customer analysis example business plan

How to Write a Customer Analysis

Elon Glucklich

9 min. read

Updated October 27, 2023

You’ve been hard at work conducting market research into your potential customers— developing a deep understanding of industry dynamics and the potential size of your market .

Hopefully, you’ve also spent time interviewing potential customers—learning about their behaviors and needs, and digging into publicly available data to support your research.

But you still need to document these findings in a way that gives you an actionable road map to grow your customer base.

This is where a well-written customer analysis can be extremely useful.

Including a customer analysis in your business plan will boost your marketing efforts by identifying your target customers , their needs, and how your product or service addresses these needs.

Customer analysis vs market analysis

A market analysis is a broader exploration of the market and potential customers. A customer analysis zooms in on the specific behavioral or demographic characteristics of individual customer segments in your target market.

The market analysis includes details like the number of customers you hope to serve and the types of competitors you must contend with.

By contrast, the customer analysis looks at the specific attributes of your potential customers – their personal habits, values, beliefs, and other characteristics that might affect their purchasing decisions.

What should a customer analysis include?

Demographics

Some of the earliest information you’ve collected probably about your customers includes:

Gender/ethnicity
Income level
Geographic area
Education level

Example: Suppose you own a business that creates an environmentally friendly cleaning product . Your customer demographics might include:

Age range: 30-60 (old enough to have used a variety of cleaning products in their homes)
Income: Above average (more likely to buy a higher-priced alternative to discount cleaning products)
Education level: college degree or equivalent (high enough education level to understand the product’s societal benefits).
Employment: full-time employee

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Values and beliefs

This section captures the psychological and emotional factors that influence customer behavior.

Cultural backgrounds
Ethical values

Let’s return to the environmentally friendly cleaning product example. You are more likely to attract customers who prioritize sustainability and are willing to pay more for products that match their values.

Buying behaviors

Analyzing buying behaviors involves understanding how, when, and why customers purchase. These behaviors impact:

The channels customers prefer for shopping
Price sensitivity
Factors that trigger a buying decision

Example: Suppose you’re running an environmentally friendly cleaning products business. In that case, you might discover that most of your customers buy their cleaning products from a magazine for homeowners or that they typically buy multiple cleaning products simultaneously.

Technology use

Nearly three-quarters of small businesses have a website . Even if your business doesn’t have one, your customers are, without a doubt, browsing the internet.

So it’s critical to understand how your target customers interact with technology and to set up an online presence for your business if you aren’t already active.

Key questions about customers’ technology habits include:

Are they active on social media? If so, which platforms?
Do they prefer online shopping or in-store visits?
Are they more likely to respond to email marketing, blog content, or social media campaigns?

Example: Let’s say you discover that significantly more of your target customers visit websites like yours on a smartphone than a desktop. In that case, it would be important to optimize your website for mobile viewing or develop a user-friendly app .

5 steps to write a customer analysis for your business plan

Now that we understand the individual pieces of a customer analysis, we’ll examine how to write a customer analysis for your business plan .

1. Use existing data

Regardless of your country, there are likely numerous sources of data published by government agencies, private industry, or educational institutions that could be relevant to your business.

Finding existing data is the best starting point for your customer analysis. It’s easy to find, it’s regularly updated, and it’s immensely valuable for providing context for your research.

For instance, if you determine that your target demographic is people between 30 and 60, Census data can help you determine the number of residents in your selling area within that age range.

We’ll look at some examples of publicly available data for businesses operating in the United States.

U.S. Census Bureau

The Census Bureau publishes official population counts for the country, states, and local communities. Demographic characteristics like age, gender, and race sort the data. Census data also includes useful data for businesses, such as the total number of businesses, employment counts, and average incomes in local communities across the country.

Bureau of Labor Statistics

Data from the Bureau of Labor Statistics tracks changes in the U.S. workforce and the overall state of the labor market. The BLS publishes the Consumer Price Index , tracks consumer spending, and gauges overall consumer confidence.

Examining this data can give you insights into the willingness of consumers to pay for your product or service.

Bureau of Economic Analysis

The Bureau of Economic Analysis takes a broader look at the performance of the U.S. Economy. You can use BEA data to find personal income and corporate profit data by industry.

If you make a product or service used by other businesses, these figures can help you understand the financial health of the broad customer base you’re targeting.

Federal Reserve

The Federal Reserve publishes various financial reports, such as consumer credit and spending statistics , as well as the health of banks.

This data can give you important context about the financial health of your customers, which could help you determine pricing strategies—like whether you should offer flexible payment plans.

Industry associations

There are thousands of private sector industry associations in the United States alone. These organizations not only advocate for the businesses in their field. They provide members with a wealth of helpful information, such as “state of the industry” reports and business surveys.

You should leverage customer data from these peer organizations as a business owner.

Academic institutions

Many university business schools make their research publicly available online. Scholars make a career out of researching market and industry trends, and much of their work is available through online searches.

2. Review customer feedback

One of the most direct ways to show an understanding of your customers in your analysis is by reviewing their feedback.

If you’re a new business without direct customer feedback yet, that’s OK. Instead, look around at what people are saying about your competitors . You might find common complaints from customers in your industry about the products available.

You can then reach out and interview potential customers to better understand their needs.

If you have an existing business, there may already be reviews of your company on Google or social media sites like LinkedIn. Doing so can help you determine if customers are struggling to use your product or have suggestions for improvements.

Read as many reviews as possible, and use them to show an understanding of your customers’ needs in your analysis.

3. Use third-party data

So far, we’ve discussed free, publicly available sources to find information about your customers.

But for those willing to dig deeper, third-party data providers can help you uncover information that’s truly unique to your business and your customers.

Google Analytics

Third-party data providers like Google track the activity of users across numerous websites. Google has its own tool, Google Analytics , which makes that information available on your company’s website.

This data is a gold mine for understanding your customers. Besides giving you a demographic and geographic breakdown of your visitors, it can tell if they view your site on a desktop or smartphone, what pages they’re clicking, navigating around your site, and much more.

