Customer tracking is a way of understanding customers’ profiles, shopping habits, likes, dislikes and much, much more. It’s incredibly useful information: once you have it, you can give customers exactly what they want. Up until recently, third party cookies were a tasty source of data, but they’ll soon be off the menu. The good news is there are plenty of other ways of getting to know your customers. But first things first.
Why track customers?
Customer tracking helps you market your products or services more effectively. In an uncertain and competitive world, this isn’t a nice-to-have; it’s potentially game-changing. When you understand consumer behaviour, you can plan with confidence, better manage your resources, provide relevant information, personalise and enhance the shopping experience. And all this translates into wide-ranging benefits, from higher customer spend to greater customer loyalty.
To enhance customer experience
To get — and stay — ahead, brands must understand who their customers are and the end-to-end purchase journey. Then, they can fine-tune each touchpoint, spot any drop-off points and make sure that brand perception is optimised at every stage. There are multiple advantages to making customer experience the best it can be, and some of the stats are eye-opening. For example, a well-designed user interface could raise your website’s conversion rate by up to 200%, and better UX design could yield conversion rates up to 400%, according to Forrester Research.
What’s more, good customer experience leads to customers spending more and higher Customer Lifetime Value (CLV). They’re also more likely to give positive reviews and recommendations:
- Customers who enjoy positive experiences are likely to spend 140 percent more than customers who report negative experiences.
- Customers who enjoy positive experiences are likely to remain customers for five years longer than customers who had negative experiences.
- Customers are likely to mention a positive customer experience to an average of nine people, while they are likely to tell 16 people about negative experiences.
And to top it all, creating a better customer experience by tracking customers means you can be more efficient, too. Data-informed decision-making can help you predict what customers want more accurately, helping you focus your resources in the right place:
- Delivering positive customer experiences can reduce your cost to serve customers by up to 33%.
In short, when brands concentrate on customer experience, it has a significant impact on the bottom line. When they don’t, they have to compete on price. That can mean a race to the bottom and dwindling relevance – definitely not a good look.
To support personalisation
In the near future, CX will move onto a whole new level, with brands not just optimising the customer experience, but personalising it. In fact, McKinsey predicts personalisation will be “the prime driver of marketing success in the next five years”. This is where customer tracking technology will really come into its own.
There are big incentives for marketers to create bespoke, human experiences across the entire customer journey. McKinsey says: “Today’s personalisation leaders have found proven ways to drive 5 to 15 percent increases in revenue and 10 to 30 percent increases in marketing-spend efficiency—predominantly by deploying product recommendations and triggered communications within singular channels.”
While personalisation at scale is still considered a bit of holy grail, it’s getting closer and closer. With the help of cutting-edge customer tracking, organisations will soon know all about customers and engage with them in exactly the way they want.
To improve advertising performance
These days, tracking the success of digital ad campaigns is Marketing 101. As technology has evolved, there are more metrics than ever that you can follow to evaluate and refine your advertising. Impressions, clicks, ad spend and conversions are all must-watch stats if you want to maximise impact. Pay attention to analytics to get your campaign firing on all cylinders.
Why you need to think about customer tracking now
In the past, cookies were the go-to tech for following customer behaviour. But, with data privacy a serious concern, third party cookies have been blocked by tech giants including Apple, Microsoft and Mozilla. Google is set to do the same in 2023 for its Chrome internet browser. That’s good news for consumers, but bad news if you’re a marketer relying on cookies to collect valuable customer data. How do you get around holes in your customer journey data and the difficulties of obtaining information from the relevant tech companies? Forget third party cookies – grow your first party data instead.
Data collected directly from customers is more relevant, accurate and higher quality. And better data brings better insights, which will increase the effectiveness of your advertising. By investing in customer tracking software, you can build up a bank of useful data before third-party cookies crumble completely. Get ready for a new (cookie pun-free) era.
How to track customers
When it comes to customer tracking systems, there’s a smorgasbord to choose from. Some, you’ll be aware of – such as CRMs and social media tracking – and others may be new to you. As ever, choosing the right tech will depend on your organisation and its goals. Here are some of the most useful and common options available.
CRM (Customer Relationship Management software)
Customer Relationship Management software helps you gather, store and analyse all kinds of customer information. For example, it can detect and log when a customer opens your email, whether they click on the link in the email or if the email is sitting in the virtual bin unopened. CRM systems can also track various other customer interactions including progress through a sales pipeline and communications. The system stores all this information in one handy centralised customer database that everyone can access. By analysing this data, you can establish and tackle customer pain points, build customer loyalty, develop customer support and extract insights to improve customer relationships and Customer Lifetime Value (CLV). There’s stacks of CRM software on the market, so take time to find one that suits your aims and business.
Social media tracking technology
These days, tracking social media marketing activity is a cinch. Platforms offer granular information on user interactions so you can see what works. Software such as Google Analytics supplies added data, with all kinds of metrics available so you can build a detailed picture of customer behaviour. And now, with social media monitoring tools, you can listen to what’s being said about your brand and plan/react accordingly. With so much tech around, you can find out about almost anything, from which ads and posts get clicks, to negative chatter about your company, product or service. Set your metrics, post your campaign and get tracking.
