27 Nov 2019 A Fundamental Approach to Customer Journey Analysis

The most crucial asset to any B2C organization is its customers. From marketing to services, channel engagement to cost optimization, and customer satisfaction to adapting to the ever-changing market trends and expectations; businesses today face extremely complicated and versatile challenges.

Interestingly, customers generate a huge volume of data and that too is growing at a faster rate than ever before, mostly due to the rapid digitization of any/all business processes. Also, with the swift adoption of machine learning and AI in the industry, it is the right time to focus on it in more detail.

The customer journey starts from before the customer is a prospect, but not even formally acquired into the business. Acquisition of customers are known to be the costliest endeavour for any B2C organization. Although there are many different variations of the events in a customer journey, broadly there are three: Acquisition, Engagement and Retention. The objective is to manage to do everything in the best way to Acquire, Engage and Retain your customers.

1. Acquisition

There are many approaches for customer acquisitions and areas that can be delved into. But here are a few to investigate first:

• Programmatic Advertisement: the process of programmatic media buying has been greatly enhanced since the advent of machine learning and AI. It gives you an enormous advantage to bid across inventories, display, social channels and video. You would most likely be interested in analysing conversion rates, behavioural metrics of visitors, click economics, etc.
• Social Listening: with millennials slowly taking up a more active proportion of the digital buyers’ segment, social platforms are no longer something to experiment with. It is a valid and proven marketplace for aggressive acquisition. Analysing metrics regarding impressions, localized targeting, hyper-personalized messaging, etc. would be something to look at.
• Brand Value Creation: This is a long-term strategy but has a great impact on the minds of consumers regarding brand perception. Perception is a very strong metric to sway consumers’ impulses and has great potential in organic growth. Influencer analysis for affiliation, analysis of awareness (knowledge) metrics, competitive analysis metrics, etc. would be interesting areas for further exploration.

2. Engagement

Customer engagement and experience is a quite challenging task to handle given the frequency of customer operational touchpoints in the stage. The constant dichotomy of enhancing relationship metrics against value metrics has always been a struggle.  Here are a few areas worth investigating:

• Segmentation: basic 101 of customer analytics is segmentation but doing it right paves the way for all further analysis. RFM/E/X (Recency-Frequency-Monetary/Engagement/Experience) analysis, clustering models, behavioural models, etc. are some of the many approaches by which consumers have been segmented for so long. Map that analysis with product penetration analysis and that would give you interesting indicators to take action on.
• Campaigns and Promotions: the powerhouse of customer engagement. There are numerous works done on the topic to easily get diverted and confused. But the best approach when starting is to collaborate with the marketing team to understand campaign design parameters. Empirical analysis to find the optimal values for the parameters is critical as is design hypothesis to prove the design is right. Also, simultaneously tracking channel engagement parameters is going to provide you with better insights about future delivery mechanisms.
• Service and CSAT Analysis: taking into consideration of your customers’ service and satisfaction is of the utmost importance. Bring Service and CSAT metrics into the operational stream to provide much more context into your decision making and campaign & promotion delivery. Up-Sell, Cross-Sell or any other marketing campaigns go very nicely with this contextual information. Customers are mostly impulse buyers where emotion plays a big role. Service and CSAT metrics are great parameters to measure and tap into the customers’ emotions. Also, social gives a direct view into the millennials’ mind regarding their position on products and services.

3. Loyalty and Retention

A loyalty and retention program implementation would for sure be one of the most important aspects. Mainly, after all the effort and cost associated with getting the customer, it would be extremely dissatisfying to see the customer leave. The margin of loss is high, and the replacement cost is even higher. At the same time loyalty programs would allow you to reward your loyal and high value customers.

• Churn Prediction & Modelling: the most popular and effective approach to prevent churn in your customer base. Although this model is quite common, it is imperative to look at the by-products of a churn model that you build such as driver analysis that contributes to churn. It is also important to understand your prediction window and build your model accordingly.
• CLTV Modelling: customer lifetime value or CLTV modelling is essential to understand empirical value of your customers. Associated drivers’ analysis, the effect of marketing on CLTV, etc. would be some interesting exploration areas as well.
• Loyalty Programs: this by itself is a huge concept to discuss. There are numerous ways to build a loyalty program among which some interesting approaches in recent times would be gamified loyalty programs, badge frameworks, tier programs, etc.

While we have discussed so many areas that help with analysing customer journey, there are still a few that would be encompassing multiple areas or stages that have been discussed. Concepts and implementation strategies like pricing go across every stage depending on the delivery instrument. Cost analysis must be by your side everywhere and every step of the way. Social is creeping more and more into every aspect of your customer journey. There are organizations who do segmentation on not only existing customer base but potential customer base as well. In the world of hyper-personalization and instant gratification B2C players must always be agile. The only edge in the B2C game is to set trends rather than following them. All organizations need to innovate and understand the hidden nuggets in the data that their customer is generating. That too, the faster the better!

In ClearPeaks we have the capabilities to help guide through these troubled waters and deliver solutions that will help your business reap the benefits. Not only the analytic solutions themselves, because ClearPeaks also delivers on the data engineering work which is partly the most essential topic in the entire implementation process. Read more about ClearPeaks’ capabilities and innovations here. If you want to know more or you think we can help you please do not hesitate to contact us, we will be happy to help.