For new business owners, Google Trends is a powerful tool to discover what people are searching for online.

For the environmentally friendly cleaning products business we’ve used as an example—you could see how many people are searching on Google for information about products like floor cleaners or dishwasher detergents.

Social media metrics

If your business uses social media, there are plenty of tools to help you understand your audience on these platforms.

Many social media companies make their data available to businesses at a cost. For instance, the Facebook Audience Insights platform gives you information about the types of people who visit your page or interact with your posts.

There are also third-party tools like Hootsuite, Sprout Social, and Buffer, which track various metrics across social media platforms.

Wherever you find the data, including social media metrics in your customer analysis provides instant feedback about how customers interact with your business.

Specialty tools

Software companies have created numerous tools that collect and analyze customer data from various online sources.

Audience research tools like SparkToro and FullStory analyze large amounts of data online and spot trends—such as the topics people discuss online and which websites or social media accounts those audiences visit.

These are insights that would be incredibly time-consuming to get directly from customers. However, understanding where potential customers spend time online and what they talk about can easily turn your analysis into a targeted marketing campaign that addresses their needs.

4. Create a customer persona

After gathering and analyzing all this data, you should have plenty of information about your customers. The next step is to create a customer persona . In case you need a refresher, the customer persona is a semi-fictional representation of your ideal customer based on your collected data.

For example, a customer persona for that environmentally friendly cleaning products business will reflect that audience’s demographics, behaviors, and needs.

Example of a written customer persona. Name of the persona is "Nature's Cleaners". It includes demographics, values and beliefs, buying behaviors, and technology use.

In addition to being an effective tool to focus your marketing efforts, creating this persona can help determine the size of your customer base and how to prioritize your time and resources to attract them to your business. It’s also helpful to show potential investors you know your target audience.

5. Connect to your problem/solution statement

Many business plans include a problem and solution statement as early as the introduction. It’s a reasonable way to start, considering that successful businesses identify a problem and provide a solution.

So as you put your customer analysis together, ensure the research is grounded in the problems they’re experiencing. Doing so will keep you accountable by making you validate your product or service as the solution they need.

Get started with your business plan template

A customer analysis is a key part of any business plan. But it’s just one piece. At Bplans, we take some of the pain out of business planning.

We’ve developed a free business planning template to help reduce entrepreneurs’ time to create a full, lender-ready business plan.

Bplans has also collected over 550 free sample business plans across numerous industries. Find one that fits your industry to get inspiration and guidance when writing your plan.

Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

Table of Contents

10 Min. Read

How to Create a Detailed User or Buyer Persona

8 Min. Read

How to Conduct an Industry Analysis

3 Min. Read

How to Use TAM, SAM, SOM to Determine Market Size

4 Min. Read

How to Define Your Target Market

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How to Write a Customer Analysis for a Business Plan

March 21, 2024
Business Plan , How to Write

Understanding your customers is essential for any business striving for success. A customer analysis provides valuable insights into the demographics, preferences, behaviors, and needs of your target audience .

This guide will walk you through the process of writing a thorough customer analysis, enabling you to tailor your products, services, and marketing strategies to meet the needs of your customers effectively.

Define Your Target Audience

Begin by clearly defining your target audience : the specific group of people you aim to serve with your products or services.

Consider factors such as age, gender, income level, geographic location, and psychographic traits (e.g., lifestyle, values, interests). Understanding who your customers are is the first step in building a successful business strategy.

Example for a Coffee Shop : Your target audience might include young professionals aged 25-40, living in urban areas, who value high-quality coffee and a relaxed atmosphere for socializing or remote work.

Gather Data on Your Customers

Next, gather data on your customers through various sources, including market research surveys, interviews, focus groups, and customer feedback.

Analyze both quantitative data (e.g., demographics, purchase history) and qualitative data (e.g., customer feedback, testimonials) to gain a holistic understanding of your customers’ needs and preferences.

Example for a Coffee Shop : Conduct surveys or interviews with your target audience to gather insights into their coffee preferences, frequency of visits to coffee shops, and reasons for choosing one coffee shop over another.

Segment Your Customers

Segment your customers into distinct groups based on common characteristics or behaviors.

This segmentation allows you to tailor your marketing efforts and product offerings to better meet the specific needs of each segment. Common segmentation criteria include demographics, psychographics, behavior, and purchasing patterns.

Example for a Coffee Shop : Segment your customers based on their coffee preferences (e.g., espresso lovers, latte enthusiasts), frequency of visits (e.g., daily customers, occasional visitors), and reasons for visiting (e.g., socializing, work meetings).

Analyze Customer Needs and Preferences

Analyze the needs, preferences, and pain points of each customer segment to identify opportunities for product or service improvement.

Consider factors such as price sensitivity, convenience, quality expectations, and brand loyalty. This analysis will help you tailor your offerings to better align with customer expectations.

Example for a Coffee Shop : Analyze customer feedback to identify common preferences in coffee flavors, brewing methods, and food options. Use this information to adjust your menu offerings and pricing strategies accordingly.

Assess Customer Behavior

Examine how customers interact with your business at each stage of the buying process, from awareness to purchase and post-purchase.

Identify patterns in customer behavior, such as browsing habits, purchase frequency, and loyalty. This analysis will help you optimize the customer experience and maximize customer satisfaction and retention.

Example for a Coffee Shop : Track customer traffic patterns, peak hours, and popular menu items to optimize staffing levels, inventory management, and promotional strategies.

Identify Growth Opportunities

Based on your customer analysis, identify growth opportunities for your business. This could involve expanding into new customer segments, introducing new products or services, or entering new geographic markets.

By understanding your customers’ needs and preferences, you can better position your business for long-term success.

Example for a Coffee Shop : Identify opportunities to expand your customer base by offering specialty coffee subscriptions for remote workers or partnering with local businesses to host networking events.

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How to Conduct An Effective Customer Analysis in 8 Steps

Effective customer analysis is the key to business success.

