Customers remain one of the driving forces of any business, and they determine whether or not a business thrives. With customer behavior analysis, understanding how customers behave towards a product or service becomes easy and achievable.
This article aims to establish a clear understanding of what customer behavior analysis is, show businesses why it matters to them, and explain the different methods of analysis they can use. It will also cover a step-by-step process companies can follow to conduct the analysis and some analytics tools they can use.
In the end, you, as a business owner or someone in management, should have the right tools to make the right decision for your business to thrive the way you want.
What is customer behavior analysis?
Imagine looking at a map that shows how people act when they come in contact with a product or service they want to purchase. The actions that each customer will take towards the product or service of interest will differ. Analyzing their behavioral differences will provide insights to the reason behind their actions. This is what customer behavior analysis (CBA) is about.
It involves analyzing what customers like and don’t like, their buying patterns, and what influences their decision-making processes. With this information, businesses can gain valuable insights from customers that they can use to provide better offerings while improving their overall customer experience.
Why Does Customer Behavior Analysis Matter in Business?
While analyzing customer behavior is something that every business should consider, one question that should be asked is, “Why?” Why does it matter? This section will explain why you should take customer behavior analysis (CBA) seriously. Some of the many reasons include:
1. Customizing your Products or Services
Your business exists because it is satisfying needs of customers. Hence, it is important that you know what your customers’ preferences are. They will help tailor your products or services to meet their needs,.
For instance, if you run a restaurant offering certain kinds of dishes, and you discover that some of your customers demand certain dishes you don’t serve or would prefer a certain way to serve their meals.
You’ll have to meet those needs as a good business owner or manager by customizing your products and services to meet their preferences.
2. Coordinating Effective Marketing Strategies
Another reason for customer behavior analysis is that the information you get from the analysis will help you coordinate marketing strategies that can produce results.
In a business, when you advertise products or services, it should yield results. Still, when it doesn’t, there must be a reconsideration and implementation of marketing strategies that work. By understanding the behavior of your customers, marketing to them becomes effective.
3. Improving Customer Experience
Reed Hastings, co-founder and CEO of Netflix said,
The customer’s experience is the most important metric.
This quote goes a long way toward showing that customer experience is an important factor in a business’s pursuit, especially for those who intend to thrive. Similarly, Shiv Singh, an Indian-Punjabi artist, said that,
the purpose of a business is to create a customer who creates customers.
It’s all about giving one customer a satisfactory experience who goes on to tell others how much they loved your services. The better your customer experience is, the more customers you’ll get, period!
Read also: Customer experience specialist: The complete guide (2025)
4. Making Strategic Decisions
Decision-making is one of the most rigorous activities to engage in because it forms the basis upon which every business outcome lies.
Having the analysis of customers’ responses to your products and services at your disposal makes it easy to make very strategic decisions like scaling, product development, market positioning, and allocation of resources, which contribute to the long-term success of your business.
5. Securing Competitive Advantage
It’s no longer news that other companies offer products or services similar to your business. Hence, securing a competitive advantage over them will rely on how much information you have about your customers.
This allows you to meet their immediate needs and stay trendy to offer what they may not know is available. Therefore, to stay competitive, you must think outside the box and stay ahead.
Methods of Customer Behavior Analysis
There are several methods of analyzing customer behavior, but they all fall into two main categories:
1. Quantitative Methods
Using quantitative methods of analyzing customer behavior entails collecting and analyzing numerical data from customers to understand their patterns and how they relate statistically. It has to do with any variable that can be measured. If the analysis can be given a figure, then it is quantitative.
An example of a quantitative question is: On a scale of 1 to 10, how satisfied are you with our product? With statistical analysis tools, you can determine the average satisfaction score, which can help you understand the trends in their responses.
Some of the techniques of customer behavior analysis under this category include:
i. Use of surveys and questionnaires
Surveys and questionnaires can gather numerical data to provide statistical insights into customer preferences and behaviours.
ii. Analytics tools
Tools are used to analyze large data sets, like websites and apps. These tools can help you identify customer behavior patterns and trends, providing statistical information that enables you to make data-driven decisions.
iii. A/B testing
This involves comparing two versions of a particular product or a webpage to see which performs better from your customers’ perspectives. Moreover, the numerical data you gather can help you improve the products or services you offer.
