Customer Analytics Coverage

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES 1
WEEK 2
INTRODUCTION TO CUSTOMER ANALYTICS
Overview:
The purpose of business is to create and keep a customer. This statement was made
by Peter Drucker, the acclaimed 20th-century management consultant. A simple statement
that reveals in just a few words that the long-term viability of a company is not just about
maximizing revenue and minimizing costs. Long-term viability is about understanding what
it takes to attract customers by continuing to meet and exceed their physical and
psychological needs.
Good customer management comes from good customer measurement. Metrics are
numbers assigned to everything from website visitors, same-store sales, and profit margin
to call-center wait times. Analytics are metrics plus the methods that drive meaningful
decisions. You can think of metrics as “informational,” while analytics are “strategic.” So,
while not all metrics are analytics, all analytics come from metrics. You need metrics to get
analytics.
Increasingly, decisions are made on numbers. If you know the numbers better, and
can articulate what those numbers mean and how you can differentiate a product,
organization, or brand, you can distinguish yourself from your competitors.
Module Objectives:
After successful completion of this module, you should be able to:
1. Develop understanding about the concept of customer analytics;

2. Discover the benefits of customer analytics;
3. Sort through big and small data.
Course Materials:
1.1. Defining Customer Analytics
Customer Analytics includes the actions and activities such as:
Gathering data
Using mathematical models to detect patterns
Finding the insight

Supporting decisions
Optimizing the customer experience
Customer journey mapping
Critical ingredients of customer analytics:
Customer-focused
At the individual customer level
Longitudinal
Behavioral and attitudinal
Learn from:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (pp. 7-8)
1.2. The Benefits of Customer Analytics
Streamlined campaigns
Competitive pricing
Customization
Reduced waste
Faster delivery
Higher profitability
Loyal customers
Multidisciplinary
Customer analytics is multidisciplinary and involves input from and output to:
Marketing
Information Technology (IT)
Sales
Product development
Multi-metric
Customer analytics requires a combination of both behavioral and attitudinal data such
as:
Revenue
Transactions
Customer Lifetime Revenue
Future intent
Likelihood to recommend
Product usage
Website visits
Return rates
Abandonment rates
Conversion rate
Satisfaction
Usability
Findability
Multi-method
The common methodologies that are being undertaken in customer analytics include
the following:
Survey analysis
Customer segmentation
Transactional analysis
Factor analysis
Cluster analysis
Regression analysis
Neural networks and machine learning (ML)
Learn more:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (pp. 8-11)
1.3. Using Customer Analytics
Examples or applications of customer analytics:
Retail
Finance
Online
Software
Professionals with background in mathematical skills and software skills can specialize
in customer analytics, these individuals include:
Data scientists
Statistician
Database analyst
Most business professionals already measure customer analytics and it takes the
desire to better understand a customer and a willingness to answer business questions with
data:
Business analysts
Project managers
Product managers
Designers
Learn more:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (pp. 11-
12)
1.4. Compiling Big and Small Data
Big Data – extremely large datasets, often containing millions or billions of customer
transactions or records. These large datasets are analyzed with sophisticated software to
reveal patterns, trends, and associations. Big data allows you to detect very subtle trends
and patterns that may have a large impact on revenue.
Small Data - finding insights with datasets that often contain less than 30 customers.
Customer analytics involves the combination of:

Past behavior
Predictive modeling
What-if scenarios
Customer experience
Learn more:
13)
Sources / Suggested Readings:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (pp. 1-13).
Smith, A. (2019). Consumer behaviour and analytics. Routledge. (pp. 1-25)
Activities/Assessment:
1. Discuss your understanding about the concept of customer analytics by answering the
question, “Do you agree that customer analytics entails having a 360°-view of any
business organization’s customer?” Explain your stand.
2. What do you think are the benefits of having a data analytics-driven customer
retention marketing for the business performance? Feel free to add your inputs about
the question aside from what were discussed in the materials.
3. Discuss the role of the business organization’s available big and small data in working
with customer analytics.
CUSTOMER ANALYTICS
TODAY'S LESSON:
INTRODUCTION TO
CUSTOMER ANALYTICS
Polytechnic University of the Philippines - Taguig Branch | BUMA 30093 (Customer Analytics)
Peter Drucker:
"The purpose of business is to

create and keep a customer."
GOOD CUSTOMER
MEASUREMENT
GOOD CUSTOMER
MANAGEMENT
Quantitative assessment commonly used for comparison, or tracking
performance.
Website CLICKS
performance.
No. of social media

page followers
performance.
Customer
satisfaction rates
ANALYTICS = METRICS + METHODS
MEANINGFUL DECISIONS
MODULE OBJECTIVES
After the successful completion of this module,
you should be able to:
Develop understanding about the

concept of customer analytics.
MODULE OBJECTIVES
Discover the benefits of customer

analytics.
MODULE OBJECTIVES
Sort through big and small data.
BUSINESS ANALYTICS
(ANALYTICS)
Use of data, information technology, statistical

analysis, quantitative methods and mathematical
or computer-based models to help managers gain
improved insight about their business operations
and make better, fact-based decisions. It is a
process of transforming data into actions through
analysis and insights in the context of
organizational decision making and problem
solving. (Evans, 2017).
BUSINESS ANALYTICS
(ANALYTICS)
Art of assembling data gathered through Business

Intelligence in such a way that it can be analyzed
by people. It is comprised of the tools with which
people can disseminate the data that have been
collected, to produce meaningful conclusions
(Fulton, 2013).
BUSINESS ANALYTICS
(ANALYTICS)
Comprised of solutions used to build analysis

models and simulations to create scenarios,
understand realities and predict future states
including data mining, predictive analytics,
applied analytics and statistics
(https://www.gartner.com/itglossary/
business-analytics).
BUSINESS ANALYTICS
(ANALYTICS)
The study of data through statistical and

operations analysis, the formation of predictive
models, application of optimization techniques,
and the communication of these results to
customers, business partners, and college
executives (Galleto, 2018).
1.1. BUSINESS ANALYTICS
(ANALYTICS)
A process beginning with business-related data

collection and consisting of sequential application
of descriptive, predictive, and prescriptive major
analytic components, the outcome of which
supports and demonstrates business decision-
making and organizational performance
(Schniederjans, et. al., 2014).
(ANALYTICS)
Decisions which can be enhanced by business
analytics:
Pricing (setting prices for consumer and industrial

goods, government contracts, maintenance contacts)
Merchandising (determining brands to buy, quantities,
and allocations)
Location (best location for bank branches and ATMs,
where to service industrial equipment)
(ANALYTICS)
Decisions which can be enhanced by business
analytics:
Customer segmentation (identifying

and targeting key customer groups
in retail, insurance, and credit card
industries)
1.1. CUSTOMER ANALYTICS
Systematic examination of a company's customer
information and behavior to identify, attract, and
retain the most profitable customers
(https://www.techtarget.com/searchbusinessanal
ytics/definition/customer-analytics).
Processes and technologies that give

organizations the customer insight necessary to
deliver offers that are anticipated, relevant, and
timely
(https://www.sas.com/en_ph/insights/marketing
/customer-analytics.html)
As a backbone of all marketing activities of a company/brand,
Predictive Modeling Data Visualization

Source: SAS
As a backbone of all marketing activities of a company/brand,
Information Management Segmentation

