Customer Behavior Analysis — Increase Acquisition & Retention With Behavioral Data

8 min readSep 30, 2022

Are you ever feeling disconnected from your customers?

Perhaps you feel lost amongst a sea of stronger competitors and you cannot unlock growth for your company and yourself.

If this is the case and you are also running out of ideas to improve your marketing strategies or speak with potential customers, you will need a newer, more profitable approach.

Enter Customer behavior Analytics: The science of understanding your customers’ minds and then responding to them.

Humans are more than numbers in a report. It is impossible to translate customer desires into transactional KPIs.

Humans are an illogical species that make seemingly random decisions.

It is your job to understand the emotions and processes behind these purchasing decisions.

This is done by conducting a thorough customer analysis. You then apply your findings to increase your revenue and improve customer lifetime value.

Today’s article will discuss the methodology behind Customer behavior analytics and how it can be applied.

In the long term, conducting customer behavior analysis and using behavioral data can lead to smarter customer acquisition, better

It is essential to listen to your intuition in order for you and your business to be relevant in today’s highly competitive market.

Before you can begin your Analysis, it is important to understand the three factors that influence customer behavior.

These factors are not under your control, but they can be influenced by you when designing customer journeys or behavioral segmentation.

Customer Personality

Your customer base is made up of many people. Each one of them is as diverse as the next.

Some people will be impatient or choleric while others will be calm and respectful. Others will fall somewhere in between, while others may display completely different personality traits.

You can learn a lot from customers by analyzing their interactions with you and getting regular feedback.

Psychological Triggers and Responses

Your products and services may address the same need but consumers will express that need in a different way.

Understanding your customers and their triggers helps you build long-lasting customer relationships that are profitable and relevant.

This stage will determine how you package and market products.

Social Trends

Humans are social creatures and have an insatiable desire to be part of a group.

Each group has its own rules and fashions, whether we are talking about gardening, cooking, decorating our homes, or any other community.

Peer pressure, friend recommendations, norms, or cultural trends are all external factors that influence the decision of the customer to buy from you.

Trends are important to keep in mind and to respond quickly with marketing campaigns.

It’s time for us to examine the steps involved in a Customer Behavior Analysis.

Step 1 — Segmentation.

Segmentation of customers is essential at this stage, as you need to create customized acquisition and retention strategies.

However, not all companies are able to segment and apply the same approach to acquisition.

They prioritize quantity over quality and spend too much on acquisition while neglecting retention.

Segmenting your customer base should not be limited to demographics and online behavior.

Consider the recency, frequency, and monetary value of each group, and then segment your customers based on their importance to your business.

You can then quickly identify the MVPs within your customer base, the powerful customers, and the soulmates, and prioritize their experiences.

RFM Segmentation shows you which customers are at the highest risk of churning. It also identifies customers who are not a good fit and highlights potential customers.

Step 2 — Determine the benefits each segment sees.

And in other words, Why are they buying?

This step will allow you to determine what your customers want to accomplish with your assistance.

What is the primary benefit each group seeks? How can they communicate it?

Step 3 — Analyze quantitative data.

Quantitative data can be measured in numerical numbers.

You can track metrics such as how many clients you have acquired, their average time on your site, cart abandons, and average days between transactions.

Your zero- and first-party data are the goldmine that you have — because it pinpoints exactly what your customers do.

Step 3: You combine all data in one place and then interpret it with an analytical mind.

At this point, you’re looking for patterns or anomalies. Next, you can conclude based on what you have found.

Step 4: Look at the qualitative data.

Qualitative data can’t be measured, unlike quantitative data.

Qualitative Research can be done by conducting interviews or surveys with open-ended questions. This should allow your customers to express their feelings freely without any guidance.

Interviews should be conducted with people from all customer groups. You will get a more complete picture of your customer base than if you only listen to unhappy customers or power customers.

Step 5: Launch a data-driven campaign using the Analysis.

Segmenting, identifying needs and wants, as well as conducting qualitative and quantitative research, will provide insights that can be used to create opportunities for acquisition, retention, or nurturing campaigns.

These insights are now available to personalize customer experiences.

Your messaging, advertising channels, and campaign timing should be tailored to each customer segment.

You can quickly eliminate roadblocks and transform your customer experience department into an income center.

Step 6: Evaluate the Results

Now it’s time for you to analyze the results.

