Why Understanding Customers is Important – Use Big Data to Understand Customers
Understanding your customer is considered the prime key to achieve marketing success and overall business goals. Successful marketers put what their customers want first and consider that one of the most effective techniques of making the product information, offers and services accessible to customers.
In-depth understanding and insights on your customers, a lot more than merely knowing their first and last names, incomes, location and ages. Marketers need to know their customers’ tastes, social media behavior, browsing behavior, search preferences as well as their hobbies, content they watch, read and listen to for additional edge.
In addition to these customer insights, it is also important to understand customers’ purchase behavior. Businesses need to analyze the type of people that will be interested or needing their product offerings or people who are facing the problems that the product or service will be able to solve. The following are some key questions marketers need to ask themselves to be able to understand their customers better:
- What are the best reasons why customers want to buy your services or products?
- What is the frequency of customers wanting to purchase your product or service?
- What time should marketers proactively outreach customers so that they will not look elsewhere and make purchase decisions?
- Who your customers are purchasing the product or service for – self-use, spouse, kids, senior members or friends? The product messages and offers should be focused on who is going to use the product or service.
- Will the customers make a purchase at any physical store, events or an online outlet to make the purchase?
Understanding your customers more efficiently with big data
When it comes to the accuracy and relevancy of customer insights, there is no better alternative to the “Big Data” that offers updated and all-encompassing marketing insights and better results. So, what is big data and how does it help marketers in understanding customers better?
What is big data?
Big data refers to the complex database which can be challenging to process using common data processing applications including Excel. However, marketers who use this data know the potential in marketing operations. The marketing, sales, and customer service data that businesses commonly have may reveal a lot about customers, but big data will enrich your campaigns with greater valuable analytics and accurate insights.
Big data comes in exceptionally handy when the goal is to reach the right customers at the right time, with the right message. Big data enables marketers to predict future buys, evaluate customers’ behavior and comprehend their requirements for your products and purchase patterns. Some enterprises get overwhelmed with the massive amount of customer data and fail to process that data volume and adopt actionable strategies to make use of those insights. Big data is undoubtedly highly useful in knowing about customers, but marketers need to focus on the customer personas or human element in that data range.
Why do marketers need to understand customer personas?
Customer personas ideally refer to the customer traits that represent diverse segments of the customer base. Analyzing customer segmentation is imperative in creating targeted marketing messages and campaigns. These customer segments include detailed information – most common demographic characteristics collected include gender, age, ethnicity, marital status, family, employment and income.
In addition to demographic data, the non-identifiable customer personal details that marketers commonly collect are –
- geographic location
- people that influence their buying decisions
- how customers respond to or participate in events
- personal goals
- past purchase behaviors
- why customers interact with the brand
- what information customers want from a company
- what type of products or services customers want from a company
- sources they use to look for product information
- pattern of content consumption
How to identify your best customers?
Identifying the customer’s who can be the most valuable buyers is crucial as the analysis helps marketers focus on their campaign efforts. Earlier, companies used to define the Most Valuable People or MVPs as the customers who are likely to spend more on their products. Although these customers are the most expensive buyers to keep, but they are turned out to be the least loyal customers in the long term. Here big data is useful in monitoring different factors to extract more information on customers. After defining customer personas, they need to discover more about customers by using these following metrics:
Long-term value: Check out the amount of money buyers are willing to spend on your products over the long term – is it going to decrease or remain the same? This metric will help you identify the prospects of relationship your brand is going to build with your customers.
Average size of purchase: Find out the amount of money customers are willing to spend on common purchases and do not just monitor as an aggregate, but also narrow down by each buyer persona. Additionally, take into account the fact that customers make purchases not solely based on price, but based on value. This metric will help marketers understand which customer personas they will be able to sell more to by leveraging special offers, awareness-generation campaign and promotional campaigns.
Acquisition costs: Discover the amount of resources you need to spend on marketing campaigns and sales efforts on a specific type of persona. When marketers are investing huge in their marketing and sales efforts, make sure they know which customers are going to make large purchases before spending a lot on those customers. Take consideration of these factors to analyze customer acquisition strategies.
Customer satisfaction: Marketers need to figure out if their buyers are happy with their services or products. Define and differentiate groups of customers who are satisfied and unsatisfied and what kind of responses create the differences. Analyzing this metric will uncover campaign and product flaws, necessary improvements to be made and lets marketers adjust their campaigns and products in order to meet customer expectations.
Retention costs: Marketers need to discover what their buyers require from the product, services or campaigns to stay. Find out what customers expects from after-sales support, communication and product training. Acquiring customers, costs a lot more than retaining your current customers; that’s why it is important to adopt the best strategies and put the best step forward to build long-standing customer relationships and continue adding value to customer relations.
Value alignment: It is also important to discover if your intended buyers are going to actually make a purchase from your brand. If the code intended buyers are not making any purchases from your brand, then who will going to? Analyzing this metric is important to filter and identify customer personas who are actually buy from you.
After doing an in-depth analysis of by these metrics, marketers need to see if these metrics will match with previous considerations on your customers? Make use of these metrics to segment similar customers and make the right plans about targeting various customer segments.
Why use big data to understand customers better?
Try to figure out how behavioral and demographic trends connect with the best customers whose lifetime value will be higher than the combined costs of acquisition and retention. Then, assess with the customer personas. Marketers also need to monitor buyers who can be moderately valuable and buyers who don’t fit the segment at all. Thus, marketers can create various groups of buyers who are meticulously defined by demographics, merit and behavior. Make sure your company is prioritizing upon these segments and also by the value personas can bring to a company.
Remember that huge volumes of big data may not be useful for any business unless professionals can create and segment customer persona. Marketers need to take caution in connecting the data to best customer experience and create the perfect buyer personas which will make purchases and will form long-standing relations. All your digital marketing strategies and campaign goals must be targeted to these personas.