6 Types of Customer Analytics and When to Use Them

Jun 05, 2024

Let’s be honest — are you truly making the most of the vast customer datasets you’re sitting on? From marketing engagement and firmographic details to product usage insights and support records, you likely have a wealth of data on how your customers behave and engage with your brand.

But most companies aren’t leveraging even a fraction of the customer information at their disposal. Data silos and inefficient bottlenecks means teams are often left with blind spots, unable to gain a cohesive view across the entire customer journey.

That’s a huge oversight, because understanding your customers’ end-to-end needs and behaviors is pivotal for driving real product-led growth.

McKinsey found that data-driven organizations adept at operationalizing customer insights outperform peers by 85% in sales growth and over 25% in gross margins.

To drive results at this level, teams need an integrated approach that blends different types of customer analytics to connect the dots across different stages of their journey — from acquisition to engagement, retention, churn, and lifetime value.

In this article, we’ll talk you through 6 customer analytics types that are essential for improving your customers’ experience. We’ll show you how to combine customer insights to pinpoint opportunities for growth and customer delight that move the needle on your business goals.

Ready to eliminate data silos and empower truly unified customer analytics across your organization? Contact us to learn how NetSpring’s warehouse-native platform delivers self-service access to rich insights across the full customer journey.

Why customer analytics matters

Let’s start by defining what we mean by customer analytics.

At its core, customer analytics is the practice of leveraging data to gain a deeper understanding of your customers’ needs, behaviors, motivations, and journeys. It encompasses several key types of analytics.

These include:

Descriptive analytics, which focuses on understanding customer behaviors and patterns by exploring historical data. This might include analyzing product usage data, acquisition sources such as marketing channels or campaigns, support interactions, and overall purchasing trends.

Diagnostic analytics, which helps you identify the root causes behind observed customer behaviors. Techniques include cohort analysis (comparing user behaviors across different geography/acquisition/plan slices), and journey mapping to visualize paths and dropoff points, funnel analysis to pinpoint barriers in conversion flows.

Predictive analytics, which is all about forecasting future customer actions, risks, and opportunities by building statistical models from current and historical data. Common use cases include predicting customers at risk of churn, projecting customer lifetime value, and modeling customers’ propensity to convert, expand their subscription, or upgrade.

Prescriptive analytics, which leverages insights (usually through machine learning) and recommends specific actions to drive desired customer and business outcomes. These might include optimizing marketing spend, boosting activation of key features, or triggering customer health outreach to reduce churn.

Why customer analytics are mission-critical

In today’s experience economy, customer analytics isn’t just nice-to-have — it’s an absolute imperative for any organization striving for sustainable, product-led, user-centered growth.

Let’s look at why.

Smarter, evidence-backed decisions
With rich customer insights, teams can optimize strategies for customer acquisition, onboarding, adoption, engagement, retention, and expansion based on hard data rather than hunches.

Identify high-impact product opportunities
Analyzing customer feedback and behavior patterns helps you to prioritize the most impactful forms of innovation, optimization, and personalization when it comes to products.

Improve overall customer experience
The best customer analytics help you understand the full, multi-channel customer journey. This means you can identify sources of customer friction as well as delight — and fix them by improving UX flows, support, onboard, in-app messaging, and more.

Increase marketing effectiveness and conversions
Mapping the full customer journey from initial interest and lead capture through to conversion and expansion lets marketing teams improve campaigns and effectively segment and nurture high-value customer groups.

Proactively mitigate churn risks
Monitoring user behavior, sentiment, and customer health shows you threats and lets you take prompt action with targeted customer success inventions.

Align customer goals to business metrics
By tapping into data spanning the entire customer lifecycle, teams can rally around aligned, revenue-impacting goals and KPIs that measure the impact of acquisition, adoption, retention, and expansion initiatives.

Ultimately, the key is using customer analytics to get a 360-degree view of your customers’ needs, experiences, and outcomes across every stage of their journey. This level of understanding can only be achieved by unifying multiple data sources, from marketing channels and product analytics to billing systems, support records, and voice-of-customer insights.

This is why the emergence of modern, warehouse-native customer analytics platforms has been so critical. Next-gen customer journey analytics tools like NetSpring empower organizations to eliminate data silos and gain a truly unified perspective across the entire customer lifecycle.

By drawing directly from your data warehouse, platforms like NetSpring lets you bring together product use, marketing systems and CRMs, billing platforms, customer support, and more for more powerful analytics without data duplication or fragmented event streams. NetSpring’s self-service solutions eliminate technical bottlenecks, letting product, marketing, and customer experience teams easily visualize customer data, slice, dice, and pivot between views, and go deeper with ad hoc exploration.

6 Essential Types of Customer Analytics for Data-Driven Growth

Understanding your customers at a granular level through analytics is the foundation for driving sustainable growth.

While the particular customer analytics you’ll need to prioritize depend on the unique needs of your business, you’ll want to combine a variety of types to get a full picture.

Use this guide as a framework for channeling your customer data into a comprehensive view that helps you optimize every stage of their journey.

