In the past, behavioral analytics has allowed marketers to understand consumer habits for better targeted marketing. Today, it has expanded into processes, machines, and even global supply chains. Read on to see how your company can benefit from stronger behavioral analysis.
What is Behavioral Analytics?
Fundamentally, it’s about understanding what consumers do and how they act. Clear pictures of their behaviors mean you can make informed deductions about why they do what they do and how they might act in the future, given certain conditions.
Insights to Influence What Customers Do
In this sense, strong behavioral analysis enables marketers to make the right offers to the right customer segments at the right time. Think Amazon’s vaunted recommendation engines. Think microtargeting in political campaigns. Such capabilities are clearly a “best use” of behavioral analytics.
Behavioral Analytics Establish the Foundation of Customer Knowledge
Figuring out how customers think starts with knowing – with great confidence and accuracy – what they've done, and that’s the typical starting point for most. It must be said that a large proportion of companies still struggle to even recognize the John Q. Public from their loyalty program as the same firstname.lastname@example.org registered on their site as the same @jqpub who follows the brand socially.
Such clarity in customer profiling is a requirement for the basic transactional insight about who bought what, when and through which channels. It’s also essential to gaining an accurate understanding of which products and customer types are most profitable. And knowing why customers act as they do, which requires the correlating of multiple factors, and is of course the next step along the value curve.
Better Understand Customer Interactions and Dynamics
But behavioral analytics can be more than just tracking people. It’s also about understanding the interactions and dynamics between processes, machines and equipment, even macroeconomic trends, which may yield new learning into operational risks and opportunities. When combined with rich insights about consumer behavior, companies gain a more nuanced, detailed and accurate picture of where markets are headed. And that gives them a huge advantage in directing to proactive investments to seize the best opportunities.
The largest of those opportunities maybe market-facing or customer-centric, but supply chain improvements or other operational enhancements first discovered by behavioral analytics may also lead to worthwhile performance gains.
Behavioral Analytics in Action
- Financial services organizations leverage behavioral analysis to identify suspicious and anomalous behavioral patterns as a means to strengthen anti-fraud capabilities; they also link demographic data and traffic patterns to customer profiles to figure out where to locate branches and ATMs
- Retailers closely track customer pathing across channels – when, where, how frequently and for which transaction types do customers use various channels (including bricks-and-mortars stores); how they respond to email campaigns, mobile couponing or even television ads
- Communications providers enrich customer information with external sources and network usage patterns to gain better views of subscriber behavior – one European telco saw 40% cost savings from 360-degree views
- eCommerce players specifically test scenarios and track every click to understand why customers abandon shopping carts or otherwise leave “the funnel” before completing check out.
Behavioral Analytics Applications
Behavioral analytics has real applications beyond the realm of marketing and customer intelligence. There is sensor data that can track traffic patterns, for instance, leading to “smarter cities. It’s possible to know if cold storage chains have been broken or medications have been compromised during shipments. Such detailed and up-to-the-second views of goods moving across global supply chains are ultimately another flavor of behavioral analytics.
As with big data more generally, the issue isn’t whether companies have the data they need to do behavioral analytics. It’s more that they need to determine the optimal strategies to collect, manage and analyze in a scalable and accessible way. Gaining access to the right data enables better insights into how people – not to mention processes, equipment and other assets – behave.
It is important to note that big data leaders have long since deployed those strategies and established strong behavior analytics capabilities. It’s likely not a coincidence that such companies also tend to be market leaders.
Curious about how Teradata can help you?