Big data is only getting bigger, and while businesses are making the most of number crunching to help improve services and boost revenue, customers benefit from data analytics, too. In fact, many businesses are using analytics to improve their understanding of customer behavior and intent.
Improving customer insight isn’t just important for a business’s bottom line. It also helps to improve their overall experience. Data insights are helping to boost companies’ understanding of why their buyers interact without making potentially harmful generalizations and assumptions.
In addition, business analytics can help to boost the personalization of various services. Ultimately, businesses have more data and insight than ever before at their fingertips to ensure that their services are on target and meet demand.
In this guide, we’ll take a closer look at why customer insights and experience are so important in the world of business analytics and how a business analyst can use data to help make better-informed predictions and reports.
Why business analytics are so important to the customer experience
Business analytics focus on objective data and information pulled not only from customers themselves, but also from their interactions with a company. The key word here is “objective”. Analytics handles data that’s irrefutably true, meaning it’s more reliable.
By digging deep into customer insights, business analysts can build a clearer picture of a company’s ideal buyer. Although having a buyer avatar set up to help with marketing is a good idea, making broad assumptions rarely ends well.
Disregarding objective data from customers and their buying habits means companies are at risk of mismanaging both their product lines and their marketing. They also risk losing serious revenue simply because marketers don’t target buyers properly.
Using business analytics to better inform the customer experience ensures a company can keep making money and that their products and services align with what buyers need and want.
In the modern era, any approach to marketing and quality control without analytics in one form or another is at risk of falling flat with the wider public.
This is why so many people are investing time and money in qualifications, such as an accredited online MBA program available at reputable institutions such as St. Bonaventure University. There will always be a demand for business analysis, from breaking down customer data to making predictions about company performance. Through this online MBA program, students have the chance to learn about ethics, finance, marketing and how it all comes together through analytics.
In many cases, companies will focus business analysts on customer behavior so they can better shape their products and services. After all, without customers, there is no bottom line, so it makes sense to work with their insights and to improve their experiences.
As you might imagine, there are more than a few ways for business analysts to break down customer data and improve companies’ revenue alongside the buyer experience.
Enhancing customer insights through business analytics
A company that truly understands its customers is one that’s likely to succeed for the foreseeable future. However, none of us are truly psychic when it comes to buyer behavior, so it’s important for analysts to think carefully about the data they work with and what it tells them about customers.
Let’s break down a few important ways that business analysts work with customer data to map out their behavior and better support business decisions:
Customer segmentation
Making assumptions, as mentioned, is rarely helpful when it comes to predicting customer behavior. People don’t like being told what they like, and what’s more, today’s buyers are complex. While you never truly know one person’s likes from another, business analysts can make confident decisions by segmenting customers into multiple categories and demographics.
For example, a business analyst might identify that a key audience for their company is women aged between 30 and 40 with at least one child. Analysts can show marketers and decision-makers sales figures and brand interactions to prove how worthwhile it is to target such a market.
With this information, marketers can start to build buyer personas and avatars. They can look at the raw data provided by analysts and start to create people from demographics. What is it that a woman aged between 30 and 40 with children is likely to want most of all from a product? Are they looking for convenience, to save money or something to help lighten the load?
Admittedly, building customer personas through segmentation is still making assumptions, however, with much less risk.
Business analysts reduce this risk by providing raw data and reports that show which key audiences are making the most profit for a company. Ultimately, they can lend legitimacy to assumptions, which makes them much safer and, in many cases, even profitable.
Analysts will learn what to look for in demographics to build robust segments they can return to time and time again. They can pull data to help predict how certain customers will behave and what changes to products they’re most likely to find appealing.
Segmentation can sound as though companies are building on stereotypes, but with business analysts on their side, they can point to data that genuinely informs why they market products in such a way.
Predictive forecasting
Using predictive modeling, business analysts can look carefully into specific groups of customers and how they behave when it comes to purchasing. For example, they might find that a certain demographic spends more on a specific product range compared to others, or that they only spend up to a certain amount on any given product.
In most cases, analysts will work on models that revolve around recency, frequency and monetary (RFM) factors. These factors won’t necessarily tell us exactly how any given customer will behave in the future, but they are safe bets that marketers can rely on.
Predictive forecasting can become complex, which is why analysts use a range of different tools and software to break down the data available to them.
Behavior forecasting effectively gives businesses a clearer vision of why people buy their services and products. Alongside building customer personas, analysts can help marketers predict how certain groups will behave during a company’s lull season or during a period of cut-price sales.
Crucially, this predictive analysis gives marketers and project managers more confidence when it comes to taking bold risks. For example, without business analysts, they might not feel they have enough backing to increase prices during the holiday season.
Again, forecasting is still an assumption, but it’s rooted in a wealth of data and incredible analytical insight, so there’s often more chance they’ll make the right decision over making a mistake.
Service personalization
With data provided by analysts and a customer relationship manager (CRM) platform, businesses can now personalize their buyers’ experiences one by one. They can use reports delivered by analysts to determine how certain customers interact with specific products.
They can also set up specific marketing campaigns tailored to items they might typically be interested in or might have looked at and not bought yet. Business analysis can pick up on what repeat customers are likely to want to buy at a particular time of year and then offer them discounted rates at the same time next year, for example.
