Pandemic Heightens the Need for Analytics
Digital data ingestion, cross-team alignment on customer journeys, and help with customer analytic tools are essential for companies seeking to understand customer behavioral changes during the COVID-19 pandemic, according to a new report by Forrester Research.
Companies need to focus on analytics to uncover customer insights, Forrester principal analyst Brandon Purcell says in the report. “Even during periods of relative stability, customer analytics is necessary for companies that wish to understand customer behavior at a granular level.”
The focus on analytics is even more critical during the pandemic, though, Purcell says. “The need for customer analytics to detect and adapt to changes in customer behavior is imperative. Since resource-constrained customer insights pros are being asked to do more with less, it is critical to prioritize the right types of analytics during this time.”
Purcell recommends that companies focus far less on location-based analytics because few consumers are traveling, and those who do are making trips quickly, so tracking their location has very little value.
Instead, companies should focus on customer journey analytics, text analytics, and speech analytics.
“During the pandemic, the customer will increasingly engage you through digital channels,” Purcell says. “To measure this shift in behavior, use customer journey analytics.”
Those analytics will enable organizations to identify which customer journeys are the most prominent. Knowing this will enable companies to prioritize fixing points of friction for their best customers, according to Purcell.
Additionally, software vendors that offer journey analytics were seeing good increases in business as customers shifted almost exclusively to digital engagements during the lockdowns across most of the country.
However, according to Forrester, only 58 percent of companies use digital data sources in their customer journey analytics. The other companies have blind spots in what is becoming an essential part of the customer experience and will likely continue to be one even after the pandemic passes.
Even before the pandemic, customer journey analytics, if done correctly, could result in strong returns, Purcell concludes in the report.
Bank of Montreal, for example, set out to understand the impact of negative micro-journeys (like resetting a password or disputing a bill) on macro-journeys (such as buying a home). It found that customers on a negative micro-journey were four times less likely to complete mortgage applications, according to Purcell.
Similarly, it’s important for companies to rethink their predictive models any time there is a huge shift in consumer behavior, Purcell says. Consumer behavior shifted sharply in the second half of March, when area lockdowns began, and that required predictive models to be re-evaluated.
“Predictive models assume that the future will resemble the past. In the new world of COVID-19, that obviously isn’t the case,” Purcell says. “Companies that are performing churn analysis, product propensity analysis, and customer lifetime value analysis will have to refresh these models with new training data.”
Another change is that the highest-value customers today likely look quite different than they did a month or two ago. Product recommendation models, therefore, will require a refresh as shoppers prioritize essential and nonperishable goods. Amazon continually refreshes its recommendation models to account for shifting buyer behaviors and product catalogs.
Purcell recommends that companies listen to customers and respond to their changing emotions, attitudes, and values, which is where text analytics and speech analytics can be particularly helpful.
“Text and speech analytics are more accurate and insightful than ever before thanks to advances in deep learning,” Purcell says. “Leverage these tools to sift through internal customer feedback data as well as external data, such as social media, to decipher emerging issues and respond to changing customer sensitivities.”