The testing period may vary depending on the changes made. You should be able to see results quickly if you created only a new set creative and then rolled them out in Ad campaigns.

You might need to wait to see the results if you make enterprise-level adjustments.

To determine the impact of your campaigns, consider metrics such as conversion rates, CAC, or CLV.

Monitoring the results is an ongoing task. eCommerce is fast-paced. There will be new players every month, if not daily. And there are always cultural shifts.

It would be a good idea to revisit your Analysis every so often in order to keep you informed about what is happening inside of your customers’ heads.

Customer Behavior Analysis

Buyers have hundreds, if not more, of choices when they need to fulfill their desires, satisfy their needs or move forward in their lives.

If you want to touch their hearts (and wallets), then you must understand the behavior of consumers and create relevant acquisition campaigns.

There is intense competition; prices are rising, and more people opt out of having their cookies tracked. These are all good reasons to go back to basics and make sure you are using your customer data well.

Customer behavior analytics also allows you to pre-qualify leads, right from the acquisition stage.

Your products and services may not be right for everyone.

Instead of trying to win everyone and get as many customers as possible, you can analyze customer behavior to identify customers with profitable lifetime potential.

These are the customers that every eCommerce company dreams of: They buy often, spend a lot on your brand, and refer you to their friends.

These customers are not lucky.

Complex data-driven decisions are behind retention and acquisition campaigns. Marketers and sales teams must analyze customer behavior and data before making these decisions.

Customer behavior analysis can provide valuable insights if done correctly.

· Identify common problems (or improvement opportunities)

Quantitative research uncovers anomalies in customer data. These anomalies can be viewed as patterns.

· Customers are churning in a specific geographic area

· After ordering a product, customers churn after receiving it

· After a certain amount of interactions, customers become cranky

Combine it with qualitative research and interview customers to find common problems that can be solved.

If customers are constantly churning at a particular location, your delivery service could be a problem. Products arrive too late, break down, or arrive missing.

This will allow you to move forward, change your delivery partners, and increase customer retention.

This is also true for reducing customer turnover. If you can identify the reasons customers leave, you can solve the problem.

· Customize the marketing strategies

Customers do not buy or switch products randomly. Customers either find a better product or something interrupts their daily routine.

Understanding what progress your clients are making will help you adapt your marketing strategy so that it is more relevant to them and more attractive to potential customers.

· Optimize messaging content & timing

You can predict when customers will buy again by using customer data such as buying frequency and recency.

You can then plan your upsell campaigns according to when a customer is likely to need them again. People don’t want to stack products. They want to move on and use them.

This need can be met by sending the right message at the right moment to the right segment of customers.

Every eComm business that is successful has a happy customer.

If you feel disconnected from your customers or lost in providing exceptional customer service and experience, behavioral data can help.

However, you can identify and fix your weaknesses by understanding how your customers perceive your brand.

Once word-of-mouth advertising begins to spread, you can reduce churn and gain more market share.

· Increase conversions

Data on customer behavior can reveal important information such as favorite channels, triggers, and brands.

You can avoid marketing products that are not right for you by aligning your marketing decisions with your data. Your audience might not be there just because Tik Tok has become trendy.

Customer data has the advantage of allowing you to stop relying solely on trends or gut feelings to drive sales. With your data, you can make intelligent decisions that will help you hit the bull’s eye.

· Increase Customer Value (CLV).

CLV is the key to eCommerce’s success. Slowly, businesses realize that relying solely on traffic and acquisition is no longer feasible.

Customers have different buying patterns and they expect you to respond quickly to their needs.

These needs can be met by customer journey mapping. It is your responsibility to analyze your data and determine your customers’ purchasing patterns.

Next, segment customers into multiple customer bases to create a unique customer experience for each segment.

These are the main pillars of CLV. Customer behavior analysis is right at the heart of them all.


It has always been crucial to identifying the types of customers you are. It’s important to understand your customers today.

· What is it that makes them want to buy your products

· What do they want to achieve with your products?

· What do they expect from you?

Be honest with them and exceed their expectations. To get more sales, it’s not enough to pretend customer-centricity.

It is about aligning all of your business to the lifecycle stage marketing stage, having every department gravitate towards customer experience, and putting the customer first.

The market share, loyal customers, and sustainable, predictable growth that eCommerce businesses desire are what wins.




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