Understanding customer journeys: The four limitations of traditional analytics tools
Companies have traditionally looked to improve customer experience by focusing on particular touchpoints. But it’s only when you look at a customer journey in its entirety across channels and over time, that real pain points - and therefore opportunities for positive impact - arise.
Customer journey analytics is a new approach that delivers by building a unified view of customers as they interact with your company across multiple touchpoints over time. It reveals the paths that your most satisfied customers take and uncovers the bottlenecks to a consistent and high-quality customer experience.
Why traditional analytics approaches often fail
Providing an exceptional customer experience is hard and tying it to tangible business outcomes is even more difficult. To quantify customer experience, you first need to develop a unified view of the customer as she interacts with your company across channels and over time.
However, companies are struggling to attain this goal using traditional analytical approaches due to four main limitations:
- Data integration is difficult and time consuming. Data exists in silos across different systems and traditional data integration projects typically take months.
- Scarcity of skills and resources. Analysing customer data in a practical and actionable way requires skilled data scientists, who are difficult to hire and typically have more projects than they can possibly complete.
- Lack of real-time customer analytics. Traditional analytical approaches provide a historical view, which is often invalid by the time it can be acted upon.
- Gap between data and insights. Data integration projects focus on unifying data without providing customer insights and a means to make them actionable.
Understand customer behaviour by thinking in journeys
To overcome these challenges requires a transformational approach to customer analytics that encompasses data integration, identity matching, behavioural segmentation, insight discovery and customer engagement. Simply drawing a customer journey map is not the answer. What is needed is an approach where real customer journeys are the language of analysis.
When it comes to journey-based analytics, traditional data analysis techniques fall short. Expressing customer behaviours using traditional analytics tools and approaches is awkward, difficult to debug, and challenging to communicate and document. In the end, they either take an exorbitant amount of time or can’t be executed at all.
As an analytics leader at an S&P 500 information management company, who used a journey-based analytics approach to discover three multi-million-dollar revenue opportunities, recently remarked: “Remember that analysis that formerly took us over two weeks to run? Now I can do it in an hour.”
How to improve customer experience using journey analytics
There are four primary ways that leading companies are using customer journey analytics to improve customer experience:
- Quantify what matters most to your customers. Customer journey analytics can pinpoint the drivers of customer satisfaction in a way that traditional analytics can not. Customer journey analytics enables you to measure the impact of customer experience on key quantitative metrics like revenue, churn, customer lifetime value, and others.
- Identify customer experience obstacles. Using customer journey analytics, you can find paths that lead to a desired action, as well as those paths that typically don’t lead to that action. This way, you will be able to determine which parts of the customer experience are working and which parts need to be improved by eliminating obstacles along the path to your customer’s desired result.
- Prioritise and act upon customer experience issues based on their impact. In today’s world, you need to discern and prioritise the important over the trivial, so you can focus on problems and opportunities that have the most potential to impact business results. By using customer journey analytics to identify the costliest failure points along the customer journey, you can better determine where to invest your time and money.
- Use customer experience to differentiate from the competition. An exceptional customer experience is best created by first understanding your customers’ real-world journeys and then engaging with your customers at optimal points along their journey using the most effective channel. Customer journey analytics can be used to glean insights that can improve customer experience and turn it into a point of differentiation.
A disciplined and effective customer experience measurement program is essential to understand which parts of the customer experience are working and which parts need to be improved. Customer journey analytics is a new approach to customer analytics that can pinpoint the drivers of customer satisfaction in a way that traditional analytics can not.
By linking customer experience to quantitative metrics, customer journey analytics enables you to focus on implementing changes that truly matter. It enables you to directly tie customer experiences to business outcomes, so you can improve customer experience while delivering on revenue, profitability and the other hard metrics on which you and your team are measured.
Steve leads the marketing team at Pointillist. Prior to Pointillist he was CMO and GM Products at TandemSeven. Earlier in his career, Steve was VP Marketing at AIR Worldwide, where he was the top marketing leader on a team that grew annual revenue 5x to more than $100M, and VP Products at Verbind (sold to SAS Institute). He speaks and writes...