysis to help you prioritize.
It can be a bug that's leading to an increased number of customer support calls or you may need to determine if it's time to enhance a legacy system or build something new. Either way, knowing your customers pain points, where they are dropping off and where they find value can help you make a well-informed business call.
4. Determine customer lifetime value.
Customers are going to be with you for a reason, a season or a lifetime. When you know which customer is which, you can meet them halfway.
With a customer behavior analysis, you can segment your customers and then create marketing campaigns, sales efforts and support services that help you get the most value out of them. You can also use these same segments to attract and retain people who meet the profile of your most valuable, and loyal, customers.
5. Connect and engage with more customers.
Marketing and sales teams often love customer behavior analysis reports because the insights can help with creating targeted campaigns that connect with existing and potential customers.
It could be a customized campaign that speaks to the needs of families with autism or a culturally diverse advertising campaign designed for a specific demographic. A customer behavior analysis can help provide your team with the data they need to create meaningful connections with existing and potential customers.
Read more articles on customer research.
