With the increasing complexity of the global business scenario, it has become imperative for entrepreneurs to stand out and be noticed. Successful business models are cutting in on the knowledge of their customer buying behavior and providing them engaging experiences by leveraging information and technology.
What is knowing your customer? How is it done?
Knowing your customers is understanding your customers’ buying behavior and the drivers behind it. It involves assimilating your customer’s entire profile, including but not limited to demographics, behavior, expectations, etc. The depth of this knowledge is pivotal to comprehend what kind of people will be interested in buying or engaging with your products.
Analytical methodologies, collectively known as Customer Analytics, are important tools that will help you know your customer.
Why is customer analytics important?
Customer analytics is essentially helpful in driving key aspects of your business. Customers analytics helps you understand your customers and allows you to maximize returns via personalized marketing efforts. For example, customer analytics can help accelerate customer acquisition, improve retention and reduce marketing costs through a calculated marketing approach.
Customer analytics helps in:
- Identifying high-value customers early on their journey with the business.
- Understanding customers’ needs and wants to ensure product-market fit.
- Classifying customers into ‘value buckets’ based on their behavior.
- Predicting customers’ future behaviors driving engagement/growth.
How to know your customers through customer analytics?
We can look at Customer analytics projects through the lens of the customer journey with the following
- Acquire your customer- Some of the most important metrics to look at at the top of the funnel are monthly active users and returning active users to gauge your acquisition strategies – Acquisition analytics, Habituation analysis
- Engage your customer base: Some metrics that will help you understand how well engaged your customers are can be the retention percentages and the LTV of customers – Retention/churn analytics, Upsell analytics.
- Know and grow your customer: This process starts when you begin to Identify the homogeneous segments of your customers and evaluate the net monetary value they are creating over their lifetime with the business –Customer Segmentation, LTV scoring.
Let’s dive deeper into how Aryng leveraged its expertise in customer analytics to help a client accelerate their growth and revenue.
Our client – Safety4All (pseudonym), is a location-based safety app that helps friends & families stay connected even when they are outside, away from each other. With features such as circle creation, location sharing, and safety reports, the app ensures that friends and family are aware of each other’s whereabouts at any given point in time.
The free version of the app provides access to numerous features with limitations on the number of groups or users you can add to your profile. The premium subscription removes limitations on the number of groups and individual users besides providing access to newer and upgraded features.
Acquisition analytics: Acquisition analytics is a critical step in growing your customer base at the right cost. Acquisition data will help you understand your prospective customers better and identify effective marketing methods and channels to convert prospective customers into actual customers.
How did acquisition analytics help Safety4All?
Before Aryng, Safety4all had only considered the top-line, number of acquisitions per channel, while devising its investment strategy in marketing channels. Aryng used acquisitions data to measure ROI from each channel providing the marketing team of Safety4All actionable cost per acquisition metrics for each channel to optimize their marketing spends against.
Habituation analytics: Habituation analytics is all about identifying the customers moving through the funnel from a novice/new user to an engaged and retained user. Habituation analytics also involves figuring out what common activities users performed at different stages to discover features that engaged and retained users. Insights on the behaviors of retained users and the features used by them will help guide both marketing and product strategy.
How did habituation analytics help Safety4All?
One of the most important stages in the user journey of Safety4All is when a free user converts to a trial user – promising potential revenue. Aryng’s habituation analysis identified a majority share of trial users are users who have diligently completed every onboarding step. This prompted the product team to streamline their on-boarding launch program by reducing the number of navigation screens for setup by 50%. As the number of users completing their onboarding process increased, the number of users registering for free trials too increased.
Aryng also guided Safety4All’s marketing team to create onboarding campaigns to hand-hold new users through their journey on the app until they converted to trial users.
Retention/churn analytics: Churn analysis is crucial to understand when and why your customers churn. Understanding when and why your customers churn is vital to bridge the gap between customer expectations and your offerings – helping you understand product-market fit. Your customer retention rate depends on how well you have been able to cater to your customer’s needs and kept them engaged with you over a period.
How has retention or churn analytics helped Safety4All?
After the release of an update, Safety4All noticed a drop in the number of app registrations after installations. Aryng was able to break down the problem to identify the root cause of churn – a bug that did not render the “next” button on a specific launch program page. Fixing the step arrested churn, and improved retention of new downloads.
Upsell Analytics: Upsell analytics at its core drives revenue for the company. Understanding which new feature or product will be most useful to which segment of customers helps you create a marketing strategy that persuades purchases of a higher value item.
How has upsell analytics helped Safety4All?
Aryng identified segments of Safety4All users who indicated high previous usage but are now dormant. Based on historical usage, these users turned out to be mothers of children who now grew up in age and no longer require safety services. Marketing a driver safety report feature for young adults resulted in reviving engagement and conversions into new subscriptions for the feature.
Customer segmentation: Customer segmentation refers to the process of aggregating your customers with similar characteristics and comparable purchase behaviors who respond similarly to different marketing activities. Customer segmentation is crucial to optimizing your marketing efforts as ‘uninformed marketing’ or ‘mass marketing’ will result in a misuse of time and a wastage of resources that can otherwise be utilized to target focused groups to increase the ROI.
How has customer segmentation helped Safety4All?
At Safety4All, while analyzing usage patterns, transactions, and other demographic details of users, Aryng identified four major customer segments that can be classified as the needs of Moms & Dads, Children/Teenagers, Elderly, Commercial Users. Segmenting users with similar motives helped Safety4All market the right product features to the right segments to drive engagement and retention.
LTV scoring: LTV is one of the most crucial KPIs that helps identify high-value customers in a business right from their first transaction.
How has LTV scoring helped Safety4All?
Aryng built a robust model to get to the actual value a user will generate within their lifespan on the app. Understanding the potential revenue from a user impacted every major team within Safety4All: product team prioritized the optimization of the app for the mobile types of the high-value segment; the finance team had a clearer picture of how revenue would look like over the next few years to hedge their bets and investments for growth; marketing team had clarity on the channels they can optimize for high-value acquisitions and messaging to improve retention.
Also read: Are you a Data Science hero — aka BADIRist?
Aryng’s thought partnership in customer analytics was able to drive immense growth and value for Safety4All, overshooting Safety4All’s revenue forecast by 15%.
From granular monitoring of the consumer data to narrowing it down into segments, customer analysis plays a vital role in offering in-depth knowledge of customer behavior. Thankfully, there are enough methodologies and Aryng’s expertise to help your product achieve its growth goals.