Understanding customers’ unique needs and expectations allow companies to better meet these needs. From marketing campaigns to onboarding programs, catering your product experiences to your customers improves satisfaction and retention rates.

Let’s take a closer look at what customer analysis is, its benefits, and how to get started.

Customer analysis is the act of researching and analyzing customers to gather a complete profile of them and their behavior.
Customer analysis is important because it helps you create a personalized marketing strategy , reduces churn and increases retention , helps you make smarter product improvements , and helps you identify your most valuable customers (your target market).
To get started with customer analysis, start by structuring your existing customer base. Organize your customers into customer segments that share common characteristics.
Then, collect direct customer feedback with in-app surveys . You can use CES , CSAT , and NPS surveys across the entire customer journey.
Gather insights about your customers from internal teams. Every department likely has unique insights into customers based on their interactions with them. Share customer insights across departments so you don’t miss out on critical information.
Leverage product analytics to do a customer behavior analysis and get a better understanding of how customers interact with your product.
Perform social listening on social media and review sites to see an unfiltered look at what customers are saying about your brand.
After completing your customer analysis, create user personas based on real customer traits. Buyer personas are great to turn to when planning your marketing campaigns or when you want to make product improvements.
Build a customer journey map to make sure you’re hitting all the touchpoints and understanding how customers engage with your brand at every moment.
The two top customer analysis tools of our choice are Semrush and Userpilot.
With Userpilot , you can analyze customer behavior, run surveys, and create customer segments. Then you can build in-app product experiences to improve customer loyalty and satisfaction.
With Semrush, you can see what marketing channels your website visitors come from (so you can prioritize the best channels). You can then build segments and create user personas.

What is customer analysis?

Customer analysis is the research you do to understand your target market and your customer base. Analyzing customers helps you build more in-depth and accurate customer profiles so you can meet their needs better.

Why is customer analysis important?

Here are the four main reasons why customer analysis is essential:

Create a personalized marketing strategy

Customer analysis helps you optimize your marketing campaigns .

You can then build a more informed marketing plan that engages customers in their preferred channel, with an impactful message, at the right time.

Reduce churn and increase customer retention

Customers churn because products don’t fulfill their expectations.

By understanding their challenges and pain points better, you can tailor your product, training, and experiences to their specific needs and retain them .

Make smarter product improvements

Customer analysis helps you make more informed product decisions. You’ll be able to create new features or make product improvements that will give customers the most value.

Take a look at your product analytics to see how current customers are using the product – are they using certain features more or less?

Observing customer behavior will help you determine what features customers find most useful and what areas may need improvement to increase usage.

I dentify your most valuable customers

With customer analysis, you can pinpoint exactly who your superstar customers are.

This will help determine which market segments to prioritize and how much effort to put into each one. Look at the type of people who have spent the most or stayed with you the longest – these are the ones with the highest customer lifetime value . Do they represent a certain demographic?

Focus on keeping those customers happy and acquiring more like them. They’re an ideal customer and catering to them will lead to faster productivity growth.

How to conduct a customer analysis

Try these nine strategies to conduct a customer analysis:

Structure your existing customer base

You should start the customer analysis process by identifying your potential customers and defining their specific characteristics.

The customer database is a great place for established businesses to begin gathering the above data. Most likely, you already have plenty of data, but you might need to structure it to make sense of it.

To do this, you need to divide your customer database into groups based on similar characteristics. This process of dividing up data is called segmentation .

There are lots of categories you can use to segment customers , including:

Demographic (age, education, gender, etc.)
Geographic location (countries, cities, urban or rural areas)
Behavioral profile (how they interact with your product)
Company size
Psychographic (their challenges, goals, values, interests, etc.)

By understanding customer preferences through careful segmentation, companies can deliver targeted experiences, increase conversion rates and retain more customers in the long run.

Identify the needs of your customers

Through customer analysis, you can figure out what pain points you’re solving. Customers turn to your brand because they have a goal and they see you as the potential solution.

Doing this will help you to better understand how to create a post-purchase experience that promotes loyalty.

Collect direct customer feedback with in-app surveys

In-app surveys are one of the most commonly used and effective methods of collecting quantitative and qualitative data from your customers.

You can use different types of surveys at different touchpoints, such as customer effort score (CES), customer satisfaction (CSAT), and net promoter score (NPS) surveys.

Surveys that use both quantitative and qualitative methods give the most well-rounded insights. For example, you collect quantitative data with an NPS survey that asks customers to score how likely they are to recommend your product to a friend or colleague.

After collecting their response, you can trigger a follow-up open-ended question to get more context around their answer.

Invite your customers to one-on-one interviews

An interview can be a great way to empathize with your users as it provides insight into their values, perceptions, and experiences. In these discussions, you are free to ask specific questions while remaining open to participants’ viewpoints.

The advantages of interviews over other methods are they less time than some other user research methods and it’s easier to ask follow-up questions for more detail and accuracy.

You can invite your users to an interview using different in-app messages, such as slideouts.

Make sure to practice gratitude and incentivize them with a small reward , like a gift card.

user-interview-slideout-postfity-customer-analysis

Gather insights about your customers from internal teams

Businesses often have different departments, each with a different perspective on their customers’ needs . The insights you can gain about your customers from your internal teams can be extremely beneficial for developing a comprehensive view of them.

While sales teams may have a better understanding of customer needs, marketing teams may understand how customers respond to different content or visual stimuli. Meanwhile, Account Management and Customer Success teams may understand the customer’s day-to-day needs even better.

By leveraging all the available insights from across multiple departments, companies can capture a deeper understanding of their target audience and develop better strategies and provide quality experiences that generate growth.

Leverage product analytics

Lean into product usage data to understand customer behavior.

You can get insights into data such as:

What features do customers use the most and the least
Which paths do users take and how they navigate inside your product
What links or call-to-actions users clicked
What in-app messages have they already been exposed to

How do you collect product usage data ? One way is to use a product analytics tool to tag your UI patterns to see how customers interact with them.

