November 3, 2021

What is customer experience analytics?

minute read

Customer experience analytics is the process of turning information into insight. Using analytics to improve CX, you can enjoy improved customer engagement, revenue, and loyalty. Read on to learn more about what customer experience analytics is, how it works, and its many benefits.

The modern customer wants more than an ordinary brand experience; they expect extraordinary brand experiences.

In fact, several studies have shown that businesses that prioritize and efficiently manage the customer experience in retail are 3x more likely to achieve their business goals compared to their competitors.

Hence, you need to use customer experience analytics so you can gain insight to improve your customer experience strategy. Below is an in-depth look at customer experience, including its definition, its benefits, and the steps involved in performing customer experience analytics.

What is customer experience analytics?

To better understand customer experience analytics, it is best first to understand the term “customer experience.”

Customer experience

Also known as CX, customer experience is the general perception customers form about your company throughout their customer journey. CX includes every single interaction that a customer has with your business, including their interactions with your marketing, service teams, retail sales associates, and any other touchpoints you offer. The interaction can be negative or positive.

These interactions influence the customer's immediate and future purchases from your company. Furthermore, this interaction has the potential of influencing the purchasing behavior of people within the same network as current customers. By improving the digital customer experience, as well as the customer experience in retail stores, you create happy customers who refer your brand to others.

Customer experience analytics

On the other hand, customer experience analytics is the process that involves the collection, organization, and analysis of customer data to understand the experience you offer. Customer experience analytics' main aim is to understand the customers better so that a business can find ways to improve their interactions with the brand.

The data collected for the analysis includes purchase history, website engagement, customer reviews, email engagement, customer service interactions, and more. Simply put, CX analytics is the process of turning data into insight. Fortunately, most of this process is handled by dedicated software programs like Customer Data Platforms (CDPs) that operate behind the scenes.

Who benefits from customer experience analytics?

We have already mentioned that customers benefit from customer experience analytics because the changes that businesses make afterward aim to improve their interaction with the company. But is there someone else that benefits from CX analytics apart from the customers? The answer is yes. The other primary beneficiaries of CX analytics are as follows.


Customer experience metrics, including customer satisfaction and the Net Promoter Score, allows business executives to know the plus and minus points of the business concerning the way it relates to customers.

Moreover, some of the metrics can point to the exact features that a particular product lacks, and they can then add this critical information during product development. The company's top executives can make vital decisions regarding the best direction that the company can take based on the information they acquire from CX analytics.

Chief Marketing Officers

Out of all top executives, the Chief Marketing Officers (CMOs) are the ones who best know the benefits of a great customer experience to a business. They know the importance of having a fantastic customer experience throughout the customer lifecycle and how it ultimately affects their company’s marketing and business KPIs.

Since they have the duty of championing an amazing customer experience, they need the CX data at hand.

4 stages of customer experience analytics

When you are getting started with CX analytics, the first concept you need to grasp is the steps involved in CX analytics. Generally, customer experience analytics involves the following four stages:

Step 1: Data gathering

Data gathering is the first step. It involves setting up the right programs to collect the customer data that is going to assist you in understanding the way your customers have been interacting with your company. The programs are attached to all of your retail data systems, including your POS, email marketing software, and more.

Other customer data can also help you track the items that people purchase from you, how frequently they visit your store, how much money they spend buying your products, and more.

Step 2: Data organization

Every day, vast chunks of information are gathered by various retail data solutions. This massive overflow of data can be overwhelming if you do not know how to organize this data. Fortunately, you can keep the whole system efficient by finding a way to store the data into a single customer view.

One of the most common methods of storing this data in a single customer view format is integrating customer data with product data, third-party data from sources like Experian's Mosaic, predictive analytics tools, and other data sources. This method ensures that businesses can quickly access groups' and individuals’ data effortlessly.

You want to ensure that you mainly gather and organize omnichannel data that will help you get an insight into the brand experience you offer your customers.

Step 3: Analysis

This is the stage where you get the stats that will help you understand your customers’ experience. Having all the necessary data in one place, the customer analytics software will start working by looking for patterns and producing stats concerning your customers' behavior. Besides looking at what your customers are currently doing, the programs will help you gain insight into what your customers want at the moment, plus their possible future feelings and actions to help you improve retention rates.

Step 4: Display and Action

Lastly, once the programs have gone through all the data, the customer insights gathered will be put together, simplified, and displayed in easy-to-understand visuals. Once you get this data, you can start targeting troublesome areas and improve your acquisition, retention, and growth strategies.

Customer experience analytics tools and solutions

To make this process work seamlessly, you need a retail data analytics tool like CDP. CDPs act as the all-in-one hub for the data you gather from your different customer engagement channels. Learn more about measuring the impact of a CDP, including key metrics and KPIs to look out for.

There are 4 main types of CDPs, each with their own strengths and use cases. Thus, you will need to carefully go through every vendor when selecting the right CDP for your business. Read "Checklist: How to choose a customer data platform (CDP).”

Lexer is the Customer Data Platform of choice for leading brands like Quiksilver, Igloo, Nine West, Rip Curl, Supergoop!, and more. As the only CDP built for retail, we help the world’s most iconic brands drive incremental sales from improved customer engagement.

You can also contact us to have your questions answered.

Use the calendar below to book a demo of Lexer’s CDP-powered customer segmentation tools.

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Conner Jones
Marketing Content Manager
As a Marketing Content Manager, Conner utilizes his expertise in content development and strategy to help enhance awareness of the Lexer brand and better define the company voice. Conner finds energy and empowerment in telling the Lexer story whether that be through blog posts or in-depth marketing strategy playbooks.