How to Conduct a Customer Behavior Analysis: A Complete Guide

How to Conduct a Customer Behavior Analysis: A Complete Guide cover

Customer behavior analysis helps you to understand what goes on in your customer’s head and respond to it to help with product growth.

By delving deep into the data and insights about your customers’ preferences, needs, and buying patterns, you can make informed decisions to drive growth and maximize customer satisfaction.

This comprehensive guide will provide you with practical steps and expert strategies to conduct a thorough customer behavior analysis.

Let’s get started!

TL;DR

These are the six steps to perform consumer behavior analysis:

  1. Segment your audience by data such as the user’s job to be done, goals, challenges, and pain points to find high-value and at-risk customers.
  2. Analyze customer behavior to find the most popular features with high-value users.
  3. Find trends by collecting quantitative and qualitative data, through heatmaps, feature tags, surveys, and talking to support teams.
  4. Use the insights you discover to change your marketing campaigns to attract more high-value users.
  5. Improve your customer journey map with insights you’ve discovered to implement more in-app guidance and improve any friction points.
  6. Analyze customer behavior to continue optimization.
  • Hotjar is a behavioral analytics platform for recording sessions and heatmaps. It can help analyze customer mouse movements, hovers, taps, and scrolls.
  • Mixpanel is a product analytics tool that provides flow, impact, funnel, and retention analysis.
  • Userpilot is a product growth platform that provides a no-code solution for collecting customer feedback. It does this by using surveys and analyzing customer interactions with different product usage. Book a demo to get help performing your customer behavior analysis.

What is consumer behavior?

Customer behavior data encompasses all customer interactions with your product from the beginning of the customer journey.

These interactions can include activities like engaging with the onboarding checklist, clicking on different elements, hovering over specific features, and canceling a subscription.

Product teams gather and analyze this data to gain insights into customers’ behavioral patterns. These insights enable them to take appropriate actions and make informed decisions.

What is a customer behavior analysis?

Customer behavior analysis involves collecting customer data to examine user behavior and activities to obtain valuable insights into how users engage with your product.

By conducting customer behavior analysis, you can understand different customer segments’ preferences and develop well-informed marketing strategies to personalize their customer experience accordingly.

By understanding customer behavior and enhancing user experiences based on these insights, you can boost customer retention rates, ultimately increasing the customer lifetime value.

Why should you conduct a customer behavior analysis?

Conducting customer behavior analysis provides invaluable insights into your target audience’s preferences, needs, and motivations.

Here are four reasons why it’s important to conduct customer behavior analysis in your business.

Identify trends to make predictions for the future behavior

One of the key reasons for conducting a customer behavior analysis is to identify trends and patterns to predict future customers’ wants and needs.

By diving deeper into customer data, you can discover what drives customer satisfaction, and what doesn’t. Take a look at user behavior to see how they engage with your product, what features use the most, and what are their main needs and wants.

You can then forecast customer behavior, recognizing which users are more likely to bring greater revenue over time so you can implement strategies to retain them.

Improve customer satisfaction and customer loyalty

Customer behavior analysis can help you understand what customers enjoy and dislike about your product so you can make improvements.

You can use your customer data to analyze the key drivers of satisfaction through real-time customer engagement analytics.

Once you know what satisfies customers and what doesn’t, you can make the relevant changes to improve the customer experience, increasing customer satisfaction and loyalty.

Deliver personalized customer experience and increase the customer lifetime value

Customer behavior analysis can help you to discover valuable customer information such as customer preferences, hidden needs, and pain points. You can use this information to create customer segments based on a certain attribute or negative experience.

In each segment, you can create a personalized experience addressing or complimenting what was discovered in customer behavior analysis. It could be implementing a tooltip to highlight a feature that could help a customer with one of the jobs to be done. Or display video content within a resource center because the customer prefers that content.

The more you can use the insights you discover, the better experience you can create for your customers, making them continue to pay for your product, leading to a higher customer lifetime value.

Increase customer retention

You can use the insights from analyzing customer behavior to identify high-risk customers and discover the root cause of customer dissatisfaction. You must rectify those product issues to improve the overall customer experience, increasing your retention rate.

For instance, you can see that users of a specific segment are not using the feature essential for their goals. Further investigation will show that due to bad UX, they are unable to find it. To avoid future churn, be proactive, and create a flow that will guide them to the feature and help them adopt it.

How to perform a consumer behavior analysis in 6 steps

Performing consumer behavior analysis can sound daunting, but it is as simple as six steps.

1. Identify relevant customer segments

Customer behavior analysis can help to identify your high-value and at-risk customers. You can use customer data such as your user’s jobs to be done, goals, challenges, pains, and metrics such as customer engagement and satisfaction levels to base your customer segments.

All of this data helps you to analyze customer behavior to identify trends that high-value and at-risk customers have in common.

You can implement a proactive strategy to duplicate the experience of high-value customers for at-risk customers so you can retain them.

A screenshot of customer segments for customer behavior analysis
Creating customer segments in Userpilot.

2. Identify how each segment benefits from your product

With your segments created, you can start analyzing consumer behavior to understand how important segments behave.

These analytics are essential to understand how a cohort of your customers like your high-value users uses your product and what particular features are most popular among them.

A screenshot showing the analytics of how segments are behaving as part of customer behavior analysis
Analytics into each customer segment.