Perform social listening

Keep an eye on public sources – customers often share their honest opinions about your brand on social media and review sites.

Social media: People tend to post on social media (unfiltered) when they have a strong opinion about something, good or bad. Monitor your tagged and untagged mentions on social media channels like Twitter, Facebook, LinkedIn, and Reddit to keep tabs on what people really think.

Review sites: Keep an eye on software review sites, like G2 and Capterra, to see what customer sentiment is like for your brand. Are the reviews overwhelmingly positive or not? What are common complaints? What do people appreciate the most about your product or service?

Social listening gives you a level of honest feedback that you wouldn’t be able to gather otherwise.

Create user and buyer personas

Once you have defined your target audience and identified the types of customers you wish to target, it’s time to start thinking about customer personas . Personas are fictionalized representations of your average customers, gathered and analyzed from all available data points.

Personas should contain enough details to represent the demographic you’re targeting, such as age, gender, occupation, income, location, and interests. Additionally, consider how your customers usually interact with your company and how they prefer to be contacted – e.g., by email or social media.

It is then possible to conduct more research on each persona – such as finding out what makes them tick, and what content they are most likely to engage with – to provide more innovative campaigns that target each segment directly.

Consider creating more than one buyer persona, as different customers will buy your products for different reasons.

Here’s an example of a user persona we created at Userpilot:

UX Designer
B2B SaaS with 11-50 employees
Has found product-market fit
They’re looking to automate onboarding

Team collaboration:

Part of UI/UX team
Collaborates with Product Marketing Manager
Collaborates with UI designers and developers

Jobs to be done:

User research to identify the needs of who they are designing for
Prototyping and user testing to improve UX before launching
Continuously iterate on solutions to make the product easy to use

Pains/challenges:

Tapping into feedback collected by other departments, such as Marketing
Identifying friction points in the user journey due to a lack of product analytics insights
Hard to document and analyze qualitative data from surveys

Gains of using a Product Growth Platform:

Build microsurveys to identify users’ needs and share the same data with multiple departments, using one platform only
Goal tracking at each stage of the journey to help identify drop-off points in the journey
Tag NPS surveys responses to easily identify patterns of what’s blocking the users from achieving their goals

A solid buyer persona profile can help the entire team better connect with customers and build a better product.

Build a customer journey map

Essentially, a journey map shows all the touchpoints and interactions that a customer must go through to reach their goal.

Considering that customers behave differently at each stage of the buyer’s journey, a customer journey map can help connect the dots and uncover the factors that determine whether their experience is positive.

Every persona should have its own customer journey map. The map will help you identify how to attract, engage, convert, and upsell specific personas and segments based on their challenges, questions, preferred platforms, and types of content.

Best tools for customer analysis

Here are the top two customer analysis tools to help you easily gather data and act on it:

Userpilot is a product growth platform that helps you improve product engagement and retain more customers.

They have multiple high-value features like event tracking, feature tagging, in-app flow builders, and more. As for customer analysis, with Userpilot you can run in-app surveys, track product behavior, tag UI elements, and create user segments based on customer data.

Then, you can put your insights into action by creating in-app product experiences that help boost your growth metrics.

Create contextual customer experiences using UI patterns, such as modals, tooltips, and banners.

userpilot-chrome-extension-builder-customer-analysis

Semrush is an all-in-one SEO, content marketing, competitor research, and social media marketing platform.

It’s an excellent tool for customer analysis since it shows you what channels your website visitors come from. Semrush is also as a template for categorizing your data to create user personas .

Also, Semrush Brand Monitoring can help you keep track of all mentions of your brand and product or service in real-time.

Customer analysis helps you increase profits, get more for your marketing efforts, and connect with your target customers.

Want to get started with customer analysis? Get a Userpilot Demo and see how you can do customer segmentation analysis and build in-app product experiences, code-free.

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How To Develop the Customer Analysis Section of Your Business Plan

What is the Customer Analysis in a Business Plan?

A customer analysis thoroughly examines who your customer is, why a customer chooses your products or services, and why a customer will return to buy your products or services again and again. A completed customer analysis will also serve as important information for lenders or investors who examine your business plan. It tells them that you thoroughly know who will buy your products or services and why.

Customer Analysis Methods

Choosing the right customer analysis method, or a combination of methods, is a crucial step in developing a comprehensive understanding of your target market. These methods offer insights into customer behavior, preferences, and buying patterns, enabling businesses to tailor their products, services, and marketing strategies effectively. Whether you opt for a single approach or integrate multiple techniques, the goal is to gather actionable data that supports informed decision-making and strategic planning for your business’s growth.

Surveys and Questionnaires

One of the most direct methods of customer analysis is through surveys and questionnaires. This approach allows businesses to gather qualitative and quantitative data directly from potential or existing customers about their preferences, buying habits, and direct customer feedback on products or services. Carefully designed questions can provide valuable insights into customer demographics, psychographics, and behavior. Digital tools and platforms can facilitate the distribution of surveys to a wide audience, allowing for a broad sample size that can lead to more accurate and actionable data.

Social Media Analysis

Social media platforms are a goldmine of customer data and sentiments. Analyzing social media interactions can provide real-time insights into how customers perceive your brand, what they expect, and their level of engagement with your products or services. Tools like sentiment analysis and social listening can help identify trends, monitor brand mentions, and understand the overall customer sentiment. This method is particularly useful for capturing the voice of the customer and adjusting marketing efforts accordingly.

Focus Groups

Focus groups offer a more in-depth method of customer analysis, allowing for detailed discussions and feedback on specific topics, products, or services. By bringing together a diverse group of customers, businesses can explore customers’ attitudes, perceptions, and reactions in a controlled environment. Although more resource-intensive than surveys, focus groups can provide nuanced insights into customer needs and preferences, often uncovering issues or opportunities not visible through other forms of analysis. The key to a successful focus group is careful selection of participants and structured facilitation to ensure open and honest feedback.

