What is Digital Analytics? The Complete Guide
Digital analytics spans a range of tools and processes to measure and analyze user interactions with your app or website. Here's how it all works.
Benefits of digital analytics: Why is it important?
Users expect a seamless and personalized customer experience every time they interact with your brand—and the stakes are high if you don’t deliver. Seventy-six percent of consumers would stop doing business with a company after just one bad customer experience. Personalization is no longer a bonus, but a necessity. This is impossible to deliver without a steady supply of data—94% of businesses say data and analytics is important to their growth.
The problem is, while many teams find themselves buried in data, a lot of it may be worthless. Over 80% of data collected by enterprise organizations is either siloed or unstructured—meaning it can’t be processed, organized or analyzed by machine learning algorithms. This is dark data—or as Gartner puts it, “information assets organizations collect, process and store during regular business activities, but generally fail to use for other purposes.”
On the flip side, companies might guide their decision-making with static personas and top-level metrics, like pageviews, downloads or purchases. This data can be equally problematic on its own. If you’re not also drilling down into user interactions, personalization can feel disconnected and hollow.
Digital analytics is your best defense against data deprivation and overload. It provides a solid framework for continually gathering, measuring, analyzing and interpreting data you can actually use to deliver—and scale—real personalization for your prospects and customers.
Top 3 benefits of digital analytics
Digital analytics tools and processes can vary wildly by organization. Some teams manually stitch together multiple data outputs into a single spreadsheet, while others rely on a fully loaded digital analytics ecosystem with automated integrations. Generally speaking, however, there are some serious advantages to systematically tracking and assessing behavioral data from your digital sources. These include:
1. Understanding your users—in the right way
Users may demand personalized experiences whenever they interact with your brand, but they’re also fiercely protective of their data.Nearly half (48%) of consumers have stopped buying from a company over privacy concerns.
So how do you strike the right balance between personalization and privacy? The good news is, you don’t need to understand users in every aspect of their lives to deliver an outstanding customer experience—just the pain points that are relevant to your business. In fact, 83% of consumers are willing to share their data to enable a personalized experience.
Digital analytics can capture a lot of nuance in user behavior, but only through direct interactions with your brand and product. This affords deep insight using the right data, in the right way.
2. Accurately measuring performance
Users don’t just expect a personalized experience. It also has to be seamless and consistent from one interaction to the next. This can be a challenge when you factor in the sheer volume of touchpoints. More than 50% of customers engage with three to five channels, while B2B buyers average 27 interactions before they make a purchase decision.
Buyer’s journeys are often complex and nonlinear, and one channel can easily cause friction in another—like a customer having to repeat information to a live agent that they already shared with a chatbot, or a digital ad misrepresenting the content on a landing page. That’s why it’s not enough to evaluate channels or campaigns in isolation. You need to see how all the pieces fit together to accurately measure performance.
Digital analytics gives you the ability to capture disparate interactions across multiple channels and combine them into a unified, 360-degree view of the buyer’s journey. It’s equally important to track, measure and analyze interactions after prospects convert into customers. Providing a seamless experience on the path to purchase only to throw users a curveball with friction in the actual product is a recipe for churn.
3. Effectively optimizing campaigns and conversion rates
One great thing about digital analytics is the flexibility. You can use the same behavioral data to form a holistic view of the buyer’s journey and drill down into specific channels, campaigns—even app or product features—to identify patterns, trends and sources of friction.
This can mean a serious boost to conversion rates, since optimization efforts are informed by real user behavior, rather than more general KPIs or guesswork. According to McKinsey, organizations that leverage customer behavioral insights outperform peers by 85% in sales growth and more than 25% in gross margin.
You can even supplement digital analytics with transactional data to connect different touchpoints to revenue and growth.