Leveraging Data Visualization to Create Loyal Customers
Customer loyalty is an obsession for every company in every industry. And with good reason: It costs on average five times less to generate sales from existing customers than it does to convince new prospects to take action.
However, customer loyalty is a complex area that requires marketing, sales, and analytical skills in a company. Above all, it requires tools to collect, combine, and analyze customer data to develop strategies that pay off.
Data visualization not only allows you to measure the performance of your customer loyalty campaigns, but it also supports strategic and operational decisions for the management of the company. In short, it is an absolutely essential tool for becoming a data-driven company.
In this article, we are going to review:
- What exactly is data visualization
- 3 steps to build your customer loyalty reporting
- 10 KPIs that will help you measure your performance and improve your marketing campaigns
What is data visualization?
First of all, let’s quickly dwell on the notion of data visualization.
The terms data visualization (data visualization) and data analytics (data analysis) are sometimes used interchangeably. There is, however, a big difference.
Data analytics consists in processing raw data to make them usable in your reporting. It includes cleaning up incomplete data, cross-referencing data from different sources, or transforming data through calculations (averages, weightings, aggregations, etc.).
This exercise allows the data to be analyzed and interpreted. On the other hand, when dealing with a large volume of data, which is often the case for customer data, it does not allow decision-makers to apprehend the data as a whole.
This is where data visualization comes in. It is the ability to visually represent this data, making it easier to analyze. The proof is in the pudding:
Data in an Excel spreadsheet :
Data represented visually in a dashboard:
Now that the definition of data visualization has been clarified, we can look at its involvement in a customer loyalty strategy.
In reality, to measure your marketing performance and act positively on your customers’ journey, you will have to go through 3 main steps:
- Collect and combine your customer data to create a unified view of your customers
- Define the purpose of your dashboard and define your KPIs
- Choose a data visualization tool adapted to your needs
3 steps to build meaningful customer loyalty reporting
Step 1 – Centralize and combine customer data in a CDP
Centralizing and cross-referencing customer data is the first, essential step in implementing a data-driven strategy. By combining all of your customers’ information, you can more easily trigger marketing scenarios tailored to each customer segment.
Let’s take an example.
You are a brick-and-mortar company with physical points of sale in the US and in Europe, as well as several websites (one per region).
Imagine being able to cross-reference data from your PPC campaigns on Google or social media, customer journey data on your website and/or in-store, customer purchase history, abandoned shopping carts, inventory status, after-sales service data, customer reviews left on your site or external sites, coupons applied, interactions from your customer base by email campaign, and results generated by your affiliate campaigns. The benefit is clear: in-depth knowledge of your customers’ behavior and their relationship with your brand.
But how can we cross-reference this data from very different tools and channels?
Of course, it is absolutely out of question to export data to Excel spreadsheets from each tool and each channel and to cross-reference this data manually. No, that time is over.
Fortunately, there are tools that allow you to connect all your internal systems and automate the export of your data. These are the Customer Data Platform.
Step One: ✅
You have built up a solid customer database with valuable data that you can leverage. Before you start building your dashboard, you still have some thinking to do: the definition of its objectives and of your KPIs.
Step 2 – Define the objectives of your dashboard and your KPIs
Building a headlong dashboard will be counterproductive.
If you don’t take the time to think about it beforehand, the dashboard’s users will end up dropping it due to lack of interest and will fall back into bad habits: the famous individual handmade report in Excel.
So, to optimize the chances of adopting the dashboard in the team, here are six tips to follow:
- Identify the dashboard’s audience and the expected actions they’d like to take with the dashboard.
- Keep the dashboard simple and clear – no more than 10 KPIs per report, beyond that number, it may become confusing to your audience.
- Explain the KPIs – feel free to include a glossary in the dashboard.
- Use colors correctly – the aesthetics of the dashboard should not take precedence over the readability of the data (see #2).
- Choose the right dashboard format – will it be viewed mostly on a TV screen, desktop, mobile or tablet?
Make dashboards interactive – add filters and chart interactions to make data exploration easier. See the example below, you can drill-down into your data by adding interactions between charts:
How to define your KPIs?
