The most effective marketing campaigns are the ones tailored to your high value customers and prospects. To implement these campaigns, you need to understand exactly who your customers are, what they want and which messages will resonate with them.
If that’s the ideal, how do you get there?
Via customer analytics software. These programs draw on the heaps of 1st and 3rd party data available in today’s digital world to analyze your customers’ behavior and offer you valuable insights. You can then leverage those insights to enhance your marketing efforts.
Customer analytics (also known as customer insights or customer intelligence) is a tactic businesses use to better understand their customers. After all, the more you understand your customers, the better you can respond to their needs and make them happy.
The data powering your customer analytics can include all the touch-points a customer has with your brand. Whether it be from in-store and online purchases, a person’s engagement with your loyalty program, email campaigns, social media, or your website and mobile app, all this disparate data can be brought together for easier and more accurate analysis using customer analytics software.
Harnessing the power of your data to gain deeper customer insights will help you reach more people, discover your high value audiences, boost customer retention and improve satisfaction with your brand. It also enables predictive analytics and better segmentation within your contact database.
While customer analytics software can add rocket fuel to your marketing efforts, choosing the vendor who best fits your specific needs is crucial. So how do you know which software program is best for your business?
How does it protect and secure my customers’ data?
Gathering customer data is both a privilege and a responsibility. All marketers must take data protection seriously, especially as customer concern grows over data collection and ethical usage.
Thorough security measures accomplish two essential goals. First, they protect sensitive customer data; second, they help to ensure that your software and the handling of data is compliant with all relevant regulations.
Only use customer analytics software that will take the protection of your customer data very seriously. If a platform doesn’t emphasize the importance of security and spell out the security features it implements, cross it off your list.
Accreditation services can give you a deep understanding of the security measures a software vendor takes. These institutions prescribe a set of policies regarding security management best practices. If an organization is accredited by a respected third party, you’ll know at a glance that they meet high standards for information security management.
For instance, Lexer is ISO/IEC 27001 certified as well as SOC2 audited. Earning ISO accreditation is an incredibly thorough process. This examination involves background checks for those with access to customer data, password requirements, classification and control of sensitive information, even how long your desktop can stay open before your screen locks.
SOC2 is similarly stringent: an external agency audits your security systems and grades them. SOC2 is a banking-grade level of security.
Customer data should also be protected with technical services like point-to-point encryption. Encrypted data is protected even when a server is breached — a key feature in a time of rising digital threats.
These processes are exhaustive and intensive for one important reason: it’s never acceptable to compromise when it comes to customer data protection.
Governing bodies around the world monitor and manage the use of customer data. Any customer data software you select must meet the compliance laws of the areas where your business operates. Make sure to check that your vendor meets all local and international regulations, such as GDPR in the EU or CCPA in the US.
Regulations are put in place to safeguard customer identity. As a marketer, keeping the trust of your customers is a top priority. So make sure your customer analytics software has equally high standards when it comes to collecting and protecting your customers’ personal information.
The common thread among these features is trust. Just as your customers should trust you to properly handle their data, you should be able to trust your software to ethically collect and securely store it.
What level of technical expertise is required to use it?
Good customer analytics software can handle much of the necessary security for you. But you also need to consider what your day-to-day use of the program will look like.
Analytics software operates on a wide spectrum of technical difficulty. Some platforms are essentially analytical studios, such as programs like R, that spit out a flurry of statistical data. These often require various levels of programming abilities. Others are tailored for the end-user and require no outside knowledge.
Pure data programs use powerful algorithms that can parse through your data – but you have to write code and understand the statistical output. To be able to use these tools properly, you need to have someone on your team with a data science background.
This type of customer analytics software is certainly valuable: it enables you to do deep and insightful customer analysis. However, the barrier to use is high. You’ll need a data scientist to structure your data, write the necessary code to power your models and analyze the program’s statistical output.
For most marketing professionals, such a statistics-heavy tool isn’t ideal. The best customer analytics software for most marketers will have advanced analytical models built into the platform already and thus require far less specialized knowledge to operate them. Rather than having to program the type of analysis you’re looking for yourself, you can simply connect your data and have insightful customer analysis provided to you. You won’t have to spend hours digging around a database every month to understand your customers’ behaviors and patterns.
In other words, do you want a tool you can use to perform advanced analytics on your data? Or do you want a tool that uses advanced analytics to provide you with insight on your customers and products?
Before selecting customer analytics software, assess your team’s strengths in order to understand which system makes sense for you.
Is it optimized for marketing purposes?