1. Customer acquisition analytics

Customer acquisition analytics focuses on understanding how customers first discover and engage with your brand across a range of marketing channels and campaigns, helping marketing and growth teams optimize their acquisition strategies. It involves analyzing data from web and marketing analytics tools, paid media campaigns, SEO and content performance, sales intelligence platforms, CRMs, and more.

Core customer acquisition metrics to measure include customer acquisition costs, conversion rates, number of prospect interactions, branded search volume, lead capture rates, marketing qualified leads, and sales accepted leads. But for truly effective customer acquisition analytics, you’ll also want to understand downstream metrics like customer retention rates, customer lifetime value, and net revenue retention by acquisition source.

This complete view makes sure you don’t only see acquisition as a numbers game — but a matter of acquiring the right high-value, sticky customers who will drive long-term growth.

Doing effective customer acquisition analytics involves:

  • Using funnel analysis to understand how different lead sources convert through the funnel at varying rates and impact metrics like CAC.
  • Identifying drop-off points and areas of friction in your customer nurturing flows
  • Surfacing patterns to understand which campaigns and content drive initial interest and engagement from your ideal customer profiles.
  • Building predictive models to score lead quality, buying propensity, and likelihood of becoming a loyal, high-value customer.
  • Measuring which acquisition touchpoints yield the most and highest-quality customers, looking at immediate conversion rates and downstream retention/expansion.
  • Analyzing specific cohorts based on attributes like lead source, persona, and company size — and slicing and dicing customer segments to identify patterns in downstream metrics.

To truly understand customer acquisition, you’ll need an integrated, 360-degree view that ties acquisition metrics to downstream product adoption rates, customer health indicators, retention trends, expansion revenue, and customer lifetime value. Using modern, warehouse-native data analytics tools lets you explore this full customer lifecycle data together.

2. Customer engagement analytics

Customer engagement analytics is all about getting insights into how customers interact with and derive value from your product or service after they convert. It involves exploring user behavior data from a range of sources like product analytics, digital experience tools, customer support systems, in-app messaging, and more.

Core metrics to track include product usage numbers; stickiness indicators like daily/monthly active users; features adopted; average session lengths; support ticket volumes; net promoter scores; and overall engagement levels over time. But effective engagement analytics goes beyond topline measurements, looking to deeply understand why customers behave certain ways and how to drive adoption and optimize their experiences.

Key aspects of customer engagement analytics include:

  • Analyzing user flows and funnels to understand how customers navigate your product and discover/adopt different features, identifying any areas of confusion.
  • Checking the optimal user pathways and specific “aha” moments that predict customer activation and retention — tying product usage patterns to downstream markers like repeat purchases, expansion revenue, and customer lifetime value.
  • Segmenting user behavior to better understand cohorts based on their stage in the product journey, subscription type, etc, and tailor the customer experience accordingly.
  • Collecting and interpreting qualitative customer insights from surveys, product reviews, support interactions, and more.

3. Customer experience analytics

While customer acquisition and engagement provide important lenses, true optimization requires an end-to-end view of the complete customer journey. Customer journey analytics maps every touchpoint of the overall experience from initial brand discovery through conversion, onboarding, adoption, support, retention, expansion, and beyond.

You’ll want to aim for key metrics such as high customer satisfaction (CSAT), loyalty, and retention rates; strong net promoter scores (NPS); and low customer effort score (CES) — how much difficulty a customer experiences when trying to achieve a goal or resolve an issue with your product or service.

Analyzing the customer experience should also involve listening to voice-of-customer (VoC) feedback. The best analytics let you connect customer and business data to understand how specific customer experiences affect business outcomes like product adoption, engagement, revenue, and more. For example, let’s say you want to drive expansion revenue from existing customers. You could drill down into positive vs negative CSAT scores alongside account usage, health scores, and billing data — maybe finding that poor CSAT ratings are linked with a frustrating UX indicated by high dropoffs in the flow, or even billing issues, such as not offering an automated Paypal option. These kinds of self-service business analytics insights give you a head start on addressing the root cause.

For powerful customer experience analytics:

  • Combine quantitative metrics like CSAT, NPS, and CES with qualitative data from customer feedback, support interactions, and social media listening.
  • Segment customers based on their experiences and check differences across segments to tailor experiences.
  • Analyze customer sentiment and emotions in the feedback to understand the underlying drivers of positive and negative experiences.
  • Use session recording and heatmapping tools to visualize customer struggles and identify UX issues.
  • Analyze customer effort scores at each journey stage to pinpoint high-effort areas that need process improvements.
  • Map the complete end-to-end customer journey across all touchpoints and channels to identify pain points and areas of friction and understand how their experience evolves across the customer lifecycle.
  • Link customer experience metrics with downstream metrics like customer retention, lifetime value, and revenue to understand business impact.