How To Write the Customer Analysis For Your Business

Below, we outline steps that will guide you through creating a customer analysis section that not only aligns with your business goals but also resonates with investors and stakeholders.

Develop Your Customer Persona

Understand their buying behaviors, conduct market research to identify current trends, research what the competition is doing, customer analysis examples.

To illustrate the depth and application of a thorough customer analysis, consider the following two examples. These samples will provide you with a framework to craft a customer analysis that resonates with both investors and your target audience.

Example #1 – Little Dreamers Boutique

Little Dreamers Boutique primarily targets parents, guardians, and gift-givers seeking high-quality, fashionable clothing and toys for children aged newborn to pre-teen. The boutique’s ideal customers are individuals who value unique, stylish, and sometimes eco-friendly options for children’s attire and playthings. Situated in the vibrant downtown area of Greenville, the boutique also attracts foot traffic from locals and visitors exploring the picturesque row of shops and cafes. The demographic is largely middle to upper-middle-class consumers who are willing to invest in premium products for the children in their lives. Secondary customers include grandparents and extended family members looking for special occasion gifts.

Customers of Little Dreamers Boutique are motivated by the desire to purchase unique, high-quality items that are not found in typical retail chains. They appreciate the curatorial eye behind the selection of local and international brands offered at the boutique. Purchasing behaviors are influenced by the appeal of giving children and recipients stylish, comfortable, and sometimes eco-conscious clothing and toys. Seasonal trends, special occasions, and the continuous need for children’s clothing due to growth spurts also drive buying behavior. The boutique’s atmosphere, customer service, and product quality encourage repeat business and word-of-mouth referrals.

The children’s clothing and toy market is increasingly moving towards sustainability and unique, boutique-style offerings. Parents and gift-givers today show a preference for organic materials, ethical production, and products that support local economies. Little Dreamers Boutique is well-positioned to capitalize on these trends, with its focus on eco-friendly toys and sustainable fashion. Additionally, the rise of ‘shop local’ movements provides a favorable environment for the boutique’s growth. Staying adaptive to digital trends, like social media marketing and online shopping, is crucial for reaching a wider audience and catering to changing shopping behaviors.

Competition for Little Dreamers Boutique comes from both local shops and larger retail chains. While larger retailers might offer lower prices due to mass production, they lack the unique selection, personal touch, and community feel of Little Dreamers. The boutique sets itself apart by curating a diverse range of styles and brands that cater to the specific tastes and values of its customer base. Online competitors present a challenge in convenience and variety but cannot match the tactile, personal shopping experience offered by Little Dreamers Boutique. The boutique’s dedication to customer experience and unique product offerings creates a competitive advantage that keeps customers returning.

Example #2 – HandyFix Solutions

HandyFix Solutions targets a wide array of customers within the Austin metro area and its surrounding neighborhoods. We focus on homeowners and small business owners in need of dependable, high-quality handyman and maintenance services. The primary customer base includes:

Busy Professionals : Individuals with demanding work schedules who lack the time to perform household repairs or maintenance tasks. They value quick, efficient service that fits into their busy lifestyles.
Families : Homes with children often require frequent maintenance and updates. Families seek reliable services that can handle a diverse range of tasks, from simple repairs to major renovations, ensuring a safe and comfortable living space.
Elderly Homeowners : Older residents may struggle with the physical demands of home upkeep and prefer to trust a professional for their home maintenance needs. They seek reliable, respectful and patient service providers.

Customers of HandyFix Solutions are primarily motivated by the need for convenience, quality, and trustworthiness. They prefer a one-stop solution for their home maintenance needs that offers both minor repairs and more extensive renovation services. The company’s commitment to quality workmanship, flexible scheduling, and excellent customer service aligns with the desires of its target customers.

The growing trend towards DIY home improvement has influenced the handyman service market, with more homeowners willing to undertake small projects themselves. However, for larger, more complex tasks, or for those without the time or skills, HandyFix Solutions provides a valued service. Furthermore, the increasing number of aging homeowners contributes to the demand for home maintenance and modification services, presenting opportunities for HandyFix to cater to this demographic.

Competitively, HandyFix Solutions distinguishes itself from larger, generalized contractors and franchise handyman services with its local expertise, personalized customer service, and a broad service offering that caters to specific community needs. The company faces competition from other local handymen and national chains; nevertheless, its dedication to customer satisfaction and quality workmanship positions HandyFix as a preferred provider in the Austin area.

HandyFix Solutions has strategically positioned itself to meet the diverse needs of homeowners and small businesses in the Austin metro area. By focusing on high-quality service, reliability, and a broad range of offerings, HandyFix aims to cultivate long-term customer relationships and build a strong, loyal base within its target market.

A clear summary of your comprehensive findings in the customer analysis will go a long way toward demonstrating the value of your business. Moving through the checklists, adding research, listening to focus groups, and interpreting industry data will combine to form a customer analysis that holds a central position in the business plan. Whether used in the introduction of a new business or as an entrepreneur, the customer analysis indicates you know your customer very well.

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Crafting the Customer Analysis in Business Plan: A Comprehensive Guide

In today’s competitive business environment, understanding your customers is the key to success. Customer analysis in business plans plays a crucial role in driving business growth and providing a competitive edge.

Imagine unlocking the hidden potential within your customer base, tailoring marketing strategies, and developing products that resonate with their needs and preferences. This comprehensive guide will explore the ins and outs of customer analysis in a business plan and how to leverage it for maximum impact on your business.

Short Summary

Customer analysis is an essential part of any business plan, allowing businesses to understand their target customers and create tailored products/services.
It involves identifying a market, assessing demographics & analyzing customer behavior in order to inform marketing strategies.
Utilizing insights from customer analysis can help optimize marketing campaigns & product offerings for maximum return on investment.

The Essence of Customer Analysis

Customer analysis is an essential element of any business plan, emphasizing the comprehension of target customers, their requirements, and how your product or service fulfills those requirements. By performing customer analysis, businesses can better tailor their products and services to their target audience , ultimately leading to increased sales and a thriving business.