First, what is the difference between “indicator” and “key performance indicator”?
All KPIs (Key Performance Indicators) are indicators, but not all indicators are KPIs.
(Slightly) longer version:
An indicator is a measure that allows you to evaluate the performance of an action by comparing the results achieved against the defined goals.
Each business department has its own performance indicators: the number of visitors to the website or the click-through rate of an email marketing campaign; the average net income per customer and the CLTV (customer lifetime value) for sales; the cost of goods sold or business margin for accounting …
KPIs are indicators that will weigh in the strategic decisions of the company. They should summarize the overall performance of each team or department. You understand then why it is important to limit the number of KPIs per business unit…
10 KPIs to evaluate the performance of your customer loyalty strategy
- Repeated purchase rate – compare the number of regular customers with the number of occasional customers.
- Incentive sales rate – compare the number of customers who purchased related products to the number of customers who purchased only one product.
- Loyalty rate – compare the number of regular customers with the total number of customers.
- Participation rate – measure the number of customers actively participating in your loyalty program (number of coupons applied, number of purchases generated by your email campaign…).
- The control population – analyze the behaviors of customers who received your retention plan and the behaviors of those who did not.
- CLTV (Customer Lifetime Value) – get the value of a customer throughout their relationship with your brand. If he has made 3 purchases of €150, €80 and €100, his CLTV is €330 (150 + 80 + 100 = 330). You can make a monthly or yearly average per segment to identify the most loyal customer typology.
- Attrition (or churn) rate – measure the rate of lost customers, i.e. the number of customers who have not made any purchases or had no interaction with your brand over a long period of time (1 or 2 years). Divide the number of lost customers by the total number of customers, multiply by 100.
- NPS (Net Promoter Score) – assess your customers’ satisfaction by analyzing their opinions, customer service ratings, social network comments, etc.
- Transfer matrix – visualize the evolution of the behavior of different customer segments over time (average revenue generated per segment, the evolution of the participation rate in your loyalty actions, etc.).
- Active customers – measure the number of active customers you have been able to recruit or retain over a given period of time. It is very easy to calculate: new active customers acquired over the period minus the number of customers who became passive.
These ten KPIs will allow you to quickly evaluate the performance of your loyalty plans, to better understand your customers’ behaviors and expectations, and to react quickly in case the results fall short. Of course, KPIs may vary depending on your industry, the maturity of your company or the objectives you wish to achieve.
Example of a Customer Loyalty Dashboard
Ok, now you have the right to build your dashboard!
… In fact, not quite yet. You need to choose the right data visualization tool.
Step 3 – Choose the right data visualization tool
And it’s not easy. There are many data visualization players on the market. So how do you find the right fit?
Here is a checklist you can use to make sure you find the right tool:
- Has connectors to all of your company’s systems and tools to centralize your CRM data, website, marketing tools, POS software, financial system, and your after-sales service tool. Or make sure it integrates with your Customer Data Platform if you have already centralized your data there.
- Has data processing tools: data cleaning and consolidation, aggregation, ability to perform calculations, and create joins between datasets.
- Offers automation tools: automated data refreshes, alerts, and publication of dashboards.
- Allows you to create personalized and interactive dashboards.
- Allows you to easily share the dashboards within a team or within your company.
In fact, if a tool meets all these criteria, we can call it a Business Intelligence (BI) software, since it covers the entire data processing and analysis process.
With a dashboard like this, you can quickly understand how your customers are reacting to your marketing campaigns and what actions need to be made:
Cultivating a strong and lasting customer relationship requires a lot of attention from the marketing, sales, and after-sales service. By adopting data visualization and customer loyalty KPIs, you will bring your company a little more into the (still very exclusive) group of data-driven organizations. You will be able to analyze customer behavior, measure the performance of you’re A/B tests, identify opportunities to innovate and develop your business. Data is the keystone of your growth.
The good news is that you can take the plunge quickly with your Customer Data Platform and ClicData, a data visualization and data analytics platform. With this integration, you will be able to centralize, leverage, visualize, and analyze your customer data in just a few days.