Source: SAS
Customer Analytics (CA) includes the actions and

activities such as:
Gathering data
Using mathematical models to detect patterns
Finding the insight
Supporting decisions
Optimizing the customer experience
Critical Ingredients of Customer Analytics
Customer-focused
At the individual customer level
Longitudinal
Behavioral and attitudinal
1.2. BENEFITS OF CUSTOMER ANALYTICS
Streamlined
Campaigns
Streamlined
Campaigns
Competitive Pricing
Competitive Pricing
Competitive Pricing
Customization
Customization
Customization
Customization
Customization
Customization
Customization
Reduced Waste
Faster Delivery
Loyal Customers
Loyal Customers
Loyal Customers
1.2. BENEFITS OF CUSTOMER
ANALYTICS
Customer Analytics as Multidisciplinary
Marketing
Information Technology
Sales
Product Development
ANALYTICS
Customer Analytics as Multimetric
Revenue
Transactions
Customer Lifetime Revenue
Future intent
Likelihood to recommend
Product usage
Website visits
Return rates
ANALYTICS
Customer Analytics as Multimetric
Abandonment rates
Conversion rate
Satisfaction
Usability
Findability
ANALYTICS
Customer Analytics as Multi-method
Survey analysis
Customer segmentation
Transactional analysis
Factor analysis
Cluster analysis
Regression analysis
Neural networks and machine learning (ML)
1.3. USING CUSTOMER ANALYTICS
Retail
Retail
Finance
Online
Online
Software
1.4. COMPILING BIG AND SMALL DATA
BIG DATA
Extremely large datasets, often containing millions or

billions of customer transactions or records
Analyzed with sophisticated software to reveal
patterns, trends, and associations.
Allows one to detect very subtle trends and patterns
that may have a large impact on revenue.
SMALL DATA
Finding insights with datasets that often contain less

than 30 customers
1.4. COMPILING BIG AND SMALL DATA
Customer Analytics involves the combination of:
Past behavior
Predictive modeling
What-if scenarios
Customer experience
NEXT LESSON:
EMBRACING THE SCIENCE

AND ART OF METRICS
CUSTOMER ANALYTICS
TODAY'S LESSON:
EMBRACING THE ART AND
SCIENCE OF METRICS
CUSTOMER ANALYTICS:
Customers' actions and

attitudes
DATA
CUSTOMER ANALYTICS:
Analytical thinking cap

Creative thinking cap
MODULE OBJECTIVES
After the successful completion of this
module, you should be able to:
Quantifying and qualifying data;

MODULE OBJECTIVES
Identifying the types of data;

MODULE OBJECTIVES
Deciding on the correct sample size;

and
MODULE OBJECTIVES
Knowing what to measure.

ADDING UP
QUANTITATIVE DATA
ADDING UP QUANTITATIVE DATA
QUANTITATIVE DATA
Data that is broken down by concrete numbers
No. of products a customer
places in his shopping cart.
QUANTITATIVE DATA
No. of official social media
account followers
QUANTITATIVE DATA
Foot traffic
QUANTITATIVE DATA
How much revenue

earned from a
particular customer
(e.g. Php 10,000.00)
ADDING UP
QUANTITATIVE DATA
QUANTITATIVE DATA
Falls into two categories:
Discrete (countable items)

Continuous (measurements)
ADDING UP
QUANTITATIVE DATA
QUANTITATIVE DATA - DISCRETE
Has finite values (buckets)

Countable
No. of products in the catalog

No. of FREE DELIVERY No. of impression No. of customers

vouchers redeemed (reactions/shares) visiting/making a
transaction
ADDING UP
QUANTITATIVE DATA
QUANTITATIVE DATA - CONTINUOUS
Has infinite number of steps (continuum)
Website Session
(Time browsing /
finding products
in your site
(120.2940143
seconds)
Product dimension
Chicken (1.0542 kg) Galunggong (0.54623 kg) Oranges (1.2843 kg)
Store's distance from

the customer's location
(5.514 km)
Delivery lead time
LEVELS OF DATA
(MEASUREMENT)
LEVELS OF DATA
(MEASUREMENT)
Nominal (Categorical) Data
Ordinal Data
Interval Data
Ratio Data
LEVELS OF DATA
NOMINAL DATA (CATEGORICAL)
Product color
LEVELS OF DATA
ORDINAL DATA
Customers' checkout
queueing
LEVELS OF DATA
ORDINAL DATA
Rating Scale:
5 - Very Satisfied
4 - Satisfied
3 - Neutral
2 - Less Satisfied
1 - Not Satisfied
LEVELS OF DATA
INTERVAL DATA - equally split intervals between
each value.
Temperature - in degrees Fahrenheit
LEVELS OF DATA
RATIO DATA - with a natural zero (0) point
Market Share
LEVELS OF DATA
VARIABLES
VARIABLES
A characteristic of a product or service
that varies, which can often be
manipulated
VARIABLES
PRODUCT VARIABLES
Price Delivery Time Product Color
VARIABLES
CUSTOMER VARIABLES
Sex/Gender
Income
Location
Age
Store/s of Transaction
When the customer last made his purchase
Spending Capacity
VARIABLES
Dependent Variables
Independent Variables
VARIABLES
DEPENDENT VARIABLES
Profitability Customer Satisfaction Customer Loyalty
VARIABLES
INDEPENDENT VARIABLES
Price Product/Service Features Advertising
VARIABLES
Change the independent variables

you can control to affect the
dependent variables you cannot.
QUANTIFYING
QUALITATIVE DATA
QUANTIFYING QUALITATIVE DATA
Website User
Interface (UI)
Website User
Interface (UI)
Website User
Interface (UI)
Website User
Interface (UI)
Website User
Interface (UI)
QUANTIFYING QUALITATIVE
DATA
Comments provide immediate insight and potentially

action (improve the customer experience).
DATA
Quantifying the frequency of customer comments

helps you understand how prevalent a certain
attitude may be in your entire customer
population. Some examples of open-ended
responses (often called verbatim responses) are
common for things such as:
Reasons why customers Observations from Product complaints in

are not recommending customers using a customer service calls
your products product at their
workplace
DATA
Steps in turning qualitative data into quantitative

data:
1. Group similar comments and behaviors.

2. Count the frequency.
3. Estimate the frequency.
DETERMINING THE
SAMPLE SIZE YOU NEED
DETERMINING THE SAMPLE SIZE YOU NEED
DETERMINING THE SAMPLE SIZE YOU NEED
ESTIMATING WITH A
CONFIDENCE INTERVAL
Computing a 95% confidence interval:
To compute a 95% confidence interval, you need

three pieces of data:
The mean (for continuous data) or proportion

(for binary data)
The standard deviation, which describes how
dispersed the data is around the average
The sample size
ESTIMATING WITH A CONFIDENCE INTERVAL
CONTINUOUS DATA:
Imagine you asked 50 customers how satisfied

they were with their recent experience with your
product on an 7-point scale, with 1 = Not at all
satisfied and 7 = Extremely satisfied. These are the
steps you would follow to compute a confidence
interval around your sample average:
ESTIMATING WITH A
CONFIDENCE INTERVAL
ESTIMATING WITH A
CONFIDENCE INTERVAL
DISCRETE DATA:
Imagine you asked 50 customers if they are going

to repurchase your service in the future. Using a
dummy variable, you can code Yes = 1 and No = 0.
If 40 out of 50 report their intent to repurchase,
you can use what is called the Adjusted Wald
technique to find your confidence interval:
ESTIMATING WITH A
CONFIDENCE INTERVAL
DETERMINING WHAT
DATA TO COLLECT
DETERMINING WHAT DATA TO
COLLECT
Descriptive
Behavioral
Interaction
Attitudinal
COLLECT
Descriptive
Behavioral
Interaction
Attitudinal
COLLECT
Descriptive
Behavioral
Interaction
Attitudinal
COLLECT
Descriptive
Behavioral
Interaction
Attitudinal
MANAGING THE RIGHT
MEASURE
MANAGING THE RIGHT MEASURE
RIGHT MEASURES will:
Identify problem areas

Track improvements over time
Be meaningful to the customer
WRONG MEASURES can:
Identify wrong areas of focus

Miss problems all together
Lead to unintended consequences
Alienate customers
Conversion rate versus number of conversions

Number of clicks versus time to destination
Call time or call satisfactorily resolved
Customer satisfaction as a bonus motivator
Likelihood to recommend or likelihood to
repurchase
On-time arrival versus on-time departure

repurchase

repurchase

repurchase

repurchase

repurchase
NEXT LESSON:
PLANNING A CUSTOMER
ANALYTICS INITIATIVE
WEEK 3
PLANNING A CUSTOMER ANALYTICS INITIATIVE
Overview:
Launching a customer analytics initiative can be confusing on where to start and which
method to use when. In this chapter, you will learn the best practices for defining, collecting,
and analyzing your customer analytics to help make better decisions from your customer
data.
There are a number of ways of thinking about goals, methods, and outcomes. Your
organization may already have a project scoping process that you can adapt for your
customer analytics initiative. This chapter shall help you learn the Six Sigma approach which
is patterned to customer analytics. It is a framework that is flexible and familiar and works
across disparate products and companies.
The basic framework is to define what you want to do, find the right ways to measure
it, do something about the measures, and put processes in place to continue using customer
analytics to make better business decisions.
Module Objectives:
1. Outline the scope and goals of a customer analytics initiative;

2. Choose the appropriate metrics, methods, and tools; and
3. Set budget and sample sizes.
Course Materials:
3.1. A Customer Analytics Initiative Overview
Four things to remember in starting a customer analytics initiative:
Access to the right data

Customer level data
Analytics that focus on customer
Getting buy-in
Learn more:
32).
3.2. Defining the Scope and the Outcome
The first stage in putting up a customer analytics initiative for your business
organization is goal-setting. Goal setting means defining the scope and the outcome of the
project.
1. State the goals of the initiative.

