How Businesses Track Customer Behavior

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How Businesses Track Customer Behavior

June 15, 2014 by

 Tracking customer behavior has been a pet rock of mine since I started working in customer success several years ago.   I believe in a SaaS model it is critical to know how your customers use your software for several reasons:

1.     Know what features to develop

2.     Intelligently engage customers based on what they do

3.     Identify patterns in usage to find potential upgrades and at-risk customers

4.     Measure Customer Success / Onboarding Employee performance

The question though is who should develop this functionality.  Is it something you build in-house or outsource?  I was curious to know what other companies are doing so I posted a poll in The Customer Success Management Forum (a great group on LinkedIn).  I have to admit I was a little surprised by the results.

 

Why was I surprised?  Well first off I didn’t expect anyone to say they don’t track customer behavior!  It’s so common now, even in traditional brick and mortar stores (think about every time you scan your CVS card when you make a purchase), that I thought everyone in the group would be tracking behavior.   If you happen to be one of the two responses who don’t track and you’re reading this article, I’d be very interested in knowing why.

The other thing that surprised me are all the people building it in-house.  The reason is that it’s a huge investment to build this.  If you have 2 developers spend 3 months on this, it could easily cost you $50,000 or more to build.  Not to mention the upkeep you’ll need to do.

I also remember when I worked at a company building this in-house, it was a constant tug of war with operations and product.  We, as the customer team, would want to get more data or improve the algorithm used to score customers, and we always needed to weigh that need against developing new features or improving existing ones in our product.   All valid concerns but when you’re anxious to track a new feature and it take 3 months to do so, it can be frustrating.

Had I known at the time it might be possible to just purchase customer tracking software, I would have pushed to go that route.  In the end it would cost a lot less, we’d have a nice and clean UI instead of using excel or reports in Salesforce, we’d get the results we want quicker, and we’d have people who specialize in this field building the software.

Check our blog in a few days as I’m going to ask a follow-up question in the group to find out why people who are building it in-house chose to do so and their experiences.  I’ll share what I find.

Also, feel free to leave a comment below.  I’d be happy to respond and discuss this topic more.

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