6 Ways Small Businesses Can Use Customer Analytics

Data is the new oil. It is what powers the digital economy. The foundations of an ad-supported free internet were built on maximising customer data. 

While capturing customer data has acquired a negative connotation, if done ethically, there is absolutely nothing wrong with it. A mind-boggling 402.74 million terabytes of data is generated every single day. If you are not capturing some of that for your business, you are losing the battle before it even starts.  

While you might need a Masters in Data Analytics to get into the nitty gritty of in-depth analysis, you can always start by having strong foundational knowledge and learning about what tools beginners might find useful for specific use cases. 

1. Personalise Communication

No one likes receiving the same generic marketing emails. To truly stand out and connect with your customer in a flooded inbox, you need to know your customer better.  To go beyond basic information like gender, age and nationality, you can use tools like Google Analytics 4 (GA4). GA4 will enable you to look at things like:

• How visitors are moving around your website
• Which pages are making your visitors go away
• What type of content is the most engaging 
• Where are visitors staying the most

Such insights will give you a better idea about the preferences of your target customer which will in turn help you craft a better piece of outreach communication.

2. Stay On Top Of Trends

Businesses that ride waves of change navigate the economic tides better. Changing business offerings to be more aligned with these ‘meta’ trends can improve the long-term prospects of a business.

Here are a few examples:

1. A fashion retailer catches on to the clamour for sustainable clothing online and launches a new section in the store exclusively for more ‘green clothing’.
2. A restaurant owner reads online reviews about the lack of quality takeaway food options and launches a new dine-at-home menu with packaging designed for takeaway.
3. A local bookstore seeing an uptick in sales of sci-fi dystopian novels improves visibility and options for the genre.
4. A small digital marketing agency observes a demand projection for AI SEO in an industry report, pivots, and offers specialist services in the domain.
5. A gift shop owner sees a huge spike in the search volume of the keyword ‘Handcrafted terracotta gifts’ in Google Trends of her country and starts selling the same.

Businesses that catch on to long-term sustainable shifts in consumer buying habits are bound to be successful. Sources like online reviews, Google Trends, industry reports, trending hashtags, surveys, sales data and news articles are great places to begin with. However, it’s important to make sure that the trend being explored is a permanent shift rather than a temporary fad. 

3. Improve Customer Experience

Feeling amazed after seeing Coldplay t-shirts for sale on  Instagram just after buying their concert tickets? You can create a similar experience for your customers by using customer data the right way. The data can be based on:

• Past purchases
• Browsing history cookies 
• Face to face interactions
• Social Media analytics
• Customer feedback and surveys
• Loyalty programs
• Website activity

All of these are powerful sources of data that can provide an experience different from the competition. 

4. Increase Retention 

Who doesn’t love a repeat purchaser turning into a patron of the business? Repeat customers can make a huge difference to the top line of a business as the cost to acquire them is significantly lower than new customers. 

Customer data can be leveraged smartly to keep ‘em coming back. Looking more closely at feedback forms and purchase trends can make you aware of what customers feel can be improved. Their pain points can be addressed right away and potential upselling opportunities can also be gauged. 

5. Optimise Spending

The bills are raking in and you are always wondering where is all the money going. Sounds familiar? You’re not alone. Australian small business owners reportedly spend 12 days every year chasing unpaid invoices.  In an increasingly fierce competitive environment, keeping track of your expenses and bringing your costs down can be the sink or swim mantra for your business.

Data can again play a crucial role here. Tools like Xero can ease your workflow by auto-categorising expenses into relevant categories, cash flow analysis and bank account integration. If you are just starting out and operating on a very tight budget, free tools ike Wave Accounting can be a good place to start. 

6. Inform Your Decision-Making

Taking data-backed decisions rather than blindly following instincts is crucial. Relying only on experience and gut feeling can lead to inconsistency in final decisions. Here are a few scenarios where making decisions backed by data can help:

1. Determining which SKU to promote in holiday sales based on customer buying patterns.
2. Deciding whether to fire a salesman or not by comparing performance against peers and the average of the past twelve months.
3. Selecting the price of a new product based on the competition, sales data and industry reports.
4. Identifying whether the upward trend in sales of a particular item is seasonal or a permanent shift by analysing records of the past five years. 
5. Using data from feedback forms to gauge customer satisfaction rate.

Making decisions based on a mix of intuition and data ensures you put your best foot forward and avoid any personal biases and preferences. 

All things considered, data can be a game-changer for your business. It can not only improve your product and marketing but also enhance your decision-making and customer experience. One thing to always keep in mind is that customer consent should always be the top priority. Essential steps should be taken to ensure consent compliance. Failing to do that can lead to a breach of trust and the loss of a valuable customer.