Personalized online marketing doesn’t have to be a one-on-one affair. After all, this would be a painstaking process across an entire customer base, but with careful segmentation and persona building, marketers can deliver niche benefits to different groups.
For instance, a business analyst might see that people who spend more than $500 a year on products tend to do so in the summer. In this case, they might suggest marketers run a sale on products at the start of June to boost revenue. Alternatively, they might pass this data along to quality control and product designers to develop new items that this group of people will want to buy for the year ahead.
Service personalization benefits customers, too. Receiving a special coupon or news about a new product that directly appeals to them helps people feel special and that a company is listening to them.
Business analysts help companies listen to their customers without having individual conversations, simply by looking at how they behave and meeting them with deals and new products they know they’ll like.
Service personalization also helps to build customer loyalty. A customer is more likely to continue buying from a business that appeals to their needs compared to one that offers a catch-all service with little in the way of discounts or improvement.
Using insights engines
Business analysts don’t just have a list of numbers and work through them. As mentioned, they work with several tools and programs to ensure the predictions they make are as accurate and as reliable as possible.
Customer insights engines have become crucial tools for business analysts. They help to bring together a variety of disparate data sources to provide a single point of view over a customer’s profile, behavior and how they’re likely to behave over time.
Insights engines are complex programs that help analysts work out the most relevant and appropriate data to use in building customer profiles and personas. Engines often bring together several different programs and tools in one place for analysts’ convenience so the profiles they build can be as accurate and as reliable as possible.
Analysts don’t always use insights engines, but they do help keep data tracking and report building as efficient and as accurate as possible. Engines have evolved to provide analysts and their businesses with incredible insight at unparalleled speed, so any businesses not investing in such tools are at risk of falling behind the competition.
Business analysts also rely on engines to help inform their reports and to ensure their forecasting decisions are as accurate as possible. Although business analysts learn how to work with large pools of data and how to build reliable reports, engines give them more clarity and confidence when reporting back to the companies that employ them.
Business analysts will learn how to use various tools and engines when studying their craft, too. This means the best-qualified experts will arrive at a business with more than just an interest in data and the ability to work with numbers — they will be prepared to deliver insights and reports confidently through many different platforms.
It’s this kind of skill diversity that businesses are craving in the modern age, and an analyst with experience in as many programs and engines as possible will be infinitely employable.
Churn prediction and retention
For companies running subscription and membership services, business analysts can help predict which customers are likely to discontinue their service or churn after a specific time, and what their average tenure is likely to be.
Consider a streaming service — business analysts for this type of company might notice that a specific type of customer cancels their subscription after a few months or just before the holiday period. With this in mind, they might suggest marketing retention efforts. They might offer a month’s free service or a discounted service to bring them back on board.
Alternatively, they might try to retain existing customers by looking carefully at their loyalty. For example, an analyst might suggest that a certain customer, or group of customers, pays their invoices on time without fail each month.
In addition, analysts could segment down further to identify a customer subgroup that pays bills regularly and adds extra services. These customers are likely to be among the most valuable to a business. There’s little need to chase them for payment, and they can be relied upon to add more to their payments each month.
Marketers can then work to retain these customers with extra VIP perks that will hold their interest for longer. These perks might be triggered if they attempt to cancel their subscription online or via phone. This is why many people find they have more leverage with companies when they pay on time and add regular services.
Analysts can also help businesses build retention strategies based on perks that have retained valuable customers in the past. For instance, methods that have proven to be the most effective way of retaining customers, such as offering money off or adding on extra features.
Customer journey analysis
Again, in conjunction with using a CRM, business analysts can map out buyer journeys so that companies know what to expect in the long term. Analysts can help to suggest important checkpoints in customer buying journeys that are fully trackable through a relationship manager.
Beyond this, data can also help customer service providers and salespeople make critical decisions at specific points in customer journeys. For example, an analyst might suggest that they offer a certain perk or deal should a buyer be having second thoughts about buying into service toward the bottom of the funnel.
They can also help salespeople mitigate risk when deciding what routes to take when onboarding new customers for the first time. What are some of the most effective ways of making a sale with a specific demographic or segment of people? Is there a greater chance of converting on a sale with this method, or will it likely lose the sale? Can they afford to take that risk?
As with marketing, business analysts can help sales and service departments make better-informed decisions, leading to higher customer satisfaction and increased revenue.
Sentiment analysis
Finally, sentiment analysis is a growing trend in business analytics that’s proving popular in helping to understand customer needs and wants. With sentiment analysis, analysts can examine online reviews to pull out positive and negative words related to specific products.
This means they can understand context and customer needs more closely without having to interact directly with each individual person.
Sentiment analysis technology is great at reading between the lines. It provides a reliable way to avoid making assumptions that could lead to lost business over time.
Customers need business analysts
It’s a misconception that only businesses benefit from analysts. Customers do too, as they receive enhanced products, services and experiences. The better the customer experience, the more likely a buyer is to stick with a brand.
This benefits businesses even further as it leads to more revenue. Companies are turning more and more to analysts, given big data’s increasing growth. In the long term, we’re all going to be dependent on objective numbers to define what direction we head in.
Business analysts have some of the safest jobs in the US. Companies need them to help make better-informed decisions and to ensure they retain the most loyal customers. Analysts work hard to ensure the data they pull and report on is genuinely actionable.
As you can see, business analysis benefits everyone when it comes to customer experience — and analysts will learn this early on in their education!