2. Write down the questions that you want to answer.
Learn more:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (p. 33).
3.3. Identifying the Metrics, Methods, and Tools
In this step, identify the metrics and methods you will use to answer your questions
and achieve your goals:
Look for metrics that are meaningful to the customers

Identify the tools that you will need for data collection (surveying existing
customers)
The table below shows how to work from question (from the preceding section) to
metric to method, and finally to the right tools for the two examples of customer loyalty and
findability.
Table 3.1. Identifying the Metrics and Appropriate Tools to use
You also need to understand your baseline scores. It is hard to know if you have
improved anything if you do not have a baseline measure.
After surveys, customer transactions and purchase data are popular sources for
finding baseline data. You need:
Access to customer data

Transaction data at the right level of detail
Learn more:
35).
Smith, A. (2019). Consumer behaviour and analytics. Routledge. (pp. 14-25)
Vineet Kumar, & Reinartz, W. J. (2018). Customer relationship management: concept,

strategy, and tools. Springer, Cop. (pp. 81-98)
3.4. Setting a Budget
Every project requires a budget – no matter how big or how small the project is. In
preparing the budget for a customer analytics initiative, the following must be taken into
consideration:
Software
Time
Cost of the business:
✓ How many customers are defecting to a competitor?
✓ What percent of customers are not returning?
✓ How many customers are discouraging others from using your product
or service?
Learn more:
36).
3.5. Determining the Correct Sample Size
If you are not measuring every transaction or surveying every customer, you will have
to deal with the uncertainties that come with sampling a portion of your customer population.
Even if you sample everyone, you will likely want to make estimates about future customers
or future transactions, and to do so, you will still have to deal with the uncertainty.
In general, it costs more money and takes more time to either sample or analyze data
from a large database, so you must put some thought into how large of a sample size you
need.
General tips in coming up with the right sample size:
You need larger sample sizes to detect smaller differences.

For very large sample sizes, almost all differences will be statistically
significant.
Learn more:
37).
3.6. Analyzing and Improving
In the analyze phase, you want to be able to describe the current state of the customer,
often by segment, and identify the root causes of problems or insights to make
improvements.
For example, if you’re measuring customer loyalty, you’ll have customers’ likelihood to
recommend scores, satisfaction ratings on other parts of an experience, and open-ended
comments. From this you can:
Compute the baseline Net Promoter Score

Conduct a key driver analysis to understand which features or attributes of the
experience are having the biggest impact on customers’ likelihood to
recommend
Improving is often the most challenging part of any project, and that is making changes
to a product or process. The goal of the improving phase is to implement solutions that
address the root causes of customers’ pain points.
During the improving stage, you use the data collected in the measure phase to show
quantifiable improvements (or reductions) in your metric. This can include:
Conversion rates (converting more browsers to buyers online)

Improvements in customer attitudes
Increases in revenue
An increase in the number of repeat purchases
One of the worst things that happens is collecting analytics that clearly show a problem
with the customer experience but then doing nothing about it. It can frustrate customers and
lead to analytics initiatives that were just an exercise in measuring.
For some methods, the improvement process is built into the measure step.
Making changes is much harder
Learn more:
38).
3.7. Controlling the Results
A lot of effort can go into planning and collecting data. You can prevent waste and
rework by putting in place systems to reduce the time between data collection and action.
Some things to consider are:
Automatic reporting
Access to data
Putting the right people and procedures in place
Learn more:
Source:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc.
Smith, A. (2019). Consumer behaviour and analytics. Routledge.

strategy, and tools. Springer, Cop.
1. Assess and rate the prerequisites in starting on any customer analytics initiative based
on importance: 4 – Highly Important; 3 – Important; 2 – Less Important, 1 – Not
Important. Justify your evaluation.
2. Explain the importance of defining the scope and the outcome of a customer analytics
initiative.
3. Plot the different customer analytics metrics and the relevant analytical tools to be
used in monitoring if the metrics are achieved.
4. In setting a budget for a customer analytics initiative or project, which consideration

should you take and why?
a. CA initiative is more of an expense than being an investment

b. CA initiative is more of an investment than an expense
WEEK 2
EMBRACING THE ART AND SCIENCE OF METRICS
Overview:
Customer analytics largely involves turning customer actions and attitudes into data.
Not all data is the same, and knowing what type of data you’re dealing with guides you
through what you can do with it. When you can interpret the data that’s available to you, you
can start making better decisions about product features and service experiences.
This chapter shall help you understand the different types of data, and show you how
to work with quantitative and qualitative data. The best practices for identifying the best
metrics to manage shall also be discussed in this chapter.
You will have to put on your analytical thinking cap (the science of metrics) and your
creative thinking cap (the art of metrics). If you are not a numbers person and decide to hire
someone who is, that is okay. But this is still a useful chapter because you need to know
how to talk to your analytics person. And you still need to know how to interpret the numbers
so you can make sound decisions about how to improve your business.
Module Objectives:
1. Measure accurately with quantitative and qualitative data;

2. Identify the different types of data;
3. Decide on the correct sample size; and
4. Determine what to measure.
Course Materials:
2.1. Adding up on Quantitative Data
Quantitative data – information that are broken down by concrete numbers (e.g., how
many products a customer places in the shopping cart, how much revenue you earn from a
specific customer).
Categories of quantitative data:
Discrete data – have finite values or buckets:

Examples:
➢ Number of questions
➢ Number of products in your catalog
➢ Number of employees you have
➢ Number of customer reviews for a specific product
Continuous data – have an infinite number of steps, which form a continuum:

Examples:
➢ Dimensions of a specific product
➢ Miles to your retail store from a customer’s location
➢ Time for a customer to find the information he or she is looking for on
your website
➢ Days until a product ships to a customer
Learn more:
2.2. Levels of Data
Another way customer analytics data gets divided is by the four levels of
measurement. They are levels because they start with data that are more limiting in the type
of analysis you can perform to the least limiting:
Nominal (Categorical) Data - This includes discrete data such as the name
of your company, type of car you drive, or name of a product. Nominal means
essentially “in name only”; if you have a name, it belongs in this category.
Nominal data is qualitative data
Ordinal Data - This includes data that has a natural ordering. The ranking of
customers by oldest to newest, the order of callers in a queue for a call center,
the order of runners finishing a race, or more often, the choice on a rating scale,
such as from 1 to 5.
Interval Data - This is data that has equally split intervals between each value.
The most common example is temperature in degrees Fahrenheit. The
difference between 29 degrees and 30 degrees is the same magnitude as the
difference between 78 degrees and 79 degrees
Ratio Data - This is interval data with a natural zero point. For example, time
to find a product on a website is ratio, because 0 time is meaningful. Degrees
Kelvin has a 0 point (absolute zero). The steps in both these scales have the
same degree of magnitude.
Learn more:
18).
2.3. Variables
Variable - characteristic of a product or service that varies, which can often be

