Consumers today have more options than ever. Even with a seemingly niche product or service, chances are you have competitors in your industry who are targeting the same customers as you.
So what steps can you take to differentiate your brand and gain a competitive advantage? And how can you increase customer loyalty?
The answer is with customer intelligence — a way to leverage data about your customers to drive more sales.
In this article, we’ll take an in-depth look at what customer intelligence is, why it matters, and steps to getting started.
Customer intelligence is the process of gathering and analyzing customer data. The purpose is to gain actionable insights that you can use to grow your bottom line.
The following are four types of customer data:
Customer intelligence is all about taking this raw data and turning it into actionable insights that you can use to make better business decisions. Let’s dig deeper into that last point.
So far, we’ve looked at what customer intelligence is and the four main types of customer data you can collect. Now let’s take a look at some of the key benefits of customer intelligence.
Customer intelligence gives you a clearer picture of who your customers are. With this level of insight, you can optimize your ad spend and improve your marketing campaigns.
Consider the fact that TikTok has over 689 million active users. That’s a marketing channel that you can tap into to market your brand.
But have a look at the following chart:
Image source: Statista
Based on the above, we can see that teenagers make up about 32.5% of its user base, while users aged 20 to 29 make up about 29.5%. If your target audience is primarily older, you might not have much luck with this platform.
Customer intelligence helps you narrow down who your customers are and the channels that they use. This way, you can focus your efforts on those that are worth it for your business.
Another use case for customer intelligence is monitoring how your customers behave on your site or app. By conducting a workflow analysis, you can identify trends and optimize the customer journey.
Customer intelligence makes it possible to predict how customers will behave in the future.
For example, you can analyze how campaigns have performed on customers with specific attributes (e.g., age, income level, etc.). Then you can make predictions if you run similar campaigns that target people with the same attributes.
EarlyBird helps parents, friends, and families invest for kids. Along the way, it collects data about customers and the investments they make. With these insights, EarlyBird can market new products to users and make accurate forecasts.
Change is practically guaranteed in every industry.
No matter how dominant your products or services are, a competitor can swoop in and destroy your market share if you don’t respond quickly enough.
To illustrate what happens if you fail to adapt, look no further than BlackBerry. At its peak, BlackBerry had an estimated 20.7% share of the smartphone market worldwide.
Image source: Statista
By the time RIM came out with a response to Apple and other competitors, it was too late. Now you’d be hard-pressed to find someone who still has a BlackBerry.
The real-time customer intelligence that you gather provides insights that you can use to stay agile in your industry. This can mean the difference between growing your bottom line or losing valuable market share.
Even die-hard customers are known to switch brands.
Research shows that even when customers loved a brand, 59% walked away after several bad experiences, and 17% switched to a competitor after just one bad experience.
In other words, your customer base will start dwindling if you compromise on customer experience. Customer intelligence can help you increase retention rates.
For example, you can conduct customer surveys to collect feedback. If customers constantly complain about slow responses to support tickets, you can take steps to improve those times. Examples include implementing live chat or expanding your customer service team.
Now let’s look at how you can get started with customer intelligence.
The sooner you develop and implement a customer intelligence plan, the better off your business will be. Follow the steps below to put together a strategy.
First, you need to have buy-in from leadership. Otherwise, your efforts to leverage customer intelligence will likely fizzle out.
To get buy-in from leadership, identify parts of the value chain — activities that organizations carry out to create a product — that can benefit from customer intelligence.
An example for consumer-goods companies could be using data about sales histories to optimize inventory. When you can show the benefits of customer intelligence, c-suite executives are more likely to take notice.
There are different sources that you can use to collect customer data.
A good place to start is by analyzing each channel across your customer journey. This will allow you to identify touchpoints that customers have with your business.
With these data sources, you’ll have a ton of information. But that information on its own doesn’t provide value.
Customer intelligence means that you’ll be collecting and analyzing a lot of customer data. It’s important that you have the right tools.
One option is to use dedicated customer intelligence software. These platforms allow you to collect, manage, and analyze customer data from a central platform.
There’s a good chance that you’ll collect customer data from multiple sources. Be sure the platform you choose integrates with your data sources. It should also work with the CRM or project management software that you use for your business.
Next, you’ll want to consider your use cases. What exactly is your reason for using customer intelligence software?
Whether you want to better understand the customer journey or create more targeted campaigns, defining your use cases will help you narrow down your choices. Consider getting input from other stakeholders.
Customer data on its own is rather pointless. The problem is that sweeping through raw data for insights isn’t easy unless you can visualize it. Choose a tool that lets you transform customer data into actionable insights.
Here are a few software solutions that you could consider:
Image source: Segment
Segment is a powerful and user-friendly tool that lets you bring all your data into one platform. With this tool, you can collect and route customer data into the system.
With Segment, you can unify data across different channels and gain a more comprehensive view of your customers.
Image source: Signal
Signal is another customer intelligence platform that helps you gather and organize your customer data. The customer data is also cross-channel, meaning you can pull in data from different sources.
Image source: Asseco
Next, you’ll need a place to store customer data. A colocation data center may be a good option for your company. This will keep your data organized in one place.
At this point, you should have various data points and a software solution to manage your customer data. But the whole point of customer intelligence is to turn data into insights.
Let’s consider churn — the rate at which customers stop doing business with you. If customers are leaving at a high rate, you might not be in business much longer.
One thing you can do is gather data about customers who have previously churned. If past customers with specific attributes churn at a high rate, you can follow up with existing customers that have similar attributes.
The following chart shows retention rates for a music app:
Image Source: Amplitude
Based on the above, we can see that retention rates quickly dropped within the first week of using their service. But the interesting thing is that retention rates increased when users favorited at least three songs.
With that statistic, you might research ways to get users to favorite at least three songs. You might start onboarding new users by asking for their favorite music and then presenting a curated list.
Of course, this is just one example. You’ll want to conduct your own data analysis and draw conclusions based on your research.
The use cases for customer intelligence are practically endless.
For example, your sales team can analyze the most common paths that customers take from the time they become aware of your business to whenever they convert. That knowledge can help them identify any gaps in the customer journey. This can also help shorten the sales cycle.
As for the product team, they can conduct data analysis to identify what features customers like and don’t. They use that insight to build better products or improve existing ones.
For customer support teams, they can pinpoint areas of customer service that might need improvement. Examples might include slow customer response times.
With the insights that you gather from customer intelligence, it’s important that you act on it. But keep a close eye on key metrics like conversion rates or customer satisfaction scores to measure the impacts of any changes you make.
Customer intelligence is all about leveraging customer data to grow your bottom line.
Getting started with customer intelligence isn’t easy. Not only do you need to get buy-in from leadership, but you also need data sources and a platform to organize everything. Then you need to analyze all that raw data and act on it.
But the sooner you get started with customer intelligence, the more benefits you’ll reap over the long term. By following the steps above, you’ll be well on your way to creating an effective customer intelligence strategy.