Predicting the future is a skill most business owners wish they had, especially when they’re getting started. Will the investment of time and capital pay off? Forbes reports that eight of every 10 new businesses fail within a year and a half, in part because they don’t understand their customers’ behavior. Customer data analytics raises the odds of success by tracking customers’ behavior by segment and over time. Businesses can use this information to spot potential problems before they hurt the bottom line.

When sales are declining or stalled

Declining sales are not the start of a problem but the result of other problems that the business didn’t identify or address earlier. Stagnant sales are usually a warning sign of decline, although business owners may not realize it or may blame stagnation on outside factors such as the broader economy. This Entrepreneur article points out that stalled sales can indicate a lack of customer acceptance that precedes a drop in sales.

To know for certain why your sales have stalled, you need to review your existing customers’ purchase data and demographic and income changes over time, and then develop ways to better serve them. You also need to analyze your marketing and value proposition to make sure you’re delivering a clear and effective message to your audience.

When sales are growing

The ideal time to spot future sales declines is while sales are still growing so that your business has more time and options for correcting problems. An example of a warning flag, from the Entrepreneur article, is a decline in repeat business and referrals from previously loyal customers. You may be tempted to think that new or less frequent customers will continue to make up the difference—sales are still growing, after all.

However, repeat business and referral declines are a strong sign that you need to closely evaluate your customer loyalty metrics. If long-time customers are dropping away, the new customers generating sales growth may not ever become loyal. Your customer acquisition costs may rise, and when there are no more new customers to reach, sales will decline.

By monitoring customer data trends, you can get a clear picture of your customers’ purchasing habits, responses to promotions, and participation in referral programs. You can also see if your best customers are changing their behaviors in other aspects of their lives that will affect their buying habits. For example, if your best customers are moving out of your area to suburbs across town, you must compensate for this trend by seeking similar nearby customers and earning their loyalty. If your best customers are moving into new stages of life — purchasing homes for the first time, or having children — their spending habits are almost certain to change.

Data analytics can also show you if you’re depending too heavily on your best customers for sales growth. This article by RS4 asserts that overreliance on referrals and repeat business can set a company up to fail when the market changes, because there’s no other marketing program in place to reach new customers. Your data can show you how many new customers you’re bringing in, how much they spend compared to your best customers, and what promotions work best to get new customers in the door.

To learn more about how you can use customer insights to predict trends for sustainable sales growth, contact us at or +1 (888) 855-0855.




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