2. Qualitative Methods
Qualitative methods of analyzing customer behavior cover every other piece of information you can gather from a customer that does not involve numbers.
It gives a better understanding of the context of your numerical data. In addition, it gives you insight into customers’ motivations, attitudes, and behaviours, which gives meaning to their actions.
An example of a qualitative question is: Can you tell me about your experience using our product? By analyzing different responses, you can identify the pattern in their narratives. This is what qualitative analysis is about.
Some of the techniques for qualitative methods of customer behavior analysis include:
i. User Interviews
This involves speaking with your customers directly to understand their thoughts, feelings, and experiences with your products.
Doing this will provide the necessary information about what motivates them towards your products or services and what you can do to improve.
ii. Using cohort groups
Bringing a small focus group of customers together to discuss their thoughts and experiences with your products can provide you with shared opinions and a deeper level of their perception. This gives you insight into the quality of their experience with what you offer.
iii. Mapping customer journey
It is a detailed mapping of a customer’s steps from first contact with your product until they make a purchase. This explains the whole journey of a customer experience. By analyzing this information, you can improve on specific areas that make your customer experience delightful.
How to Conduct Customer Behavior Analysis Effectively
The reliability of the data you obtain from customers depends on the effectiveness of how you conduct customer behavior analysis. Here are ways you can effectively do so:
1. Map Out the Customer Journey
You need to map out your customers’ journey, from when they discover your business to after purchasing a product. The journey could include a visit to your website or social media interactions, product research, and when they purchase. Understanding these touch points in the journey will lead to the next step: customer segmentation.
2. Break your Customers into Segments
At this point, it will be wise to break your customers into segments based on demographic analytics. Where are your users visiting from? How old are they? What professions are they in? What media do they consume?
In addition, you can investigate the types of social media space are they in, where else do they buy stuff, and how found you? Furthermore, you can evaluable the timeframe from discovery to purchase? When you’ve successfully separated your customers into these segments, the next step is crucial.
3. Identify Selling Points for Each Segment
In this step, you need to know why your customers are making making purchases (even if it’s what you’ve always wanted). Understand the motivations behind the actions they take concerning your products. By digging into the details, you’ll have better insights on the selling points of each segment you have identified.
4. Gather Sufficient Data
When you’ve identified the selling points of each segment, you need to consider the numbers. How much information can you get from your customers?
You need to gather sufficient data from anywhere that can provide useful insights. This means you don’t have to restrict yourself to the information you obtain from Google web analytics. Go beyond there, search for and gather every piece of useful data you will need to help you understand your customer’s behavior.
5. Compare the Numbers with Qualitative Data
With all the needed quantitative data at your disposal, it’s time for comparison. You need to compare the numbers with the qualitative data you’ve obtained through user interviews, cohort groups, and observations.
Do they tally? If they don’t, you must ask further questions or redo the process. Comparing these sets of data will provide you with insight into the areas that are worth focusing on.
6. Make Adjustments and Keep it Ongoing
With the result of the analysis you’ve conducted, you’ll need to make adjustments to areas that needs them.
For instance, your analysis revealed lapses in customers’ interactions and access to your products. You’ll have to make necessary adjustments to that area ensuring that customers have better access to your products. Also, have it in mind that customer behavior analysis is not a one-time thing; hence, you must keep it ongoing.
Customer Behavior Analysis Tools
Different tools are used to analyze customer behavior, ranging from analytics platforms to tools for obtaining customer feedback. Here is a list of some of the tools you could try:
1. Google Analytics tools is useful for tracking website and app analytics, user behavior, website traffic, and conversion metrics.
2. Hotjar is an analytics tool that shows survey and session recordings. It also visualizes interactions with your website, providing information on the number of clicks, scrolls, and user behavior.
3. Mixpanel is designed for product analytics focusing on user action.
4. Others include Hubspot, Salesforce, Zendesk, and UserTesting.
The choice on which tool to use depends on the purpose, hence, ensure you utilize the proper analytics tools that meet your set objectives.
Conclusion
This article has been about understanding the importance of customer behavior analysis in the business world. The analysis methods, how to conduct it, and the tools that can be used have been discussed in practical terms.
However, stopping at this point of knowledge without application may not be the best when your business is concerned. Hence, it’s time you changed the narrative of your business this year by taking the bull by the horns.