The next step: Evolving from Web and marketing analytics to customer analytics.

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Everyone’s talking about analytics. Some are even applying it with varying levels of success. But if a company really wants to understand its customers, make a connection and gain a competitive advantage, analytics needs to be more than just business lingo that gets tossed around the conference table or considered a nice-to-have. Analytics needs to be central to the organization’s philosophy and help align all business and marketing decisions.

Right now, Internet competition has made Web analytics all the rage. But as mentioned in a BtoB cover story in July, (“Marketers discover analytics’ power”), many companies aren’t even thinking in terms of serious Web analytics because it “isn’t a fire extinguisher.” People feel that they need to focus their budgets and energies on the more urgent tasks they face every day.

While that’s understandable, I think it misses the point. Perhaps it’s the phrase “Web analytics” itself that’s to blame—it puts the focus slightly off-target. Web analytics is only important as part of a larger picture of the customer. We should be talking instead about “customer analytics.” How a customer behaves on the Web is incredibly valuable for filling in more details on the image gained from offline purchase behavior, customer service interactions and demographic and psychographic data.

As it becomes harder to compete on- and offline based purely on product and service differentiation, knowing your customer is going to be everything. Those who didn’t find the time to look ahead and inform themselves will be left in the dust. It doesn’t matter if you’re selling airline tickets, tennis shoes, tractors, beach homes or software; the Internet has commoditized many product and service offerings—or at least the process of procuring them.

The Web has led to new markets, new channels, new business models and created new product and service needs. Companies are collecting more data than ever. From transactional to behavioral data, the amount of customer information now available is staggering.

At the same time, consumer expectations are changing. Customers can be downright offended when they tell you something about themselves online and you don’t seem to have been listening when you mail.

That’s why, starting now, full-scale customer analytics is a must-have.

In a recent webinar, Thomas Davenport, author of “Competing on Analytics,” (Harvard Business School Publishing, 2006) emphasized the companies that are the best at using analytics to gain market share all have executives who are passionate about analytics. We see this in winning marketing departments as well. The CMO’s focus is shifting from creative to analytical. Now, the webmaster needs to get on board.

Of course the specific challenge with Web analytics is the anonymity of the Internet. Much of the information captured is anonymous session data and statistics. But through the integration of Web analytics with e-mail and database marketing, we can better tie information to specific users, adding session data to customer profiles. Right now, this information is most often stored in the Web analytics tools. But why keep these powerful data segregated from everything else you know about your customer? Why not export and mine them along with your offline data for a more comprehensive analysis? If your marketing team doesn’t have access to all customer data across the enterprise, they can’t have a complete picture of your customer. They can’t help your customer as muxh as your customer expects, and they can’t anticipate what your customer will want next.

Analytics is about competitive advantage—something none of us can afford to ignore. It’s about knowing your customers better than your competition does, and using that knowledge to create long-term value for everyone.

Jason McNamara is CMO at Alterian (, a provider of software for analytically led integrated marketing.

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