manipulated. For example, price, delivery time, and color are product variables. Customer
variables can include gender, income, geography new customer versus existing customer,
and type of industry. When you look at product and customer variables, you can understand
how different product attributes attract more or less sales and how different customers
respond to different products and feature combinations.
Types of Variables:
Dependent Variable - usually the things you care about but cannot affect
directly, such as profitability, customer satisfaction, and customer loyalty.
Independent Variable - can be directly controlled or manipulated, such as
price, features, advertising, and usability.
Learn more:
20).
2.4. Quantifying Qualitative Data
Qualitative data is often helpful by itself to explain the “why” behind low satisfaction
rates, higher sales, or high customer turnover rates. For example, if you see customers
complaining that they don’t know what the total price of their order is in local currency or
how to change the currency in a website shopping cart, you know what you can fix.
Comments provide immediate insight and potentially action (improve the currency
display on checkout).
Quantifying the frequency of customer comments helps you understand how prevalent
a certain attitude may be in your entire customer population. Some examples of open-ended
responses (often called verbatim responses) are common for things such as:
Reasons why customers are not recommending your product
Observations from customers using a product at their workplace
Product complaints in customer service calls
Tips in turning or converting qualitative data into quantitative data to to estimate the
prevalence of responses:
Group similar comments and behaviors.
Count the frequency.
Estimate the frequency.
Remember this:
Converting qualitative data into quantitative data helps us identify as to where we are
right now in achieving our business performance and also to identify the exact lacking
performance that we need to make up to. For example, we are at 50% achievement vs.
target of sales. We know by this that we still need to make up another 50% of the target
sales.
Learn more:
22).
2.3. Determining the Sample Size
Surveying a sample of customers is a tried-and-true method. Polling agencies that

measure electoral votes take the same approach: They ask only a subset of the voting
population to predict how the entire electorate will vote.
You can achieve a rather low margin of error after just sampling a small fraction of the
entire population. There is a diminishing return from increasing sample sizes beyond a
certain point. While you want your estimate to be accurate, you have to determine the
sample size you can afford based on your budget and company resources.
Learn more:
27).
2.4. Determining What Data to Collect
The art and science of customer analytics means turning metrics into insights. But you
need metrics to begin with. Metrics can be found all across an organization and a customer’s
journey.
You need to collect data from each of the following four customer analytics data types.
Descriptive - The descriptive data becomes the template for whom you
measure. It includes demographic data like gender, age, geography, and
income. It also includes self-described attitudes and preferences toward
products, categories, and technology. From this data, you can create
meaningful segments (for example, early adopters or value-seekers) and
personas. You can collect this data from purchases, registrations, surveys,
interviews, and contextual inquiries.
Behavioral: The behavioral data becomes the framework for testing

experiences. It is the general pattern customers exhibit when using your
products and services. It includes making purchases, registering, browsing and
using different devices. For example, customers of certain product categories,
like consumer electronics or home furniture, tend to browse products on their
tablet at night and make purchases on their desktop during the day.
Interaction - The interaction data becomes the task scenarios that you
simulate and measure during a usability test. It includes the clicks, navigation
paths, and browsing activities found on websites and software. The classic
usability test typically focuses on this level of granularity by simulating real
interactions. You can use real-time data from A/B testing, Google Analytics,
and lab-based or unmoderated testing to collect data for this grouping.
Attitudinal - Preference data, opinions, desirability, branding, and sentiments

are usually captured in surveys, focus groups, and usability tests.
Improvements you make that affect attitudinal data, like increased trust and
loyalty, drive further buying behavior.
Learn more:
28).
2.5. Managing the Right Measure
Managing customer experience (CX) is a challenge if you cannot measure it. But you
must be sure you are getting the right measure (or usually measures) to manage. The right
measure(s) will:
Identify the problem areas

Track improvements over time
Be meaningful to the customer
However, wrong measure(s) can:
Identify wrong areas of focus

Miss problems all together
Lead to unintended consequences
Alienate customers
Ways to measure customer experience (CX):
Conversion rate versus number of conversions - Conversion rates are the

central metric for testing better designs, ads, and campaign effectiveness. The
ratio of total users who purchase, register, or click (convert) to all users who
viewed the page is an effective ratio because you can compare low traffic and
high traffic pages. While this is a convenient metric, the total number of
conversions likely has a bigger impact on your bottom line than the rate.
Number of clicks versus time to destination - When you’re trying to make a

more efficient experience, reducing the number of clicks to accomplish a goal
seems like a good way to measure. Putting all functionality and content on one
page would certainly reduce the number of clicks, but that probably is not what
your customers have in mind. Too much functionality or content on one page
makes for an overwhelming experience; just make sure the paths customers
need to complete a task are clear
Call time or call satisfactorily resolved - Wonder why those often-scorned

customer service agents you call to complain to speak so quickly? If you want
to reduce call time in a customer support center, you can instruct agents to get
off the phone faster, but have you really increased service or quality if
customers have to call back? Often a simple follow-up question sent via email
can solve this problem.
Customer satisfaction as a bonus motivator - Many companies pay

bonuses based on achieving and exceeding certain customer satisfaction
goals. Unfortunately, and not surprisingly, this can lead employees to improve
their chances for getting the bonuses in ways that make measures less
meaningful.
Likelihood to recommend or likelihood to repurchase - With the popularity

of the Net Promoter Score, it may seem like word of mouth is the only measure
you should care about. But if everyone already knows about and owns your
product or visits your website, likelihood to purchase again might be a better
measure of growth. For measuring customer loyalty, using both repurchase
rates and likelihood to recommend must be measured as these provide mix of
both behavior and attitude.
On-time arrival versus on-time departure - Have you ever been on a plane
that pulled away from the Jetway only for it to sit on the tarmac waiting for
mechanical issues or other delays? You then arrive at your destination late? It
Is likely that the flight segment still counted as an on-time departure. You can’t
argue with the measure: The plane did pull away from the Jetway on time and
that does mean something. However, that action just doesn’t mean that much
to the customer sitting in the idled plane.
Learn more:
29).
Source / Suggested Reading:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (pp. 15-29).
1. Differentiate qualitative and quantitative data.

2. Differentiate discrete data and continuous data and provide at least five (5) examples
of each category of quantitative data.
3. Enumerate and describe the four (4) levels of data and list down five (5) examples of
data under each of the level.
4. What is a variable? What are the types of variables?
5. In your understanding, how does converting qualitative data into quantitative data help
business organizations in putting up their customer analytics initiative?
6. What are the types of customer analytics data that one can collect? Provide at least
three (3) examples of each type of data.
7. In your understanding, explain the importance of managing the right measurement
about customer experience.
8. Enumerate and describe the ways on how to measure customer experience.
CUSTOMER ANALYTICS
TODAY'S LESSON:
PLANNING A CUSTOMER
ANALYTICS INITIATIVE
CUSTOMER ANALYTICS:
Defining
Collecting
Analyzing
BASIC CUSTOMER ANALYTICS INITIATIVE
DEFINE what we want to do
Find the RIGHT WAY to measure it
DO SOMETHING about the measure
Put PROCESSES in place
MODULE OBJECTIVES
Outline the scope and goals of a

customer analytics initiative;
MODULE OBJECTIVES
Choose the appropriate metrics,

methods, and tools; and
MODULE OBJECTIVES
Set budget and sample sizes.

CUSTOMER ANALYTICS INITIATIVE OVERVIEW
Access to the "right" data
Making sure that the data that you need exists in

the business organization
Can be collected and analyzed for business
decision-making
Customer level data
Gathering data for each customer.

