The Importance of Customer Analytics in a Product-Based Business
- Aug 6, 2020
- 3 min read
Written by: Maria-Paz Hornisch, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
I worked in customer analytics in both finance and e-commerce companies for twelve years, so I can tell you a thing or two about the benefits and importance of analyzing customer data. If you have an online shop with different product categories and are trying to increase your sales, avoid trying to do what most online shops do (and even some big ones!): selling everything to everyone.
There is so much pressure, especially in these times, to offer all the products to all the customers for equal, sending millions of discount codes to all newsletter subscribers or website visitors, trying to increase sales, while NOT listening to your customers' needs or behavior in your shop.
I've seen so many online shops not having a consistent and smart strategy, and that has led them to very bad results.
Customer analytics are crucial to a company. A business needs to know their customers in order to understand what to offer them. If you sell everything to everyone and/or offer too much discount or too many voucher codes constantly, then in the long term you’ll end up exhausted feeling that no strategy works and with a brand that might lose its value.
Instead of selling everything to everyone, I recommend you try this instead:
1. Study your customers' behavior: you can learn a lot from customers' past purchases or visits to other products in your shop. For example, take a look on what they have in their shopping cart and haven't purchased yet, how many days they have had those products on the shopping cart, what kind of products they have in their wishlist, which categories they browse or buy the most, how did they arrive to your online shop or product page, etc. As you can see, many analyses can be done, and each of them will lead you to an insight that will provide a lot of information to be used in your strategy.
2. See which of your customers are seasonal buyers (only buying on Christmas or special dates) and separate them from your regular offers. When you start analyzing your customers’ data, you might find people who buy in your shop a couple of times a year and always around the same dates. These are called Seasonal Buyers, and when you start finding them, you’ll find the most interesting trends. Some of them buy on certain holidays (Christmas, Easter, Black Friday, etc) while others buy due to a special discount or offer launched by the shop at a certain time of the year. If you find your seasonal buyers, get them aside from your regular customers and target them in the way it works for them the most. There might be customers who react better to Black Friday offers rather than discounts on a random day of the year.
3. Check when was the last time your clients purchased, and focus on those who haven't purchased in a more extended period of time (e.g., 3 to 6 months): if they are not seasonal buyers, there might be a chance you can still get them to buy again from you, by sending them product recommendations, new products in store, price drops on products or categories they have visited in the past, or discounts. If more than nine months have passed from their last purchase, then other strategies should be implemented.
4. Segment your clients: to improve the effectiveness of your campaigns. It’s mandatory to segment your clients. Campaigns should be directed to customers who are most likely to respond to it. For example, suppose you have a pet shop, and you have identified a segment of customers as “dog food buyers”. In that case, you should try a variety of up-sell campaigns (e.g., to encourage customers to buy a more premium or more expensive brand of dog food or dog treats) and cross-sell campaigns (e.g., to encourage customers to buy from other categories, such as dog accessories or dog care products). This approach increases short term sales and long term customer loyalty.
Maria-Paz Hornisch, Executive Contributor Brainz Magazine
Maria-Paz Hornisch is the Business Coach & Digital Marketing Strategist behind The Digital Madl, dedicated to helping ambitious mompreneurs with branding and digital marketing strategies to create a rock-solid presence online and skyrocket sales. Maria-Paz is a bachelor in Business Administration and holds an MBA in Luxury Business from ISC Paris École de Commerce. For twelve years, she developed her career in Chile, France, and Germany, working for a Spanish multinational commercial bank and two German luxury and fashion e-commerce companies. Originally from Santiago de Chile, she now lives in Munich, Germany.
