Customer analytics is a process by which data from customer behavior is used to help make

key business decisions via market segmentation and predictive analytics. This information is
used by businesses for direct marketing, site selection, and customer relationship
management. Marketing provides services in order to satisfy customers. With that in mind,
the productive system is considered from its beginning at the production level, to the end of
the cycle at the consumer. Customer analytics plays an important role in the prediction of
customer behavior.[1]

Contents
1 Uses
2 Predicting customer behavior
2.1 Data mining
3 See also
4 References
5 Further reading
6 External links
Uses
Retail
Although until recently over 90% of retailers had limited visibility on their customers,[2]
with increasing investments in loyalty programs, customer tracking solutions and market
research, this industry started increasing use of customer analytics in decisions ranging from
product, promotion, price and distribution management.[citation needed] The most obvious
use of customer analytics in retail today is the development of personalized
communications and offers and/or different marketing programs by segment.[citation
needed] Additional reasons set forth by Bain & Co. include: prioritizing product
development efforts, designing distribution strategies and determining product pricing.[3]
Demographic, lifestyle, preference, loyalty data, behavior, shopper value and predictive
behavior data points are key to the success of customer analytics.[citation needed]
Retail Management
Companies can use data about customers to restructure retail management. This
restructuring using data often occurs in dynamic scheduling and worker evaluations.
Through dynamic scheduling, companies optimize staffing through predictive scheduling
software based on predictive customer traffic. Worker schedules can be adjusted in
response to updated forecasts at short notice. Customer analytics allows retail companies to
evaluate workers by comparing daily sales to daily traffic in a store. The use of customer
analytics data affecting the management of retail workers in a phenomenon known as
refractive surveillance. The model of refractive surveillance describes how the collection of
information on one group can affect and allow for the control of an entirely different group.
Criticisms of Use
As retail technologies become more data driven, use of customer analytics use has raised
criticisms specifically in how they affect the retail worker. Data driven staffing algorithms
can lead to irregular working schedules because they can change on short notice to adapt to
predicted traffic. Data driven assessment of sales can also be misleading as daily traffic
counters do not accurately distinguish between customers and staff and cannot accurately
account for workers’ breaks.[4]
Finance
Banks, insurance companies and pension funds make use of customer analytics in
understanding customer lifetime value, identifying below-zero customers which are
estimated to be around 30% of customer base, increasing cross-sales, managing customer
attrition as well as migrating customers to lower cost channels in a targeted manner.
Community
Municipalities utilize customer analytics in an effort to lure retailers to their cities. Using
psychographic variables, communities can be segmented based on attributes like
personality, values, interests, and lifestyle. Using this information, communities can
approach retailers that match their community’s profile.
Customer relationship management
Analytical Customer Relationship Management, commonly abbreviated as CRM, enables
measurement of and prediction from customer data to provide a 360° view of the client.