Identifying the transactions, revenue,
and survey data from individual
customers
Analytics that focus on

the customer
Customer analytics should give

the business organization a
clear picture or meaning
insights about the customers'
behavior
Getting buy-in
Getting support from the executives and

concerned stakeholders to implement the
insights obtained
Making sure that the customer analytics shall
cross customer touchpoints and be accessible
across the organization
1.D
2.C
3.C
4.B
GOAL SETTING: DEFINING THE
SCOPE AND OUTCOME
State the goals of the initiative.
10% conversion rate - target customers

to shift to online shopping
20% win-back rate - target inactive

customers to revisit and make a purchase
10% incremental sales - target increase

in the sales of a product/product line
GOAL SETTING: DEFINING THE
SCOPE AND OUTCOME
Write down the questions you want to

answer.
Specific
Measureable
Attainable
Realistic
Timely
IDENTIFYING THE METRICS,
METHODS, AND TOOLS
Look for metrics that are meaningful to the

customers
Identify the tools that you will need for data

collection (surveying existing customers)
IDENTIFYING THE METRICS,
METHODS, AND TOOLS
Customer transactions and purchase data (after survey):
- Access to customer data

- Transaction data at the right level
SETTING A BUDGET
Software
SETTING A BUDGET
SETTING A BUDGET
Data Warehouse
SETTING A BUDGET
SETTING A BUDGET
SETTING A BUDGET
SETTING A BUDGET
SETTING A BUDGET
SETTING A BUDGET
Time
SETTING A BUDGET
Cost
DETERMINING THE CORRECT
SAMPLE SIZE
You need larger sample sizes to

detect smaller differences.
For very large sample sizes, almost

all differences will be statistically
significant.
ANALYZING AND IMPROVING
Analyzing
Describing the current state of the customer and

identify the root cause of problems or insights to
make improvements.
Customer Loyalty:
Customers' likelihood to
recommend
Satisfaction ratings
CX feedback/ratings
Open-ended comments
(customer reviews)
Customer Loyalty:
Compute baseline Net

Promoter Score
Conduct a key driver analysis
Improving
Use of collected and analyzed data to show

quantifiable improvements (or reductions) in your
metrics
Conversion rates
Improvements in customer attitudes
Increase in revenue
Increase in number of repeat purchases
CONTROLLING THE RESULTS
Automatic reporting
Access to data
People and Process
NEXT LESSON:
SEGMENTING
CUSTOMERS / CREATING
CUSTOMER PERSONAS
WEEK 4
SEGMENTING CUSTOMERS
Overview:
Unless you have only one customer, you will want to understand how your customers
differ and how you can adapt to the differences. Customer segmentation is a powerful
technique to focus efforts and serve customers better.
A customer segment is a grouping of customers that share certain characteristics.

Understanding your customers — their similarities and differences — is one of the most
fundamental and essential steps in quantifying the customers’ relationship with your product
and company. Not only does segmenting customers tell you how to better serve current
customer demographics, but it also allows you to discover any unmet needs and deliver
better products and services in the future.
In this chapter, you discover how customer segmentation can improve the way you do
business and increase your profits, and of course drive retention among your customers.
Module Objectives:
1. Realize the importance and apply the advantages of segmenting your customers;
2. Explain the process of segmenting your customers; and
3. Analyze and transform the data to segmentize your customers.
Course Materials:
4.1. Why Segment Customers
Identify the most and least profitable customers

Improve marketing focus
Predict future purchase patterns
Build loyal relationships
Price products differently
Develop better products and customize products or service features
Create personas
Learn more:
46)
4.2. The Customer Segmentation Process
“Who”
➢ Gender
➢ Age
➢ Income
➢ Educational Level
➢ Occupation
➢ Marital Status
➢ Number and ages of children
“Where”
➢ Rural versus urban

➢ Domestic versus international
➢ City names and market size
➢ Region and states
➢ Zip codes
“What”
➢ What they have done:

✓ Most recent purchase
✓ Total number of transactions
✓ Product experience
✓ Total revenue
✓ Total profit
✓ Time spent with support
✓ Actual number of referred customers
➢ What they are doing:
✓ Motivations: business or pleasure
✓ Experience level: Power versus novice user
✓ Goals: Perhaps looking for a lawyer versus getting answers to
a legal question
➢ What they think:

✓ Lifestyle: Traveler versus homebody
✓ Values: Frugal versus spend-thrift
✓ Technology: Early adopter versus tech laggard
✓ Personalities: Risk seeking versus risk averse
✓ Overall product satisfaction: Low versus high
✓ Investing habits: Active versus occasional investor
➢ What they are like to do:
✓ Likelihood to recommend to friends
✓ Likelihood to repurchase
“When”
➢ Seasons: Christmas shopping versus ordinary time
➢ Weekends versus weekdays
➢ Life events: After a baby, marriage, or move
➢ Daytime versus evening
➢ Periodic activities: Get haircuts and buy toothpaste every five weeks
“Why”
➢ What are my customer segments and how are they defined?

➢ How many distinct groups do we serve — and how are they different?
➢ What customer segments deliver the most revenue and profit?
➢ What products and services appeal to which customer segments?
➢ How can I tailor communication to better address customers’ needs?
➢ Which consumers tend to shop/interact exclusively online and why?
➢ How and where should I leverage my customer loyalty program further?
“How”
➢ Online versus in store

➢ Phone versus in person
➢ Through a reseller versus direct
Learn more:
53)
4.3. Analyzing the Data to Segmentize the Customers
Step 1. Tabulate the data

Step 2. Cross-tabulation or cross-tabbing
Step 3. Cluster analysis
Step 4. Estimate the size of each segment
Step 5. Estimate the value of each segment
Learn more:
60)
Source:
1. State the importance of segmenting customers of your business organization.

2. Enumerate and explain the customer segmentation process.
3. Identify the steps of transforming your company’s data to segmentize your customers.
WEEK 4
CREATING CUSTOMER PERSONAS
Overview:
Personas are fictional customers based on real data obtained from customer
segmentation analyses, ethnographic research, surveys, and interviews.
The purpose of a persona is to better focus product development and marketing efforts
on real customer needs and goals rather than just abstract demographics. To make
personas more realistic, they get names like “Marcus” or “Shannon” and have pictures or
can even be life-sized cardboard cutouts.
While the people and pictures can be fictional, the details should be factual: Their
goals and characteristics should represent the real needs of a larger group of customers.
This chapter shall help you understand the ways personas can help product
development and marketing efforts for an organization.
Module Objectives:
1. Apply the personas in product development;

2. Identifying sources of data to build a persona; and
3. Turn the data into a persona.
Course Materials:
5.1. Recognizing the Importance of Personas
Learn from:
63)
5.2. Working with Personas
Learn more:
65)
5.3. Getting More Personal with Customer Data
Steps to build an effective customer persona:
✓ Collect the appropriate data

✓ Dividing data
✓ Identifying and refining personas
Learn more:
71)
5.4. Answering Questions with Personas
Learn more:
73)
Source:
Suggested Readings:
Web articles relevant to the topic.

1. Write at least 300-word reflection paper about the topic, “Creating customer personas.”
Focus and touch the discussion on the importance of creating customer personas in
business decision-making about the customer data, and the steps in creating an
effective customer persona.
WEEK 5
DETERMINING CUSTOMER LIFETIME VALUE
Overview:
If you have ever signed up for a credit card that had a low introductory interest rate, or
enjoyed a low cable subscription in the first year of signing up, then you’ve experienced
marketing strategies informed by a company’s analysis of customer lifetime value (CLV).
The CLV is the total profit that an individual customer generates for your business over
his or her lifetime. The customer lifetime is the time period that starts when a customer first
uses your business (in person or online) and ends when he buys his last service or product
from you. The CLV covers the entire relationship you have with that specific customer, or
segment of customers.
One of the primary reasons for segmenting customers is that not all customers
generate the same revenue or profits for an organization. Certain segments are more
profitable than others. Now, the next step is to understand how segments of customers differ
in the duration of their relationship with your business. The CLV is intimately linked to
customer loyalty. Some customer segments are more prone to loyalty and are therefore
more likely to cultivate long-term relationship with your business, thus generating more
revenue over their lifetime. Identifying the CLV of different segments enables you to balance
the acquisition costs of a new customer with expected long-term revenue. This knowledge
also helps you fine-tune your marketing strategy to acquire more high-CLV customers.
Module Objectives:
1. Acquire learning about the importance of customer lifetime value (CLV);

2. Determine the CLV; and
3. Apply the CLV to the profitability of the business.
1.1. Why Your CLV is Important
CLV gives us a good idea of how much total profit you can expect from a
customer
CLV helps us determine which goods or services justify higher marketing costs
or sales compensation
CLV helps us orient our marketing strategies based on customer segmentation
CLV is a good tool for forecasting future sales and profits, using resources
efficiently, and controlling costs.
Learn more:
77)
1.2. Applying CLV in Business
The CLV can be used to evaluate the amount of money that can reasonably be
devoted to customer acquisition. In order for your business to be profitable and financially
sustainable, it is essential that the CLV outweigh the customer acquisition costs. Otherwise,
your business is bound to lose considerable amounts of money.
To develop a marketing budget, you need to reflect on how much and where you will
invest your money:
Explore allowable acquisition cost

