Customer data contains a lot of useful information about user activity, customer profile, their likes & preferences, and spending behavior. If used properly, it can be a treasure house of insights & growth opportunities. Understanding how customers use your product is a crucial factor in driving the growth of your business. Here are 5 ways to grow your business faster using customer analytics:
1. Identify key problem areas
Customer data can be used to understand where and why you lose customers. Identifying and fixing one key area where you have a large drop off, can have a ripple effect and lead to major improvement of your overall conversion rate. In order to do so, you have to first find the main problem areas so you know where to focus your efforts. You can use funnel analysis to measure conversion rate each step of customer journey, identify & fix problem areas.
2. Find your top customer segments
Every online business possesses data about the products sold, who ordered these products and when they purchased it. This can give you valuable insights about customer behavior such as which are the top selling products, what are customer likes and preferences, what day of the week they buy certain type of products, seasonality in purchase trends, etc.
They also possess user demographic information in customer profiles. You can use this customer data to segment your customers. This can enable you to connect customer segments with user behavior, quickly detect patterns & trends, find out customers’ likes, interests & preferences. You can also take a look at how different segments of customers move through your funnel. This will tell you which types of customers perform the best so that you can work on getting more of them to drive your growth.
3. Stay on top of customer retention
No matter how quickly you add customers, if you don’t retain your existing customer, it will slow down your growth, lead to loss of revenues. Loyal customers bring in repeat business and provide stable revenues. For this, it’s important to figure out if your customer find value in your product or service. You can use at customer data to see if your customers use your product or service regularly, how long they use your product or service. Retention reports can help you find out how long your customers return, whether they repeat specific actions such as buying products or uploading files, and when they drop off.
4. Monitor the impact of product changes on customer behavior
One of the most important factors that affects conversion and retention is how product changes and new features affect product usage. To grow faster, it’s essential to know which changes created the most value for your customers. Online businesses store information about feature usage, whenever a person uses your product or service. This data can be used to find out which feature is widely used, which features are used by each type of customer, which features are used by top paying customers, etc. You can analyze user activity to understand how product changes & new features affect product usage. This will help you find out which changes & features work so you can build similar features, or make similar changes, and increase retention and revenues.
5. Improve usability
Watching customers in real-time is an exploratory exercise, but you can also use this data to answer specific questions. You can do this by looking for similarities in the behavior of individual users within a certain group. For example, you can look at the past activity of users who have been inactive for 2-3 weeks to discover patterns in their behavior. Similarly, you can look at user profile of inactive users, cancelled accounts, power users, or those who failed to convert from your free trial, to figure out what type of users display what type of behavior. Once you know the reason for their behavior, you can take steps to improve usability.
Customer data has an immense potential to help you understand how your business is performing; which areas are doing well and which ones need attention. It can enable you to spot growth opportunities and respond immediately.