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A beginner’s guide to customer experience analytics

10 min read
What are customer experience analytics, and how can you use them to improve your business? Read on to understand the benefits of using CX analytics and why it’s the future of CX management.

What is customer experience analytics?

Customer experience analytics is the process of collecting and analyzing customer data, with the goal of better understanding customer needs, viewpoints, and experiences with your products and services. It can help you to increase customer engagement and customer loyalty, understand and improve your customer journey, and direct your internal teams to take action on issues that are affecting satisfaction and loyalty.

Learn about Qualtrics Omnichannel Customer Analytics software

What data does customer analytics use?

Customer experience analytics takes into account all the components of customer experience, including results from both direct and indirect feedback data sources.

Direct feedback customer data – which has been solicited from the customer –  might include:

Indirect feedback customer data – which has been collected as a result of customer interactions, but hasn’t been solicited directly from the customer – might include:

Learn more about indirect feedback here

Knowing what feedback to collect and when is important. Customer experience analytics offers you an overview of all your data, helping you to see trends, spot pain points, and opportunities, and take action to improve customer sentiment and create great customer experiences.

Why is customer experience analytics important?

Gathering as much data from your customer interactions is important because it gives you more power to improve your customer experience:

The benefits of customer experience analytics include:

  • Helping you to map out the customer journey more effectively
  • Meeting customer needs that they may not have expressed directly to you
  • Indicating where issues lie and the drivers behind them
  • Understand the impact of those issues or opportunities, and what will happen as a result of your actions
  • Seeing trends and patterns and connecting them to customer touchpoints
  • Removing silos between departments to give everyone a comprehensive view of the entire customer journey and each team’s effect
  • Removing the guesswork of knowing which actions will have ROI

Not only do your customers benefit from having a more personalized, smoother customer experience, but your business benefits. With customers feeling like their voice is heard, with experiences that match and exceed expectations, they’re more likely to buy into your products and services. This is important, too. According to our research, 63% of consumers say businesses need to do a better job of listening to feedback.

It’s an “outside-in” approach to taking action, getting as much feedback as possible before taking strategic steps with maximum impact to improving your customer experience.

How do you use customer experience analytics?

Customer experience analytics use cases include:

1. Personalize experiences

Creating effective segments for your target audience and understanding what they respond well to is a key part of customer experience analytics. The more personalized the customer experience and customer journey, the better.

Customers have preferences that sometimes aren’t clear to brands. If you only ask about what you know, instead of gathering all the data on your customers that you can, you might be missing out on key opportunities.

For example,  L.L. Bean’s outdoor gear might not immediately be associated with gardening – but using customer segmentation through our customer experience analytics solutions meant that they were able to get unique insights into this unexplored interest.

Their new segment – outdoor family enthusiasts – was developed and researched using customer experience analytics. The company found that gardening was the top activity for this segment during spring – meaning they could push spring products that were more personalized to this audience for a better ROI.

Read the full case study here

2. Reduce customer churn

If the first inkling that your customers aren’t happy only becomes clear when they leave, your brand has a serious problem on its hands. Customer relationships shouldn’t just be measured in customer churn. Your teams should be able to see trends that indicate customers aren’t happy and be able to pinpoint the source.

Electric utility company ComEd had been diligently following the first two steps – collecting customer feedback and measuring it – since 1991. However, their customer satisfaction reached a low point in 2012, and it wasn’t improving.

Using Qualtrics’ customer experience analytics solution, the ComEd team was able to move from measurement to management. They understood through driver analysis that billing statements were a pain point, and revamped their user experience as a result. Taking action backed by data meant that there was a clear ROI, as customer engagement improved.

Read the full case study here

3. Increase repurchase rates

Getting your customers on board is only half of the battle – encouraging them to repurchase is important for increasing customer lifetime value.

BMW’s global customer satisfaction program, started in 1985, wasn’t effective in helping its teams to encourage repurchases. Despite three decades of gathering customer feedback, the ROI wasn’t clear.

Using Qualtrics’ customer experience analytics solution, the team reworked the program into a two-question survey to measure NPS and open text responses. This allowed BMW’s employees to effectively close the loop with customers, respond to comments in 24 hours, and resolve issues within 5 days. This elevated customer service led to repeat customers and increased ROI.

Read the full case study here

How to get ROI and increased customer satisfaction from your customer experience analytics

Many brands struggle to take the CX data they collect and transform it into actionable insights that they can give to their teams to improve the customer journey. Teams are often overwhelmed with data but don’t know how to understand it or use it effectively.

It can often feel like investing in the collection of customer feedback is a wasted effort – but there are ways to get ROI from your customer experience analytics.

The issue is that collecting the data is only part of the process. Ideally, the steps you take are as follows:

  • Collect customer data as expansively as possible from various data sources
  • Measure the data against metrics and benchmarks
  • Turn the data and measurements into actionable insights and then make sure the right teams see the right insights quickly so they can act on it
  • Manage your customer relationships

Many businesses stop at the first step. Customer experience analytics is the second – taking your raw solicited and unsolicited customer data and transforming it into measurements and benchmarks so you can track your improvements.

Helping your team to understand the actions to take is made easier by using customer experience analytics. You’ll be able to trace pain points to their source and give your team specific steps to take to rectify problems. Building out your customer journey is simpler when your teams can see where issues are occurring through more than one customer feedback source.

Equally, you can repeat successes and plan more effectively for future endeavors; automating flows, training customer service agents, and developing new products and services. Using analytics platforms makes the entire process easier, automating simpler tasks and giving you a comprehensive view of the full customer journey.

The ROI of customer experience analytics

Managing your customer relationships and developing customer loyalty is simpler when you know what your customers want, and how they want to interact with you. You’ll be able to see the financial effect of actions you take and adjust your strategy accordingly.

This is how you get the return on investment for your efforts. Your customer experience for relationships new and old become stronger when your CX is personalized, efficient, and exceeds expectations.

Using customer experience analytics to actively manage customer relationships

Customer experience management is the way forward for improved customer experience. It’s not enough to just collect customer data and call it a day – you need to actively manage your relationships to ensure your customers continue to buy from you.

Our customer experience analytics solution offers you real-time insights into customer behavior and customer engagement. No matter your goal – customer retention, higher CLV, increased advocacy – customer experience analytics can help you to understand what steps to take when you receive customer feedback, and see the results of your actions in real-time.

Learn about Qualtrics Omnichannel Customer Analytics software