Explore investment acquisition cost
Learn more:
Sauro, J. (2015). Customer analytics for dummies. John Wiley & Sons, Inc. (p. 77)
1.3. Calculating Lifetime Value
Learn from:
78)
1.3.1. Estimating Revenue
Calculate how much money a typical customer (or a typical customer from a
specific segment) generates per purchase.
Estimate the frequency of the customer’s purchases.
Calculate the revenue per customer over a certain time period.
Learn more:
79)
1.3.2. Calculating the CLV
Learn from:
81)

strategy, and tools. Springer. (pp. 331-332)
1.3.3. Identifying Profitable Customers
Learn from:
1.4. Marketing to Profitable Customers
Learn from:
83)
Source:

strategy, and tools. Springer.
Suggested Readings:

1. Explain the importance of CLV in measuring customer profitability.

2. Compute the CLV a supermarket can get from a loyal customer assuming that the
revenue is P5,000.00 per purchase, the frequency of purchase is every pay day, and
the customer lifetime is 8 years.
3. The supermarket mentioned in item #2 has communicated consistently to the
customer through Viber Business Messaging, which costs P0.50 per successful
message received, and in a month the supermarket was able to communicate their
offers to that loyal customer for 10 times. Compute the CLV.
4. Cite examples of the application of CLV in industry practices. Note: This question
requires additional input based on your understanding of the topic, plus self-research.
CUSTOMER ANALYTICS
TODAY'S LESSON:
DETERMINING CUSTOMER
LIFETIME VALUE
DETERMINING CUSTOMER LIFETIME VALUE (CLV)
Free shipping Low interest rate Low-priced

vouchers on first Waived annual fee subscription fees
purchase (internet, cable)
Customer Lifetime Value (CLV)
The total profit that an individual customer

generates for your business over his or her
lifetime (Sauro, 2015).
Total worth to a business of a customer over
the whole period of their relationship
(Qualtrics)

(Qualtrics)

(Qualtrics)
MODULE OBJECTIVES
Acquire learning about the importance

of customer lifetime value (CLV);
MODULE OBJECTIVES
Determine the CLV; and

MODULE OBJECTIVES
Apply CLV to the profitability of the

business
CUSTOMER LIFETIME VALUE
(CLV)
Long-term measurement of the business'

profitability from their individual customers
during the customer's "stay" or "lifetime" with
the business or company
WHY YOUR CLV IS IMPORTANT
Gives the business a good idea how much the
total profit can be expected from each customer
Helps the business determine which goods and
services justify higher marketing costs or sales
compensation
Helps the business orient their marketing
strategies and campaigns based on set customer
segments
CLV is a good tool for future sales and profits,
using resources efficiently, and controlling the
costs.
INSPIRING CASE STUDIES OF CLV ANALYSIS:
Consumer Intelligence Research Partners estimates that
Amazon Kindle owners spend approximately $1,233 per year
buying stuff from Amazon, compared to $790 per year for
other customers. So Amazon pays close attention to
Customer Lifetime Value (CLV).
Amazon Prime has been developed to enable Amazon to

efficiently compete on price and to increase CLV. According
to a 2013 study by the Consumer Intelligence Research
Partners, Amazon Prime members spend $1,340 annually.
And that was 3 year ago. It’s more now. By applying
Customer Lifestyle Value (CLV) to the development of
Amazon Prime, Amazon knows how to get the most out of
their most profitable customer segments.
Source: Petersen, R. (2017, January 15). 9 inspiring case studies of Customer Lifetime Value (CLV). BarnRaisers. https://barnraisersllc.com/2017/01/15/case-
studies-customer-lifetime-value-clv/#:~:text=By%20applying%20Customer%20Lifestyle%20Value,style%2C%20and%20superb%20customer%20experience.
It’s estimated that Apple iPhone customers are valued anywhere between
$700-$900 every two years, which, over a 20-year time span, makes an iPhone
customer worth $8,000, on average.
However, such customer loyalty is only possible because Apple takes care of its
customers like no other brand out there – its customer retention is virtually perfect.
According to Crazy Egg, 67% of customers stop using particular products or
services when they feel they aren’t cared for. Again, Apple excels here with its
Genius Bars, places where customers receive free help and support if their product
is still under warranty.
On top of that, Apple has a dedicated online forum for each of its products with
experts commenting and solving customer question. This type of after-sales service
makes Apple customers feel valued and ensures their longevity as a loyal customer
to the extent that 90% of consumers who buy iPhones intend to buy the newest
iPhone when it’s time to upgrade. Without Apple’s adequate customer service, that
percentage would be a lot lower.
Source: Goldfein, J. (2019, May 2). Understand Customer Lifetime Value & Why Your Success Depends On It. Mercury.one. https://mercury.one/online-
business/understand-customer-lifetime-value-why-your-success-depends-on-it/
Crocs has always had a data-driven, customer-centric
approach to marketing. When the marketing team is
given a mandate to transform Crocs’ online business by
becoming less reliant on promotions and discounts, the
team is excited by the opportunity to improve Crocs’
profitability. The team tests to optimize promotions
aimed at customers who are predicted to churn, and
expands programs to coordinate a “no discount”
experience across site, email and display for customers
with the lowest price sensitivity. Crocs realizes 10X and
2X lift in revenue.
According to Nielsen, the typical family spends
over $1,000 on diapers and baby wipes during
the two-and-a-half years their children are in
diapers. A Nielsen study was able to quantify
the dollar value of key consumer segments, the
critical nature of brand selection at various
points in the consumer lifecycle and distinct
differences in channel choices through key
points in the baby care lifecycle. Kimberly-Clark
has a clearer picture of its target market and
where its greatest marketing and promotional
opportunities exist to extend and expand their
their market share.
An average Netflix subscriber stays on board for
25 months. According to Netflix, the lifetime value
of a Netflix customer is $291.25. Netflix knows that
customers are impatient and some customers
cancel because they don’t like waiting for movies
to arrive in the mail. Due to this they’ve added a
feature where you can stream movies on the web,
which not only satisfies your movie urge, but it
keeps you busy while you are waiting. By tracking
these stats and behavior, Netflix has reduced their
churn to 4%.
One of the most effective ways to boost Customer
Lifetime Value (CLV) is to increase customer
satisfaction. Bain & Co has found a 5% increase in
customer satisfaction can increase by 25% to 95%.
The same study shows it costs 6 to 7 times more to
acquire a new customer than keep an existing one.
Starbucks’ customer satisfaction has been reported
as high as 89%. Due to high customer satisfaction,
Starbucks’ Customer Lifetime Value has been
calculated at $14,099.
Has found people who regularly return items can
be some of your best customers. It says that
clients buying its most expensive shoes have a
50% return rate. Placing a priority on Customer
Lifetime Value, Zappos has identified their best
customers have the highest returns rates. They
are also the ones that spend the most money and
their most profitable customers. That’s why
Zappos has a 365-day returns policy, free two-
way shipping and doesn’t charge for returns.
APPLYING CLV IN BUSINESS
Customer Acquisition - CLV essentially outweighs

the customer acquisition
Marketing Budget:
Explore allowable acquisition cost
Explore investment acquisition cost
CALCULATING LIFETIME VALUE
A study on improving the shopmetro.ph's site features banking on our loyalty program:
Key Insights:
MRC customers on shopmetro.ph are 4.5x more valuable than non-MRC buyers:
3-PART PROCESS:
Estimating the revenue

Calculate the CLV
Identifiy profitable customers
Calculate how much money a typical customer

(or a typical customer from a specific segment)
generates per purchase - Get the average
revenue from several customers (per segment
or total market)
Example:
10 customers from a specific segment with average
purchase revenue of P1,500.00
Estimate the average frequency of the

customer's purchase (Purchase Frequency or
Purchase Cycle)
Example:
3x a week | twice a month | once in a quarter
Calculate the revenue per customer over a

certain time period - Multiply the revenue per
purchase by purchase frequency
Revenue over a certain time period = revenue

per purchase x purchase frequency
Calculating the CLV
CLV = Revenue per purchase x Purchase