Website eye tracking
What draws customers’ attention when they visit your website? What advertising makes them do a double-take? With eye-tracking technology, you can see things from the customer’s perspective; a hugely valuable insight. By following people’s eye movements, you can tell which design features and functionality to prioritise, and find out more about your shoppers.
Customer journey mapping
Every purchase a customer makes is preceded by a journey. It’s a sequence of experiences that could start with anything from an ad, to social media, to a recommendation from a friend. From this point, the customer may make several stops or clicks until they come to that crucial point of sale. Understanding this path – and where it deters or encourages customers – can help you refine the whole experience and increase sales.
You can now get tools to help you identify and analyse the online journeys that customers are taking with your brand. Using this technology, you can visualise the entire path, optimise every touchpoint and spot where customers are dropping off.
Heatmaps show you exactly what customers are looking at on a web page and where they are clicking. This data is represented graphically, with ‘warm’ colours showing the highest engagement on the page and ‘cold’ colours showing the lowest. This gives you a detailed picture of the web page’s performance, so you can pinpoint problem areas and improve the design. A helpful data visualisation tool, heatmaps reveal information that’s normally invisible to the marketer’s naked eye.
Behaviour detection technology
Imagine if you could actually see customers wandering around your website: the path they take, what they look at and which areas they struggle to navigate. There are various forms of behaviour detection technology that make this insight a reality.
- Website click tracking tools let you follow a customer as they move around your site, recording each click. It’s a little like a GPS app – you can see where someone’s been and the routes they took to get there. The software then gives you a report that maps out this activity, supplying the data you need to optimise your web pages.
- Session replays add more context by recording each customer’s interaction with a web page. You don’t just get the number and location of clicks; you get the customer’s entire browsing behaviour. That can include how they scroll and move their mouse (or tap, if using a mobile phone). Helpfully, session recordings allow you to observe interaction with dynamic elements (drop-down menus, for instance) and personalised content.
Customer tracking in bricks ‘n’ mortar stores
Customer tracking technology is available for physical shops, too. Today, it’s possible to count how many people enter a store, where they go, what they look at and what they’re actually like. Eye-tracking is one type of technology that can be used both in the virtual and real world. But others – including facial recognition, GPS personal trackers and thermal imaging are part of a whole new breed of marketing tools that retailers are adopting enthusiastically.
This tech gives marketers access to the same kind of granular data that they get online. There’s tech that records footfall (Time of Flight); tracks movement (UWB radar imaging, LIDAR 3D laser scanning); follows products using RFID (Radio Frequency Identification) tags and signal triangulation; and video analysis (which is mercifully self-explanatory). Loyalty schemes are another well-known source of data for marketers to mine. The list is growing as AI, augmented reality and biometrics evolve and offer new possibilities.
However, tracking actual human beings opens up the same privacy issues that online tracking generates. Think carefully about what information you really need and the ethics of tracking customers from a strategic perspective.
The growing role of AI in customer tracking
Whether we’re talking about digital or physical customer tracking, one thing’s for sure: Artificial Intelligence (AI) is gradually revolutionising the task. It can crunch and cleanse data rapidly; create customer behaviour models; predict what customers will respond to; produce personalised messaging; and improve customer service tracking through bots and live chat. While introducing AI may seem like a daunting and monumental task, there are definite gains to be made.
What to track
So, we’ve talked about how to track customers. The next question is what to track. Here are five metrics you should think about if you’re a small business that wants to get ahead.
1. Customer origins
If you know where your customers are coming from, you can work out if your marketing’s giving good ROI. Surveys are one way – asking customers where they heard about you – but you can also use Urchin Tracking Modules (UTM) or tracking pixels. These are tags that are embedded into a link so you can track and analyse that page’s traffic sources.
2. Sales funnel
Watch how many people come through your sales funnel and where you’re losing them. Fix any holes. And refine, refine, refine.
3. Email performance
There’s so much valuable data to be gained from email tracking. Find our who opens your emails, who clicks on links and what that action leads to. Use the information to bump up open and click-through rates, and shape kick-ass email marketing campaigns.
4. Purchase history
Capture purchase histories to analyse sales data. Then you can work out what marketing and promotions would work best. Ok, it’s a bit of a no-brainer.
5. Customer contact information
Customer contact information is gold dust and should be treated with care. Make the most of existing relationships by sending personalised communications that encourage people to buy again.
Ethics, metrics, strategy – it’s a customer tracking jungle out there. With data privacy to consider too, it’s actually a jungle with a minefield underneath. So far, so complicated. But there is a simple answer: get some expert help. Hive is The Maverick Group’s digital innovation and transformation collective, unlocking the possibilities of every new advance for clients everywhere. Our digital experts are here to give you the competitive edge and future-proof your business. If you need advice or support, just get in touch.