3. Collect qualitative and quantitative data from existing customers to identify patterns

You want to enhance your customer data with feedback from quantitative and qualitative data gathered directly from your customers to answer the following questions:

  • What do customers value most about your product?
  • How do customers interact with different product features?
  • What is consumer buying behavior?
  • Do they require additional training in your product or other forms of support?
  • Which additional features do customers want, and what would they pay a higher rate for?

This will help you identify patterns and create journeys that will drive value in a shorter period of time.

How to collect quantitative data

You can use feature tags and heatmaps to collect quantitative data.

Features tags let you tag certain elements in your product to see what and how users interact with your product.

Heatmaps visually show user engagement on your product via color-coded values. They are a helpful tool to present visual data, revealing the features that attract the most attention from users.

A screenshot of heatmaps of certain features as part of customer behavior analysis
Heatmaps showing user engagement.

How to collect qualitative data

You can collect qualitative data through surveys and talking to your support team.

Depending on your desired insights, you can use a range of in-app surveys to collect customer feedback. Welcome surveys, NPS, CSAT surveys and churn surveys all collect relevant feedback.

To increase the chance of a customer completing them, you want to trigger them at the right moment within your product contextually.

Your customer support team will offer insights into customer behavior due to their constant interactions. They can inform you of any trending customer behavior, which may be impossible to pick up from a survey.

A screenshot of a customer survey for collecting data for customer behavior analysis
In-app survey example created with Userpilot.

4. Implement your customer behavior insights into your marketing campaigns

You want to take the insights you’ve gathered and create personalized offers depending on your segments to help attract the right audience.

For example, you might see that your high-value customers regularly use a certain product feature.

To help attract more of these customers, you can make the necessary changes to your marketing campaigns so more people like your current high-value customer become interested in your product.

5. Improve your customer journey map with your insights

The customer behavior analysis can highlight how customers are interacting with your product to help showcase the improvements needed to optimize your customer journey.

You can implement in-app guidance if you see that customers seek support at a certain touchpoint. Or you can trigger interactive walkthroughs to guide customers on a specific feature where there is friction.

6. Analyze the results and repeat

Customer behavior analysis isn’t something that you do once and forget about it. It’s an ongoing process as your product changes and new customers learn about it.

It should be an ongoing process, so you are continually optimizing.

Tools to conduct customer behavior analysis

To make life easy for you, a range of tools can assist you in conducting customer behavior analysis. Here are three of the industry-leading ones.

Userpilot

Userpilot is a product growth platform that can assist you in collecting data as part of customer behavior analytics and help you implement changes to improve the customer experience.

  • If you need aid collecting quantitative and qualitative data, Userpilot gives you the no-code tools to do so. It offers a way to create a range of surveys and provides templates to get them up and running without engineering help or making them yourself.
A screenshot of the different survey templates in Userpilot
In-app survey templates available in Userpilot.
  • Customer behavior analytics would be useless without a way to analyze data. Userpilot has a suite of analytic features that provide a user-friendly way of seeing how users interact with your product and provide insights you can take action on.
Userpilot's analytic feature displaying how customers are interacting with the product
Feature analytics dashboard.
  • You can also set goals for your users to see how they are progressing toward them. You can use customer behavior analysis to see what users aren’t meeting goals and investigate further to understand why.
Userpilot's goals feature
Userpilot’s goals feature.
  • All the customer data you’re collecting gives you the power of segmentation. You can combine different user attributes and in-app events to build a series of user segments which you can then use to provide a personalized user experience.
user-segmentation-userpilot-customer-behavior-analysis
User segmentation options in Userpilot.
  • Userpilot lets you implement welcome screens to collect data from your customer as soon as they sign up. This is a great time as you aren’t interrupting them using your product.
An example of a welcome screen created in Userpilot
An example of a welcome screen created in Userpilot.

Hotjar

Hotjar is a comprehensive web analytics and user feedback tool designed to assist website owners and digital marketers in better understanding user interactions on their websites.

One of Hotjar’s key features is heatmaps, which analyze and records user activity on selected web pages, recording interactions such as mouse movements, hovers, taps, and scrolls.

Hotjar then takes those interactions and visually displays them in different colors, with the most-interacted areas colored red and orange and the least interacted colored blue.

Hotjar also provides session recordings, allowing you to watch real-time replays of individual user sessions. These recordings offer valuable insights into how a user behaves with your product.

An example of what a session recording looks like in Hotjar
Hotjar’s session recording.

Mixpanel

Mixpanel is a product analytics platform that enables businesses to analyze user behavior and make data-driven decisions. It offers insights into user engagement and tracks product events, such as button clicks and form submissions.

Mixpanel can also help with the following:

  • Through funnel analysis, businesses can identify where users drop off and optimize user flows for better conversion rates.
  • User segmentation allows for targeted analysis of different user groups based on attributes and behaviors.
  • A/B testing helps optimize user experiences by experimenting with different product versions.
  • Retention analysis measures user loyalty over time, while data visualization and reporting tools present data in a clear way.
An example of a product analytic dashboard in MIxpanel
Mixpanel’s analytic dashboard.

Conclusion

You will need more than just talking to your users to get the information you need to understand customer behavior. You need a way to capture and analyze that data to improve your product and customer experience, which helps with retention.

Want to get started with customer behavior analysis? Get a Userpilot Demo and see how you can collect the data you need and analyze your data in a user-friendly way.

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