Frequency x Customer Lifetime
Where:
Customer lifetime = target retention period for

customers
Calculating the CLV
In the sandwich shop example, assuming that

the revenue per purchase is $8,
the frequency of purchase is three times per
week, and the customer lifetime
is 20 years, the CLV is:
__________________________________
Calculating the CLV
In the sandwich shop example, assuming that

the revenue per purchase is $8,
the frequency of purchase is three times per
week, and the customer lifetime
is 20 years, the CLV is:
$8/purchase x 3 purchases/week x 52
weeks/year x 20 years = $24,960
Calculating the CLV
CLV = Revenue per purchase x Purchase

Frequency x Customer Lifetime x Profit Margin
Where:
Customer lifetime = target retention period for

customers
Profit Margin = % [Revenue - Expenses]
Two values can be used to refine your CLV
calculation:
Retention Rate - the percentage of the

customers who repurchase over a specific
period of time.
Example: If 800 out of 1,000 customers are still

customers after a year, the retention rate is 80%.
If you have the data, look at multiple years to
generate a more accurate rate of retention.
Two values can be used to refine your CLV
calculation:
Discount Rate - an economic notion that is

used to calculate the present value of future
revenues.
Customer Lifetime Value
= Revenue per purchase x Frequency of

purchase x Customer lifetime x Profit margin x (
retention rate) / (1 + discount rate – retention
rate)
Identifying profitable customers
Calculate the CLV for your different customer

segments and compare with the average CLV
MARKETING TO PROFITABLE
CUSTOMERS
To find out whether your efforts will pay off in the

future, calculate your marketing campaign (or
customer acquisition efforts) return on investment
(ROI)
CUSTOMERS
To calculate the ROI of your marketing campaign

to acquire new customers use the following
equation:
ROI = (CLV – Marketing cost per customer

acquired) / Marketing cost per customer acquired
CUSTOMERS
For example, if the sandwich shop spends $5000 on

advertising and finds that it obtains 50 new
customers, the cost to acquire a new customer is
$100. The ROI of the advertising campaign will
depend on the type of customer (frequent or
infrequent) that’s gained.
CUSTOMERS
For example, using the CLV of $5,242 for the

frequent customers from the previous example, the
ROI of this campaign is:
____________________________________
CUSTOMERS
For example, using the CLV of $5,242 for the

frequent customers from the previous example, the
ROI of this campaign is:
($5,242 − $100) / $100 = $51
For every $1 spent on advertising, $51 is gained

over the frequent customer lifetime.
CUSTOMERS
However, if the advertising campaign attracts

infrequent customers who may only purchase $6
once a month over 5 years, generating lifetime
revenue of $360 and a CLV of $75.60 (after
factoring in the profit margin of 21%). The ROI is
then:
____________________________________
CUSTOMERS
However, if the advertising campaign attracts infrequent
customers who may only purchase $6 once a month over 5
years, generating lifetime revenue of $360 and a CLV of
$75.60 (after factoring in the profit margin of 21%). The ROI
is then:
($75.60 − $100) / $100 = $−0.24
If the advertising campaign attracts infrequent customers,

over a 5 year period, the campaign will result in a loss of 24
cents for every dollar spent. Not a good investment at all.
CUSTOMERS
Increasing the CLV can be done by boosting the customer
satisfaction:
A higher satisfaction rate increases the frequency of purchases,

the amount of revenue generated each time, and your customer
lifetime. All those factors contribute to a higher CLV.
Satisfied and loyal customers are more likely to recommend
your products or services to their friends and colleagues, thus
enlarging your customer base.
The cost of acquisition of new customers is often much higher
than what needs to be spent to retain existing customers and
increase their purchases.
Customers who are highly satisfied provide free word-of-mouth
marketing!
NEXT LESSON:
MAPPING THE CUSTOMER

JOURNEY
WEEK 6
MAPPING THE CUSTOMER JOURNEY
Overview:
A customer journey map is a visualization of the stages that customers go through as

they become aware of, purchase, and use a product or service. It has clearly defined stages
and details customer touchpoints and metrics that quantify each stage.
A customer journey is a model of the path you want your leads to take from when you
first track them until they become customers.
The goal of a customer journey map is to identify problem areas customers have while
engaging a product or service and identify opportunities for improvement. It can also help
unify often disparate and competing efforts within the same organization by providing
different departments with a single document that maps the customer’s entire experience
with a product or service.
In this chapter, we are going to learn the importance of mapping out customer journeys
and walk through an example showing how to create one for yourself.
Module Objectives:
After the successful completion of this module, you should be able to:
1. Connect the marketing funnel to a customer journey map;

2. Follow the stages of a customer journey;
3. Visualize the steps a customer goes through;
4. Quantify pain points; and
5. Identify customer touchpoints.
1.1. Working with the Traditional Marketing Funnel
Learn from:
90)
1.2. What is a Customer Journey Map?
A customer journey map is a visualization of the phases a customer goes through

when engaging with a product or service.
Learn more:
93)
1.3. Define the Customer Journey
Finding the data

➢ Look for existing data
➢ Follow-me-home
➢ Analytic thinking
➢ Stakeholder interviews
➢ Survey your customers
Sketching the journey
➢ Pick a persona or segment
➢ Determine the stages:
1. Awareness
2. Consideration
3. Preference
4. Action
5. Loyalty
➢ Define the steps
➢ Identify the touchpoints
➢ Identify customer questions at each stage
➢ Map the pain points
➢ Define metrics for each stage
➢ Identify who is accountable in each stage in the journey
➢ Uncover the opportunities
➢ Periodically validate
Making the map more useful
➢ Make the journey map interactive
➢ Make it interesting
➢ You don’t have to include everything
Learn more:
101)
Source:
Suggested Readings:
Activity/Assessment:
Select one (1) of any customer journeys below and sketch out a customer journey map for
the situation that you have chosen:
A. A customer ordering skincare products for 12.12 sale from an e-commerce site.
B. A customer selecting a postpaid plan from a telecommunications company.
C. A customer browsing a car dealer website; and going to the physical dealer branch to
purchase a preferred car.
WEEK 7
DETERMINING BRAND AWARENESS AND ATTITUDE
Overview:
When marketers talk about brands, familiar companies and products come to mind —
think Coca-Cola, Nike, BMW, or Rolex. But think about the last time you purchased
something in a category about which you were unfamiliar with the brands — perhaps ceiling
fans, windshield wipers, or website hosts.
All things being equal, consumers prefer brands they know rather than brands they
have not heard of.
Customers generally progress through stages of the hierarchy of effects: They become
familiar with a brand, form an attitude about the brand through repeated usage, and finally,
become loyal to that brand. (It’s part of the customer journey).
The hierarchy of effects provides a framework for you to measure. Customers’

attitudes toward brands and products are constantly changing.
Module Objectives:
1. Value brand awareness and attitudes;

2. Measure brand awareness; and
3. Ask aided and unaided branding questions.
Course Materials:
8.1. Measuring Brand Awareness
You measure brand awareness using two approaches:
Unaided awareness: Asking customers what their favorite brands are

Aided awareness: Asking customers to rank brands from a list that you provide
Learn more:
107)
8.2. Measuring Brand Attitude
Learn from:
109)
8.3. Measuring Usage and Intent
Learn from:
111)
8.4. Understanding the Key Drivers of Attitude
Learn from:
8.5. Structuring a Brand Assessment Survey
Learn from:
112)
Source:
Suggested Readings:
Write a reflection paper on determining brand awareness and attitudes.

