by Piyanka Jain, author of “Behind Every Good Decision: How Anyone Can Use Business Analytics to Turn Data into Profitable Insight” and President & CEO of Aryng.coom
As we are heading into 2022, we can see that start-ups are eventually embracing the challenges associated with the new normal. The global pandemic had changed a great deal of how entrepreneurship worked earlier. In the ongoing practical game of ‘survival of the fittest, competency is the only trait that would matter at the end of the day. Therefore, It is now time for entrepreneurs, especially the start-ups that are struggling with no foothold in the market, to self-actualize and re-assess the measures they opt to drive their success.
Well, why should you care?
If you think that your start-up is a great idea that could change the entire world, let me bring to your attention that there is now a fierce- talent war out there. The United States is the leading country by the number of startups (63,703) by a long shot. The second on the list is India, with just 8,301 startups, and the third spot is occupied by the UK, with 5,377 startups; customers’ sentiments drive customers, according to firstsiteguide.com as of 13th October 2021.
You better care because your ignorance could kill you. On the other hand, informed marketing decisions could transform you into a fast-growing start-up worth billions of dollars even before being listed on the stock markets. How does that sound?
Good!!! Doesn’t it?
Nevertheless, some businesses have already learned the fact and leaned into the implications of the momentum. They came up with innovative measures by leveraging the state where technology is standing right now. They are swearing by a magic sauce that sets them apart from their peers.
Great!! But what is the magic sauce?
They beat the odds by responding quickly to market changes. By the way, they acknowledge that markets are driven by customer sentiments. Therefore, they started relying on metrics/KPIs to delve deep into their customer buying behaviours. Scores of new start-ups are currently leveraging the e-commerce revolution for surpassing conventional gains with a particular emphasis on a well-rounded analysis of their customer personas. Knowing customer personas allows businesses to provide seamless, personalized, and efficient customer experiences that enhance both the acquisition and retention of customers.
Why is knowing your customers crucial right now?
Start-ups are constantly at the risk of failure right now, with the pandemic pushing consumers into saving mode. They need to act swiftly, change their game from time to time, from day to day, if need be, to accommodate themselves into the ever-changing business landscape. They should step up their game by studying the changes in their ‘consumer behaviours. They should understand what matters the most to their customers at a given point in time.
For example, the entire world has migrated to ‘digital’ during the pandemic to ensure ‘no contact.’ Therefore, digital presence has now become mandatory. Cautious, need-based spending is another post-pandemic norm. Meaning there is no room for fancy, low-utility products that people once used to create air around themselves. According to a survey titled “Covid19 and e-Commerce”, people aged 25 to 44 reported more robust spending than others. The same age group was more into investing prior pandemic.
Other studies reported that consumers had switched brands at unprecedented rates, and the need for hygiene transparency has become a priority.
The conventional definition of knowing the customer may not be relevant now as the post-pandemic research suggests numerous shifts in customer sentiment and behaviour across the sectors. A deep analysis of customer persona is the silver bullet that helps create a single accurate view of your customers. For example, It allows marketing staff to weave strategies around the psychological factors(anxiety and covid-fear) that drive customers to buy products.
Customers’ experiences with the organizations will immediately and permanently affect their loyalty to those businesses during a crisis. There is now an urgent need to understand the customers’ sentiments and treat them with empathy. It is possible only if you know your customers.
From granular monitoring of the consumer data to narrowing it down into segments, customer analysis plays a vital role in offering in-depth knowledge of customer behaviour. Thankfully, there are enough KPI metrics to let you know the whole nine yards of it.
This knowledge is pivotal to comprehend what kind of people will be interested in buying your products and where they can be found. You can then build personas around your customers and use them to personalize offers.
How can you know your customers?
Through customer analytics.
How does it help?
Customer analytics is essential to amplify returns by augmenting customer acquisition, retention, and upsell through calculated marketing moves.
Customer analytics helps in.
- Identifying high-value customers early on their journey with the business.
- Understanding their customers’ needs to ensure product-market fit.
- Classifying them into ‘value buckets’ based on their behavior.
- Predicting their future behaviors well in advance for driving engagement/growth.
How to know your customers through customer analytics
A few approaches to customer analytics are –
- Customer Segmentation: Aggregating customers based on their purchase behaviors.
- Acquisition Analytics: Understanding the best way to procure high-value customers at low acquisition rates.
- Habituation analytics: Identifying the customers moving through the funnel from a novice/new user to an engaged and retained user.
- Retention/churn analytics: Understanding when and why your customers churn to bridge the gap between customer expectations and your offerings.
- Upsell analytics: Understanding which new feature or product will be most useful to which segment of customers
- LTV Modeling: LTV is one of the most crucial KPIs that helps identify high-value customers in a business right from their first transaction. LTV Modeling helps optimize the Cost Per Acquisition (CPA).
Knowing customers – How XYZ inc. almost doubled its users in 3 years
You are more likely to find start-up success when you know what your customers currently want. Let’s understand it through an Aryng client case. XYZ Inc is a cab aggregator and food delivery company that serves 250+ cities worldwide. It has been named the fastest-growing start-up for many years in a row. Significantly, after the first lockdown, it added many extra features to its existing model to make the best out of the need for social distance and grew its profits by leaps and bounds (through most beneficial Upsell Analytics).
XYZ inc.’s natural USP is its personalized services. The key to its success is its focus on targeting a specific audience. It offers its services through an app. The company researched its customers thoroughly. Its target customers were above 21 years of age, and it segmented its customers depending on whether they accessed mobile or desktop (through Customer Segmentation). It also used location-based targeting to reach its potential customers in cities that were its priority markets. All the company’s discounts/ referrals/ coupons have also been personalized based on the customers’ geographic, demographic, psychographic, and behavioral aspects (through Habituation and Acquisition Analytics).
XYZ inc. also offers a wide range of vehicle choices to cater to various segments of customers, including loners, families, budgeted, and luxury lovers for further sophistication. The founders actively leveraged technology, science, engineering, and information to acquire and retain their multi-million customer base. The right marketing mix and operational strategies drove XYZ Inc.’s growth from X million users in 2015 to 1.95X million MAU in 2021 (via LTV Modeling and Retention Analytics). The companies are currently foraying into the electric scooters’ arena with an overwhelming response for pre-booking.
If XYZ can do it, so can you. The first step is organizing your team around your top KPI – hopefully growth and profit and inspiring them to improve those metrics using Customer Analytics. All the best!
A highly-regarded industry thought-leader in data analytics, Piyanka Jain is an internationally acclaimed best-selling author of “Behind Every Good Decision: How Anyone Can Use Business Analytics to Turn Data into Profitable Insight” and a frequent keynote speaker on using data-driven decision-making for competitive advantage at both corporate leadership summits as well as business conferences.