Understanding the needs of your target customers is key to success. Knowing who your customers are

Purpose of Customer Analysis

The primary objective of customer analysis is to recognize potential customers, prioritize customer segments, and provide guidance for marketing and product development strategies. Understanding your customers’ wants, needs, pain points, and objectives is crucial to creating targeted marketing campaigns and product offerings that resonate with them.

By closely monitoring customer feedback and support requests (Voice of Customer analysis), businesses can gain insight into customer pain points and preferences and even discover unexpected uses for their products.

Key Components of Customer Analysis

The essential elements of customer analysis encompass target market identification, demographic analysis, and behavioral analysis. Demographic analysis provides insights into factors such as age, income, and location, which can be used to create targeted marketing strategies.

Behavioral analysis, on the other hand, entails comprehending the customer’s decision-making process for the purchase, including the steps taken, information sources consulted, and who has the authority to make the final decision. By understanding these components, businesses can better cater to their customer’s needs and preferences, ultimately leading to success.

Conducting an Effective Customer Analysis

An effective customer analysis involves a thorough research process that focuses on customer pain points, goals, and insights on what influences their buying decisions. This process begins with identifying your target market, which is crucial in ensuring a successful business.

By analyzing customer demographics and examining customer behavior and purchasing patterns, businesses can tailor their marketing strategies and product offerings to address the specific needs and preferences of their target customers.

Identifying Your Target Market

Identifying your target market is the first step in conducting a comprehensive customer analysis. By precisely defining the target customer your company is serving, you can focus your marketing efforts and resources on the most profitable customer segments.

Small businesses with 10 to 50 employees located in large metropolitan cities on the West Coast can benefit from having a business plan. This plan should provide clear guidance and instructions for the successful execution of tasks, including target market analysis.

With a clear understanding of your target market, you’ll be better equipped to develop a targeted marketing strategy that resonates with your audience and drives sales.

Analyzing Customer Demographics

Analyzing customer demographics is crucial for tailoring marketing strategies to specific customer groups. By examining your current customer base, you can determine which demographics to focus on for future marketing efforts. Demographic information, such as:

education levels

A comprehensive view of the messaging that is most likely to appeal to customers and the marketing channels that are most effective in reaching them can be achieved when customers seek multiple bids, as it provides valuable insights into their preferences and decision-making process.

By constructing a marketing strategy around the types of people who have already made a purchase, you can maximize the return on investment of your marketing budget.

Examining Customer Behavior and Purchasing Patterns

Analyzing customer behavior and purchasing patterns can yield valuable insights through customer behavior analysis. By monitoring customer interactions with your products and services, such as website visits, purchases, and customer reviews, you can identify customer needs and preferences and devise strategies to enhance customer retention and loyalty.

Additionally, understanding the drivers of customer decision-making is crucial for creating targeted marketing campaigns and product offerings that resonate with your target audience.

Utilizing Customer Analysis Results

Customer analysis results can be leveraged to enhance marketing strategies, drive product development and innovation, and strengthen customer retention and loyalty. By recognizing customer feedback and customer support requests, businesses can acquire advantageous insights into customer behavior and preferences, which can be utilized to provide direction to marketing and product development strategies.

In this section, we will explore how customer analysis results can be utilized to improve various aspects of your business.

Enhancing Marketing Strategies

Customer analysis results, including customer segmentation analysis, can inform targeted marketing strategies that lead to increased sales and revenue. By leveraging insights from customer demographics and behavior, businesses can create personalized marketing campaigns that resonate with their target audience. For example, a company catering to young professionals may focus its marketing efforts on social media platforms, while a company targeting older adults may prioritize direct mail or email campaigns.

By tailoring marketing strategies based on customer analysis, businesses can optimize their marketing efforts and achieve greater success.

Driving Product Development and Innovation

Insights from customer analysis can guide product development and innovation, ensuring that products and services meet customer needs and preferences. By understanding customer pain points and objectives, businesses can create new products and services that address these needs, resulting in increased customer satisfaction and loyalty.

Additionally, existing customer feedback can be utilized to refine existing products and services, making them more appealing to the target audience and driving business growth .

Strengthening Customer Retention and Loyalty

Understanding customer needs and preferences through customer analysis can help businesses improve customer retention and loyalty. By tailoring products and services to the specific needs and preferences of your target audience, you can enhance customer satisfaction and encourage repeat business.

Furthermore, by identifying gaps in the customer experience and optimizing touchpoints, businesses can improve the overall customer journey and nurture long-lasting relationships with their customers.

Tools and Techniques for Customer Analysis

To effectively conduct customer analysis, businesses can employ various tools and techniques, including data collection and analysis, creating buyer personas, and customer journey mapping. These methods enable businesses to gain a deeper understanding of their customers and make informed decisions regarding their products, services, and promotional activities.

In this section, we will explore the different tools and techniques that can be used in customer analysis.

Data Collection and Analysis

Data collection and analysis play a critical role in customer analysis, as they involve gathering information on customer interactions, demographics, and purchasing patterns. Businesses can utilize various methods for data collection, such as surveys, focus groups, and interviews, as well as analytics tools to track customer behavior online.

By analyzing this data through market research, businesses can identify trends, patterns, and areas for improvement, ultimately informing their marketing strategies and product development efforts.

Creating Buyer Personas

Creating buyer personas is an essential technique in customer analysis, as it helps businesses visualize their ideal customers and tailor marketing and product development strategies accordingly.

Buyer personas are fictional representations of major customer segments, taking into account factors such as:

demographics
professional status
purchasing habits

By developing accurate and detailed buyer personas, businesses can ensure that their marketing campaigns and product offerings resonate with their target audience, leading to increased sales and customer loyalty.

Customer Journey Mapping

Customer journey mapping is an invaluable tool in customer analysis, as it enables businesses to identify gaps in the customer experience and optimize touchpoints to improve customer satisfaction and loyalty. A customer journey map is a visual representation of the stages a customer goes through when interacting with a business, from initial awareness to loyalty.

