Roadworthy: the role of analytics and data in your retention efforts

You can use data and analytics about your business to take steps to retain your customers in well-informed and effective ways.

Introduction

In Training in on the Retention Track, I likened the process of retention to keeping a train hooked together and continuously moving down the rails. I said you could do this through using marketing, reviews and feedback, subscriptions and memberships, easy shipping and returns, and personalized customer service.

Actually, though, I mentioned at the very end that everything should be personalized through the use of data analytics and visualization. I didn’t have time right then, or space in an already fairly lengthy post, to go into the data topic, but it’s high time I did so. All the strategies I explored in that post are helpful, but knowing which of them to apply at what time and in what way is also crucial, and that’s what can be revealed by the data.

I likened all the retention activities to keeping the train of your business on the tracks, but actually your business is less like a train and more like a convoy of semis moving your product down the freeway. Adding data to the mix is akin to equipping all the semis with spatial awareness cameras, GPS tracking, and live traffic updates so you can know what needs to be done and when. Doing this makes your convoy roadworthy.

Understanding your customers

In order to deliver its load, a convoy of semis needs to understand road conditions, traffic, and what’s going on around them. Similarly, to deliver on your business goals, you need to understand many things, too, but the things you need to understand are your customers. For you, this is key to knowing how to modify your strategy to fit them.

Understanding your customers is so important.Business.com very strongly links understanding your customers with your ability to retain them. They say you need to focus not so much on the sale as on your customer's experience before, during, and after it. This deep understanding of your customers’ experience can be revealed by the data you already have streaming into your site, but may not have time to exhaustively analyze.

Understanding your customers to this extent is the key to unlocking the ease and delight I referred to in the first post, as well as unlocking proper marketing, and more efficient customer service. Furthermore, that greater understanding can clue you in to what you might be able to recommend for your customers at just the right moment, as Excadel, a business strategy and technology consulting firm, recommends. While most people don’t like being advertised to, getting the right tailored recommendation at the right time is likely to make your customers feel like jubilant kids rather than grumpy consumers. It’s all about the personalization.

A shipping truck that cuts you off is likely to annoy you or make you grumpy, but if one glides in front of you with a large space cushion, and it's going the same speed as you, you might view it as a favorable wind block to increase your fuel economy. It may make your way easier. Making your customer's way easier should be one of your prime objectives.

Discourage churn

Once you understand your customers to this greater extent, you can also take steps to discourage their churn. Churn, of course, is when happy customers become dissatisfied customers, and finally noncustomers.

You need to discourage churn. FasterCapital, a startup incubator, points out that analyzing customer engagement data can help you understand why customers stop using your product. Only then can you figure out what you can do to reverse that trend and encourage your customers to keep buying. What steps you’ll have to take to discourage this churn will be dependent on the data, so you should familiarize yourself with it, as well as with any interpretation of it that your data service provides.

Cohort and Segmentation Understanding

Aside from the analysis of individual customers, and their journeys, various analytics services can help you segment your customers and analyze them as groups, and even cohorts. In terms of your business, a cohort is a group of people that all became your customers in the same way, for example, through the same channel.

By grouping these customers together and analyzing their collective traits and patterns of behavior, the first thing you can do is to work to bring in more customers through the high-performing channels.

Beyond directing your acquisition efforts, though, cohort and segmentation analysis can be helpful in other ways, too, though not without a good way to understand the data you’re pulling. Once your customers are segmented into groups, you can then start taking steps to affect the actions and habits of those groups.

You can do this by directing marketing or other communication strategies to them individually or collectively (we recommend SMS marketing), or even by optimizing the messaging on your site through A/B testing. You may find that targeting your actions at a particular group of your customers, a segment or cohort, may end up being a very effective and profitable use of your time and effort.

This is because by targeting a group, you can expect to have a group response. Your actions will tend to have a glacial effect — not a response that comes at a glacial pace, but rather a response that moves the whole big block of customers together. Even if it does take a little longer (and it needn’t, though it may take some time to optimize), once you get that glacier headed in the right direction, it’ll take another monumental event to interrupt it.

Services to get you started

There are a number of players in this space, and they all have slightly different uses and approaches. Let’s consider some standalone and service-specific options, and look at some of the benefits and tradeoffs with each.

Standalone: Triple Whale

Triple Whale is a standalone service, though it has many integrations to pull in data from other services you use. Since it’s aiming to be your all-in-one analytics solution, you’ll find its reach impressively widespread and all-encompassing. With all the data it pulls in from the variety of information sources it has available to it, its dashboard can serve you up some really helpful metrics, from product conversion rates to product sales to impressions on content, and more.

In addition to being able to deliver this essential data to help you understand your customers, Triple Whale can also do a pretty good job of interpreting it for you using its AI model. You can ask it questions to get insights or recommendations. If your team doesn’t have a dedicated data analyst and business consultant, this could be very helpful, though of course its recommendations and conclusions should be taken with a grain of salt.

You can even ask the AI to write some example copy for the type of customers you’re looking to attract more. As with any generative AI, we recommend you carefully edit the suggestions you get from it before sending them to real people.

As I pointed out in “On the AI takeover” generative AIs are really only to the level of pretty marginal copywriters, though they do continue to get better. Still, I recommend careful editing of any AI’s suggestions before sending them off to actual or potential customers.

Cautions about unexamined confidence in analytical AIs aside, however, we think you can’t go wrong by examining as much data as you can, which standalone services like Triple Whale make possible. They can help you get the lay of a complex land so you can navigate your convoy through the twists and turns along their journey. Adding the analytics piece makes your convoy roadworthy.

App Specific

Several of the specific ecommerce services we recommend have analytics for themselves built right into them. Klaviyo, the customer communication service, is a prime example of this. Klaviyo Analytics can show you information about your current customers, and organize it in an intuitive way.

On top of that, though, Klaviyo’s AI model can give you what it calls, “predictive analytics”, to forecast such things as spending potential, lifetime value, churn risk, and others. Klaviyo’s generative features include creating segments, designing email campaigns, drafting email responses for you to user feedback, and even offering suggestions to your clients when they agree to write reviews for you.

Recharge, Okendo, and others have similarly appealing analytics offerings. All of these have helpful features, but aren’t likely to be as robust as standalone solutions. This makes sense, since their purpose is to collect and interpret the metrics most relevant to their app so that they can give you suggestions of how to use it, thus persuading you to use it more.

In any event, it’ll take some digging to figure out the capabilities and best uses of your apps’ analytics, and some training to learn how to use them to optimize your processes, but it’s well worth it to put in the time and effort, as this sort of data-backed optimization can have a profound impact on your business.

Conclusion

Whether you decide to put the various app-specific analytics offerings to use to optimize the usage of some of your apps, or invest in a comprehensive solution like Triple Whale on its own, we feel that adding more data analysis to your ecommerce efforts is a great idea. It can help you understand your customers better, segment them, and know how to use the various tools you have at your disposal to decrease churn, increase acquisition, and change your customers’ behavior.

The trucking convoy of your business faces many conditions and even roadblocks that can get in the way of a smooth run. As the one in charge of the navigation of your convoy, though, you can make sure your convoy is roadworthy and ready to more smoothly navigate around roadblocks, traffic jams, and adverse conditions by having more data at your fingertips. Do this by getting to know the app-specific analytics systems you already have available, and consider investing in a standalone service.