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Is It Possible to Understand Your Amazon Customers?

In this article, you'll explore how you can use analytics to overcome the biggest challenge faced by Amazon Sellers -understanding your customers.
Rael Cline
Last updated:
May 24, 2022

Using analytics to overcome the biggest challenges faced by Amazon Sellers

Selling on Amazon can be daunting, and while there are always paths for Amazon Sellers to grow and improve, there are also consistently new challenges brought about by excessive competition and a confusing online landscape. But these are easily solved by simply understanding your customers — in fact, not having that understanding will inevitably stop and hinder your growth. 

Building a picture of your customers is no mean feat. But given the opportunity to…

  • Grow your business
  • Beat off the fierce competition
  • Make the most of your advertising spend
  • Exploit the new advertising reach Amazon provides

…it’s certainly worth the effort. And while Amazon is not that great at providing off-the-shelf customer analytics reports, the data is there. It’s just a matter of utilizing high-quality analytics tools to help you understand your customers. This blog is going to take you through the ins and outs of customer analytics, from the value they pose to your Amazon business to how you can actually draw them to develop profitable strategies.

Suggested reading: Our latest eBook You Don’t Understand Your Amazon Customers and Its Costing You provides examples of clients of ours that have seen tremendous growth thanks to customer analytics.

What you can do when you understand your customers  

We’ve touched on some of the opportunities from using analytics to gain insights on your customers. Let’s look at some of the challenges in more detail and, notably, how to overcome them.

Align your business to what the customer wants

You cannot underestimate the importance of understanding your customers’ demographics, spending habits, and preferences. If you have a clear picture of why your customer is using your product, you can create a compelling value proposition for them to come back to your business — and even develop better product listings. Committing to this path can bring immense benefits to your bottom line through better customer relationships and longer customer retention. 

Build a solid customer base

Everyone likes to feel appreciated and that extends to your customers. Obtaining and using customer data to inform your decision-making will make your business all the more engaging for your existing buyers. This leads to a happier consumer base and an inevitably better reputation in the marketplace due to positive customer reviews. Ultimately leading to greater acquisition of new customers — the Amazon flywheel in action.

Champion the right new products

Knowing what your customers like about your products and what they dislike is crucial to refining your offers to them. If you can identify best-selling ‘hero’ ASINs, you can categorize and highlight where sales are happening or even which products are gaining the most interest (AKA high-potential ASINs). Such insights indicate which products are worth introducing, keeping you on top of the ever-rising competition.

Enhance your existing products

The same information can be used to guide you in developing product enhancements and marketing these to existing customers. When you garner customer insight, you are well placed to bundle or cross-sell products. This can significantly increase your sales with relatively little development costs.

Better target your marketing campaigns

Given that any business has a limited marketing budget, it is vital to ensure that any marketing spend is as targeted and effective as it can be. The more you know about your customer base, the easier that will be.

Everyone wants to know the best way to speak to customers and which marketing channels to use to get and keep their attention. If you can frame your Amazon marketing campaigns to reflect your target customer goals, you can reach them when and where they want to be reached, and your conversion probability will be much higher.

You can also target offers and promotions, incentivize purchases, and even optimize bundling offers to increase the value and competitive edge of every sale made.

Improve sales

Following all of the above points will naturally improve your sales across the board: new products can be developed to target new and existing customer segments. These can be packaged up and promoted using the most relevant marketing channel. Your existing products will stand to gain even better profits from being enhanced the ‘right’ way. Most importantly, you’ll be able to lay the groundwork for sustained success and growth for your business by constantly revisiting customer data.

But how can you understand your customers?

We’ve outlined that an analytics tool is crucial to getting insights into your customers — but it has to work alongside approaches that you employ in your own strategies. Here’s what to keep in mind throughout the process of understanding your Amazon customers. 

   1. Build your demographics

The more you know about the demographics of your customer base, the easier it will be to refine and target your products and marketing campaigns. You want to segment customers into at least age and sex, but the more details you can discover, the more valuable your demographic data will be.

Privacy concerns can make this complicated at times, but knowing that most customers are, for example, new mothers or young professionals will have a massive bearing on decisions for new products or marketing strategies.

  2.Use Customer Lifetime Value (CLV) to guide you

Thinking of customers first — especially those that are identified as the most profitable and important — will dramatically improve your strategy. The vital metric for understanding your customers’ activity? Customer Lifetime Value (CLV).

CLV makes you think, not just about a sale, but the complete journey a customer takes when interacting with your business. It identifies your ‘profit per customer’ over the entire lifecycle. Once you know CLV, you can use it in your business in many ways.

While CLV has a role to play in all Amazon marketplace actions, it has a particular place when it comes to strategizing how you can grow your business. At a macro level, analytics like CLV and CAC (customer acquisition cost) ratios make it possible to ensure business strategies are devised off the back of informed spending and long-lasting value.

  3. Learn from your advertising

Effective customer analytics leads to tactical campaigns based on customer profiles rather than products themselves. By applying analytics, you can gain a much-needed edge, especially when you can embrace every aspect of Amazon marketing, such as…

  • PPC campaigns: Analyzing your PPC campaigns enables you to better tailor keywords and bids based on what you find. Segmenting customers according to CLV will make it possible to work out the most viable prospects to pitch to by winning with the right keywords and promoting your most high-performing products.
  • Amazon SEO: Organic search is driven by factors including relevance, popularity, and competitiveness. Customer analytics enables you to understand these factors to create A+ content using key terminology and hero ASINs.
  • Amazon’s demand-side platform (DSP): DSP makes it possible to increase reach on and off Amazon. While it does provide some audience insights, its effectiveness primarily comes back to applying its data to understanding how CLV relates to ASINs and keyword strategies.

Suggested reading: Check out our guide How to Improve Your Amazon Customer Analytics in 2022 for more insights on how to improve your customer metrics — in 2022 and beyond! 


The art of the possible

The short answer to the question is: yes, it is possible for Sellers on Amazon to understand their customers. The long answer is that it isn’t easy without the help of the right analytics tool that can develop and add to that understanding over time.

Data in the Amazon ecosystem can quickly get out of control, and it often feels like you need a degree to figure out what it means, let alone how it can impact your online selling strategies. Nozzle simplifies this otherwise unruly analytics mess into one easily accessible source. You don’t need AI qualifications to navigate it, and it provides you with insights your competitors just can’t get.

Our approach covers everything from CLV right through to ad management. We aggregate disparate Amazon data to make it far easier to recognize trends, make comparisons, and gain insights that can inform your strategies for success and growth.

To understand the art of the possible, go ahead and book a call to see precisely what Nozzle can do to help you understand your customers.

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