By understanding the customer journey and identifying areas for improvement, businesses can enhance the overall customer experience and nurture long-lasting relationships with their customers.

Case Study: Successful Customer Analysis in Action

A prime example of successful customer analysis in action is the Buxton case study. Buxton, a leading provider of customer analytics and consulting services, utilized customer analysis techniques to help businesses expand, grow, and market themselves more efficiently. Through a combination of data collection, buyer persona creation, and customer journey mapping, Buxton was able to gain a deep understanding of their client’s customers and develop targeted marketing campaigns that resonated with their audience.

As a result, their current customers experienced increased sales, customer loyalty, and overall business growth and success.

In conclusion, customer analysis is a powerful tool that can drive business growth and success by helping companies understand their target customers, tailor their marketing strategies, and develop products and services that meet customer needs and preferences.

By utilizing tools and techniques such as data collection and analysis, buyer persona creation, and customer journey mapping, businesses can gain valuable insights into their customers and make informed decisions that lead to increased sales, customer loyalty, and overall business success. Don’t miss out on the opportunity to unlock your business’s full potential – start conducting customer analysis today and reap the rewards.

Frequently Asked Questions

What is a customer analysis in a business plan.

A customer analysis is an essential part of a business plan, which identifies target customers and outlines how a product or service meets their needs.

It helps businesses understand their customers better, so they can create marketing strategies that are tailored to their target audience. It also helps them identify potential opportunities and threats in the market.

By understanding their customers, businesses can better serve their customers.

What is an example of customer analysis?

Customer analysis involves understanding consumers’ behaviors through observation and measurement of analytics, analyzing brand recognition and awareness, understanding how customers feel about the competition, and testing different customer acquisition approaches.

This process helps businesses better understand their target audience and develop strategies to reach them. It also helps to identify potential opportunities for growth and improvement. By understanding customer behavior, businesses can create more effective marketing campaigns and better serve their customers.

What should be included in a customer analysis?

A customer analysis should include details on the customer’s demographics, professional status, purchasing habits, values and goals, influences, and challenges. It should also assess their buying patterns, product usage history, spending habits, loyalty metrics, and more to gain an understanding of their wants, needs, pain points, and objectives.

What is the primary objective of customer analysis?

The primary objective of customer analysis is to recognize potential customers, prioritize customer segments, and inform marketing and product development strategies.

By understanding customer needs and preferences, businesses can create targeted marketing campaigns and product offerings that are tailored to the needs of their target audience. This helps to ensure that the company is reaching the right people.

How can customer analysis help improve marketing strategies?

Customer analysis provides valuable insights into customer’s needs and preferences, enabling businesses to create tailored marketing strategies that drive sales. It is an essential tool for effective marketing.

Complete Guide on How to Conduct an Effective Customer and Segmentation Analysis

Follow this detailed guide to conducting customer analysis and segmentation and learn how to target your customers with the right messages.

The purpose of undertaking customer analysis as part of a business plan is to examine in-depth the consumers most likely to purchase your product or service. Brands can establish different groups of customers and the needs of those customers. By understanding what motivates them to purchase, brands can build their business around providing solutions to those needs.

So, how can we define customer analysis?

What is customer analysis, and why is it important?

Customer analysis is the process of examining, understanding, and developing in-depth knowledge about the consumers most likely to convert into customers by purchasing your product or service.

Customer analysis is a critical component of market research and business strategy. The customer analysis process involves systematically collecting and examining data and insights about a company's existing and potential customers.

This type of analysis aims to discover consumer purchase drivers and how an organization can effectively fill the gap with its product offerings.

The goal is to identify and segment different groups of customers based on their unique traits, motivations, and needs. Organizations can explore demographics, psychographics, interests, behaviors, and other characteristics that make up a customer profile or buyer persona.

What is a customer profile or buyer persona?

A customer profile (or buyer persona) is a dossier containing a detailed record of the ideal consumer interested in purchasing your product or service. Organizations use buyer personas to tailor their marketing strategies, product development, and sales efforts to better align with customer preferences and expectations.

How can brands benefit from doing customer analysis?

Insights from customer analysis can help companies enhance customer satisfaction, target the right audience with tailored messages, uncover market trends, and make informed decisions, ultimately driving business growth and success in a competitive marketplace.

Customer analysis empowers businesses to bridge the gap between what they offer and what their customers genuinely need, ensuring that products and services provide practical solutions to consumer pain points.

Stages of customer analysis

Customer analysis should move through three different stages.

You first need to identify who your current customers are. The more detailed understanding you have of your customers, the better. This one group of customers should then be split into subgroups with similar traits and motivations. You can also identify target customers you are not yet reaching.
Customer analysis must then show what the needs of these different customer groups are.
You then need to work out what bridges these two, identifying how the company’s products meet the needs of each customer group. How do you provide solutions to their pain points?

What is a customer analysis model?

Any analysis should start with asking clarifying questions that can help establish the reason for the analysis and create a framework for evaluating the data.

The customer analysis model represents the framework marketers and insights professionals can follow when diving deeper into the customer data to surface consumer preferences and interests.

Researchers often cite the 5W and 6W models, which stand for the Who, What, When, Where, Why, and, lastly, Why not of the data.

This approach to analyzing customer data can help reveal not only who your target audience is and what they might be interested in but also what they dislike and the reasons behind it.

5 Key steps to conducting effective customer and segmentation analysis

To conduct effective customer and segmentation analysis, organizations should follow the following five key steps:

1. Identify and segment your existing customer base:

Identify your current customers and gather as much detailed information as possible.
Segment these customers into distinct groups with similar traits and motivations.
Identify potential target customers you still need to reach

Identify your customers

You can learn more about your customers in a variety of ways, and a mix of research methods will give you the most accurate results. It is best to gather as much information as possible and avoid thinking details are irrelevant. Details like age, gender, location, demographics, and psychographics are all important, but so are their interests, other brands they like, publications they read, and so on.