The more you have the right customer data – data that is contextually relevant and is consolidated and accessible to be used at the right time – the better the experience will be for your customers. But it’s not just enough to have the right data, you’ve also got to have the tools (such as customer data platforms to create a single view of the customer, journey analytics, and predictive and prescriptive analytics tools and capabilities) to understand, learn, adapt, and power all customer touchpoints, the technology (such as geofencing, facial recognition, and biometric sensors), and the people to apply the data in a relevant and contextualized way.

4. Customer journey analytics

As we’ve suggested, the full customer journey should be at the heart of all of your analytics efforts. But it’s important to specifically analyze the customer journey end-to-end, looking to find areas of customer delight as well as friction points at every stage, from initial awareness through acquisition, onboarding, adoption, engagement, retention and advocacy.

Important metrics that give you a sense of your customer journey include lead conversion rates across top/mid/bottom of funnel stages; product activation metrics like key feature adoptions; “aha” moments and user stickiness signals like session time; and customer lifetime value (CLV) and revenue expansion metrics.

Tips for meaningful customer journey analytics include:

  • Using warehouse-native tools to run unified analytics using data from multiple streams, from marketing, sales, product usage, support systems, voice-of-customer sources.
  • Slicing journeys by segment and analyzing specific cohorts based on plan type, use case, industry and more.
  • Applying funnel analysis across each stage to identify dropoff points, barriers, and key conversion moments.
  • Enriching your analysis with voice-of-customer feedback that adds qualitative context on different stages.
  • Mapping customer behaviors and journey stages to downstream metrics around activation, adoption, churn, lifetime value.
  • Using machine learning to identify and prioritize impactful journey optimization opportunities.

5. Customer retention/churn analytics

It’s crucial to understand the factors driving customer churn so you can proactively prevent them and uncover opportunities to improve retention and customer lifetime value.

The main metrics to focus on here are churn rate and retention rate, but it’s also helpful to think about customer lifetime value, net revenue retention, and keep an eye on product usage metrics that could indicate churn risks, like drops in daily active users or low feature adoption.

For full visibility on retention and churn drivers:

  • Analyze overall churn rates as well as rates segmented by customer attributes like plan, industry, etc.
  • Identify behavior patterns and usage metrics like low adoption that are predictive of future churn.
  • Implement customer health scoring to monitor risk signals and trigger proactive outreach.
  • Use an analytics platform that offers automated alerts at certain churn risk thresholds so you’re always in the loop.
  • Run churn surveys and analyze VoC data to surface root causes behind cancellations or downgrades.
  • Measure the effectiveness of customer retention programs like winback campaigns and loyalty incentives.

6. Voice of Customer Analytics

To deeply understand customer needs and preferences, you’ll need to capture and analyze feedback, opinions, and sentiments from various channels.

Truly listening to your customers’ voice can help you pinpoint areas for improvement and increase satisfaction, loyalty, and brand advocacy.

For voice-of-customer analytics that drive action:

  • Collect VoC data from a wide range of channels, including surveys, customer interviews, product reviews, social listening, support transcripts, etc.
  • Use natural language processing and sentiment analysis to analyze feedback at scale and get a pulse on how your customers are feeling.
  • Prioritize the most urgent VoC feedback based on your sentiment analysis and the impact severity, and prevalence you find.
  • Connect your VoC insights with quantitative data on product usage, operational KPIs, financials, etc.
  • Implement closed-loop processes to ensure customer voices are promptly addressed.
  • Analyze VoC trends over time to identify changing needs and emerging opportunities.
  • Segment VoC by customer attributes, industries, use cases for targeted insights (B2B).

Unlocking Richer Customer Insights with Warehouse-Native Analytics

Developing a truly customer-obsessed culture requires a comprehensive, data-driven approach that brings together different types of customer analytics — and empowers teams to get the most from the data.

Here’s how Brian Balfour, Founder, and CEO at Reforge, puts it:

“As you gain fresh insight from your data, it opens the door to new questions. As you have new questions, you need to update your instrumentation and analysis. Saying the process is ‘done’ is saying you understand everything there is to know about your users, product, and channels.”

That’s why you need powerful, warehouse-native tools like NetSpring in your corner. NetSpring empower teams to keep asking new questions and going deeper with ad-hoc exploratory analysis across different data streams.

By tapping directly into your cloud data warehouse, NetSpring eliminates data silos and provides a unified, 360-degree view across all the key touchpoints on your customers’ journeys.

With NetSpring’s self-service capabilities, cross-functional teams can slice, dice, and pivot between any dataset without technical bottlenecks. Ad hoc analysis tools allow you to keep peeling back layers, testing new hypotheses, and uncovering fresh opportunities to optimize customer acquisition, engagement, retention, and more.

With NetSpring, you can overcome data silos and unlock the full potential of your customer analytics.

Don’t miss out on expert guidance for mastering customer analytics and optimizing your customers’ experience.
See how NetSpring can help you unlock insights from customer analytics to improve overall customer experience with a 14 day risk-free trial.

Getting started with NetSpring is easy.

Try for free

Sign up for a 14-day risk free trial. Be up and running in hours.

Explore pricing

Flexible plans to power your growth. Pay for value.