WEEK 7
MEASURING CUSTOMER ATTITUDES
Overview:
Customers have a range of attitudes. But when measuring a product or service

experience, you usually can only measure a certain number of attitudes, including
satisfaction, usability, trust, loyalty, luxury, and delight.
Customer attitudes include ideas, sentiments, feelings and beliefs toward a brand and
product. We will try to understand the most common ways of measuring customer attitudes
and then move on to constructing the right questions and scales.
Module Objectives:
1. Learn how to measure customer satisfaction to identify customers’ attitudes;

2. Rate usability;
3. Score brand affection;
4. Find expectations;
5. Measure the attitude lift;
6. Ask for customer preferences;
7. Find the key drivers of customer attitudes; and
8. Write effective customer attitude questions.
Course Materials:
9.1. Gauging Customer Satisfaction
Customer satisfaction:
Measure of how well a product or service experience meets customer

expectations
A staple of customer analytics scorecards as a barometer of how well a product
or company is performing
Levels of customer satisfaction:
General (relational)
Attribute (transactional)
Learn more:
117)
9.2. Rating Usability with the SUS and SUPR-Q
To measure attitudes toward usability, ask customers to rate how satisfied they are
with the ease of use of a product or a more specific feature or experience (attribute
satisfaction), or use one of two common industry questionnaires. These two questionnaires
provide a reliable measure along with industry benchmarks.
Learn more:
123)
9.3. Scoring Brand Affection
Learn from:
124)
9.4. Finding Expectations: Desirability and Usability
Learn from:
126)
9.5. Measuring Attitude Lift
Learn from:
127)
9.6. Asking for Preferences
Learn from:
129)
9.7. Finding Key Drivers of Customer Attitudes
Learn from:
131)
9.8. Writing Effective Customer Attitude Questions
Learn from:
132)
Source:
Suggested Readings:

1. What is your understanding about customer satisfaction and how do you think it is
being used to identify customers’ attitudes;
2. Explain what usability is and how to find usability rate.
3. Define what brand affection is and explain how it is used in measuring customer
attitudes.
4. What is customer expectation? Differentiate desirability and luxury.
5. Define attitude lift and explain how it is used in measuring customer attitudes.
6. Define customer preferences and explain how it is used in measuring customer
attitudes.
7. Enumerate the methods in finding key drivers of customer attitudes.
8. Explain how to write effective customer attitude questions.
CUSTOMER ANALYTICS
TODAY'S LESSON:
DETERMINING BRAND
AWARENESS AND ATTITUDE
LET US START THIS
LESSON WITH A GAME!
Before I share our game, I
need 10 volunteers. Please raise
your hand if you want to join.
GAME:
"BRAND" ME
BRING ME: Brand name edition
I will flash a product or a service on the screen.

Once I call your name, you should be able to mention a
brand for that product or service.
No repetition of brand names.
The person who will not be able to mention a brand within 3
counts will lose the game; and as a consequence, he must be
able to name all the brands being asked for on the next
round.
ROUND 1
ROUND 1
ROUND 2
ROUND 2
Photo editing software
How was our game related to
brand awareness and attitude?
Consumers prefer brands they know
rather than brands they have not
heard of (Sauro, 2015).
Hierarchy of effects
Provides a framework for you to

measure.
MODULE OBJECTIVES
Value brand awareness and attitudes;
MODULE OBJECTIVES
Measure brand awareness; and
MODULE OBJECTIVES
Ask aided and unaided branding

questions.
MEASURING BRAND AWARENESS
Approaches in Measuring Brand

Awareness:
Unaided awareness
Aided awareness
Approaches in Measuring Brand

Awareness:
Unaided awareness
Aided awareness
Unaided Awareness
What are your

favorite brands?
Which brands come

to your mind when
you hear...
Aided Awareness
We provide a list of brands to the

customers and ask them to
identify which ones they are
familiar with
Multiple-select questions;
customers can select as many
companies or products that they
recognize.
MEASURING PRODUCT OR
SERVICE KNOWLEDGE
MEASURING PRODUCT OR SERVICE KNOWLEDGE
Products:
iPhone
iPad
iMac
Macbook
Apple Pencil
Apple Watch
Services/Apps:
iCloud
iTunes / Apple Music
Siri
Services/Apps:
GMail
Search
Maps
Translate
Photos
Play
News
Meet
Chat
Docs, Spreadsheet, Slides
Forms
Classroom
MEASURING PRODUCT OR
SERVICE KNOWLEDGE
Customers may be less or more familiar with the

different products being offered by the different
brands.
How did you hear about this
product/service?
A. Television
B. Radio
C. Magazines
D. Out-of-Home / Billboard
E. Social Media (Facebook, Twitter,
IG)
F. Company Website
G. Friends
MEASURING BRAND ATTITUDE
Brand Attitude
What customers think and how strongly they

feel about the brand
IDENTIFYING BRAND PILLARS
Brand Pillar
Characteristics associated with the brand,
product, service, or experience.
Most important attributes and principles you
want to communicate through your brand.
Trust
Value Quality
Trust
Value Quality
CHECKING BRAND AFFINITY
Brand Affinity Analysis
Identifies the words customers associate with

your brand and experience
Can be manipulated or neglected
Think of the water bottle (tumbler) that you

are using.
Think of the water bottle (tumbler) that you

are using.
What words come to your mind?
Good Attributes:
Insulated
Clean
Durable
Handy
Bad Attributes:
Expensive
Heavy
Moisture
Brand Affinity Analysis
1. Ask customers which words come to mind when

they think of a product or brand.
2. Count the responses to see what terms are most
common.
3. Provide a list of specific words you want or do
not want associated with a brand and have
customers pick from that list.
MEASURING USAGE AND INTENT
Measuring Usage
Final stage of the hierarchy of effects
How much a customer has used the product in
the past and what the customer plans to do in
the future (intent)
MEASURING USAGE AND INTENT
Finding out past usage
You need to understand how frequently and

how often customers purchase your products
and your competitors’ products or services.
Provides an overall view of how customers
interact with each brand and how strong or
weak the relationship is for different customer
segments.
MEASURING FUTURE INTENT
Future intent
Helps provide information about awareness and

attitude to predict future sales.
UNDERSTANDING THE KEY
DRIVERS OF ATTITUDE
Understanding the Drivers of Attitude
Examine the comments that customers provide

Look for patterns and concrete examples of what
customers like and do not like.
Multiple Regression Analysis - examines the
correlation between the independent and
dependent variables to determine which attributes
contribute most to consumers’ overall brand
attitude
STRUCTURING A BRAND
ASSESSMENT SURVEY
Branding Survey Example:
Screening Questions
Unaided Branding
Aided branding
Brand satisfaction
Specific Product Knowledge
Brand Affinity
Product Satisfaction
Future Intent
NEXT LESSON:
MEASURING CUSTOMER
ATTITUDES

Customer Analytics Coverage

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Customer Analytics Coverage

Uploaded by

Copyright:

Available Formats

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES 1

After successful completion of this module, you should be able to:

1. Develop understanding about the concept of customer analytics;

1.1. Defining Customer Analytics

Customer Analytics includes the actions and activities such as:

Finding the insight

Critical ingredients of customer analytics:

1.2. The Benefits of Customer Analytics

1.3. Using Customer Analytics

Examples or applications of customer analytics:

1.4. Compiling Big and Small Data

Customer analytics involves the combination of:

Sources / Suggested Readings:

Smith, A. (2019). Consumer behaviour and analytics. Routledge. (pp. 1-25)

"The purpose of business is to

No. of social media

Develop understanding about the

Discover the benefits of customer

Sort through big and small data.

Use of data, information technology, statistical

Art of assembling data gathered through Business

Comprised of solutions used to build analysis

The study of data through statistical and

A process beginning with business-related data

Pricing (setting prices for consumer and industrial

Customer segmentation (identifying

Processes and technologies that give

Predictive Modeling Data Visualization

Information Management Segmentation

Customer Analytics (CA) includes the actions and

Critical Ingredients of Customer Analytics

Customer Analytics as Multidisciplinary

Customer Analytics as Multimetric

Customer Analytics as Multimetric

Extremely large datasets, often containing millions or

Finding insights with datasets that often contain less

Customer Analytics involves the combination of:

EMBRACING THE SCIENCE

Customers' actions and

Analytical thinking cap

Quantifying and qualifying data;

Identifying the types of data;

Deciding on the correct sample size;

Knowing what to measure.

How much revenue

Discrete (countable items)

Has finite values (buckets)

No. of products in the catalog

No. of FREE DELIVERY No. of impression No. of customers

Has infinite number of steps (continuum)

Chicken (1.0542 kg) Galunggong (0.54623 kg) Oranges (1.2843 kg)

Store's distance from

Delivery lead time

Price Delivery Time Product Color

Profitability Customer Satisfaction Customer Loyalty

Price Product/Service Features Advertising

Change the independent variables

Comments provide immediate insight and potentially

Quantifying the frequency of customer comments

Reasons why customers Observations from Product complaints in

Steps in turning qualitative data into quantitative

1. Group similar comments and behaviors.

To compute a 95% confidence interval, you need

The mean (for continuous data) or proportion