Different types of customer analytics software can help you accomplish different goals. For marketers, the best choice is one tailored explicitly to marketing teams.
This usually means a customer data platform. Many of these programs will be pre-built and require no statistical background. They will also have a range of specialized features that can make your job easier.
Marketing happens on various platforms, and you need all of your data to link back to your analytics software. That can be achieved through integrations. Make sure any platform you choose has all the integrations you might need — from social media to email engagement to in-store and online purchase data.
If you have extensive information on a customer’s actions on your website but can’t track the social media ads that brought them there in the first place, you’re working with partial data. Do you know how many website visitors from digital campaigns end up buying your products in-store?
Without access to all the information you need, you won’t be able to tailor your advertising strategy.
Single Customer View
Consolidating all of your customer data into a single database is only half the battle. Your software should also make it easy for you to interpret your data for each customer in a single customer view.
This type of view – usually a holistic customer profile – offers a comprehensive look at all the actions an individual contact has taken with your business across any channel. From there, the software can predict a person’s lifetime value and the next item they are likely to be interested in purchasing. It can also offer suggestions such as which channels and campaigns you should use to target that customer in the future.
Unified customer profiles should also update in real-time.
Some customer analytics software providers like Lexer take this a step further by offering an enriched single customer view. They draw on trusted third-party sources to supplement your 1st party customer data so missing fields in your customer profiles, like last name or gender, can be filled in automatically.
A single customer view is a feature traditionally designed for marketing. It enables you to holistically understand the behavior and preferences of your customers and make smart predictions. Ultimately, it allows you to view your customers as individuals with unique needs that your company can fulfill.
While the user interface of customer analytics software should be simple and easy for any marketer to use, the software should be running many advanced calculations behind the scenes to bring you the most accurate and impactful insights.
As your customers engage more with your business, the platform will learn to predict their upcoming purchases or churn risk. So look for software that offers predictive analytics powered by machine learning to ensure you’re getting the most insight possible from your data without having to do much heavy lifting yourself.
Machine learning will help you understand your customers better than ever and significantly improve your understanding of them over time.
Advanced machine learning and marketing tools, like Lexer’s Recency, Frequency & Monetary (RFM) model, are optimized for today’s most effective marketing strategies.
Predictive Lifetime Value
Predictive lifetime value models, while very sophisticated and technical to build, come included in some customer data platforms. The insight provided by predicting the lifetime value of each customer allows you to focus on those who have the greatest future spend potential while acquiring new customers like them through campaigns using lookalike audiences.
The best customer analytics software will offer clear, accessible output from their predictive models. Some options require you to build the model yourself; others allow you to simply interpret the results from the default model provided and put it to use in your marketing efforts. If you don’t have the time or capabilities to build a model yourself, make sure there’s a default model provided that is relevant for your business.
What services are offered with the software?
Support services are a critical factor in deciding which customer analytics software to use. Too often retail marketers buy new software for their MarTech stack with high hopes only to find that realizing those goals requires more resources and know-how then they have. What good is buying great software if your team can’t get great outcomes from it?
Look for support services that include onboarding, troubleshooting, data maintenance, continuous training, as well as strategy and analysis to ensure you’re making the most of what the software has to offer.
While Lexer offers significant levels of support across these areas, not all clients need them. It’s important that your licensing agreement provides the appropriate level of service for your specific needs.
Too little help and you won’t see the full benefit of the technology. Pay for more services than you need and your costs increase without improving ROI.
For example, brands who are new to customer analytics or don’t have internal resources to do in-depth analysis of what makes a customer buy certain products, turn to Lexer to perform that work. Lexer presents their analysis to the client and can quickly build intelligent customer segments in the platform that the client’s creative, social and email teams use to build and manage campaigns. Other brands are very successful managing all aspects of strategy and analysis in-house. They merely need Lexer’s Success Team for troubleshooting and new-hire training.
Customer analytics software is a powerful tool on its own. But when that tool is backed by high-quality support and specialized services, it becomes the powerful engine of your marketing efforts.
Software that is made for marketers combines all of these features into one platform. These customer data platforms, or CDPs, are designed for marketing teams and built with marketing users in mind. They enable you to gather customer insights and take meaningful actions to strengthen your marketing.
Lexer’s solution does all this and more.
Our customer data platform combines security, compliance, robust algorithms and a wealth of marketing-specific tools into one unified package. The Lexer CDP brings the customer analysis to you, rather than making you work for it. It’s a marketer owned and operated tool that is both simple to use and incredibly powerful.