Talking to them and running a survey will be the best way of hearing about them in their own words, although that does come with biases. Reduce this by complementing that research with sales and CRM data and speaking to customer-facing employees. Once you have identified these groups, social data can elaborate your understanding by providing a more holistic view of the groups.

Your guide to learning about consumers online

Learn how social listening can inform your primary research objectives

It’s also worth considering at this stage whether or not the buyer and end-user are the same person. In a B2B setting, the buyer might hold budget responsibility but not actually use the service or product themselves.

In a B2C setting, there are several situations when a buyer might not be the end user; a toy water pistol or a diamond ring are both unlikely to be used by the purchaser.

Do customer segmentation in groups

You cannot undertake an accurate customer analysis without segmenting your audience into groups whose members are homogenous and distinct from other groups. Your segmentation criteria should be:

Measurable : Your analysis should identify the size of a market segment so that you can decide to what extent efforts should be focused on the segment.
Distinguishable : Observable differences that are clearly defined must exist in order to characterize segments.
Substantial : The market needs to be large enough to justify segmenting, with each segment substantial enough to make it worthwhile.
Financial : There will be additional costs when marketing to multiple, separate groups, so the predicted income must exceed these costs.
Accessible : Your marketing messages should be accessible to each market segment. Different groups will respond better to different forms of advertising.

Develop a customer profile analysis

Use your data, segmentation criteria, and some educated guesswork to develop your buyer personas. It helps to have personas to visualize a human rather than aiming for an abstract idea.

Elements to include in a buyer persona include:

Background and responsibilities , including job title, career path, and consumers’ primary job responsibilities.
Demographics , including gender, age, income, family, and location.
Communication : Which channels do they prefer? What is their demeanor? Do they have an assistant?
Media and influencers : Which publications do they follow, and which individuals are leading the conversation in their world?
Challenges vs proposition : The challenges they face in implementing their primary job goals and how your product or service can help them overcome those issues.
Objections : Common reasons why this persona wouldn’t choose your product.
Common language : What language should you use to appeal to their needs?
Quotes : Adding some qualitative data in the form of quotes can really help to bring the personas to life and remind you there are real people behind these aggregated models.

Discover your customers’ needs

The next step in customer analysis is to get a good idea of what the customer’s needs are. By understanding their needs, several departments can gear their output towards answering these questions rather than taking an “If you build it, they will come” approach.

There are numerous ways to discover what your customers’ pain points are.

The best way is to ask them. A survey is great if you can get enough responses, and online services like SurveyMonkey can keep the cost down.
Consider the past actions of the group, such as the percentage that have purchased a similar product at some time in the past.
Look at questions asked on Quora or Reddit .
For B2B businesses, looking at job adverts for your target customers can give you an insight into their day-to-day work and problems.
Join LinkedIn professional groups to get an insight into questions and discussions.
Social intelligence can again help to understand the issues faced by customers. You can begin by building an audience of your personas and then monitor that group for questions asked, relevant content shared (such as how-to guides), and discussions.

How does your brand meet the needs of the customer?

Once you’ve done your research and outlined your different customer groups and their needs, you should connect the dots to your brand and identify how you meet those needs. This section of customer analysis should just be a matter of discussing and brainstorming with internal partners.

Solution-based answers should come out of this process. Instead of merely listing features, concentrate on showcasing how these features address the challenges your customers and prospects have. Always focus on benefits ahead of features.

Solving the problems that customers face on a daily basis will resonate with them much better than shouting about a shiny new feature. Focus on how you can make their lives easier and more enjoyable.

This will obviously be reflected in marketing, but these insights can help sales and product development as well, tightening your focus to better match your customer’s needs.

Ready to make your customer and segmentation analysis?

Systematically conducting a customer and segmentation analysis is not merely a recommended practice but essential for any business aiming to thrive in today's competitive landscape.

By understanding the core principles of customer analysis and following the five key steps to conducting an effective analysis outlined in this blog, you can unlock your brand’s true potential and foster lasting success.

The journey of customer analysis starts from analyzing your existing customers, mirroring buyer personas after them, and ultimately connecting the dots between your brand and the solutions you provide to address your potential customers’ pain points.

The insights from conducting a customer analysis are not just data; they are the compass that guides your marketing, sales, and product development efforts to better align with your customers’ needs.

Now it's your turn: How are you going to harness the power of customer analysis to drive business success in 2024?

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Resource Library

Introduction to customer analysis.

A customer analysis (or customer profile) is a critical section of a company’s business plan or marketing plan. It identifies target customers, ascertains the needs of these customers, and then specifies how the product satisfies these needs.

Customer analysis can be broken down into a behavioral profile (why your product matches a customer’s lifestyle) and a demographic profile (describing a customer’s demographic attributes).

A customer profile is a simple tool that can help business better understand current and potential customers, so they can increase sales and grow their business. Customer profiles are a collection of information about customers that help determine why people buy or don’t buy a product. Customer profiles can also help develop targeted marketing plans and help ensure that products meet the needs of their intended audience.

Behavioral Analysis (Customer Buying Criteria)

A behavioral analysis of customers (or psychographic profile) seeks to identify and weigh the relative importance of factors consumers use to choose one product over another. These factors, sometimes called buying criteria, are key to understanding the reasons that customers choose to buy your product (or service) versus the products offered by your competitors. The four major criteria that customers use to distinguish competing products are: price, quality, convenience andprestige.

In consumer transactions, price and quality tend to be the dominant factors. However with business-to-business (B2B) transactions (also called industrial marketing), service issues such as reliability, payment terms, and delivery schedule become much more important. The sales transaction in an industrial marketing scenario also differs from consumer marketing in that the purchase decision is typically made by a group of people instead of one person, and the selling process can be much more complex (including stages such as: request for bid, proposal preparation and contract negotiations).

By identifying customer needs through market research and analysis, companies can develop a clear and concise value proposition which reflects the tangible benefits that customers can expect from the company’s products. And once the primary buying criteria have been identified, marketing efforts can influence the customer’s perception of the product along the four main dimensions (price, quality, convenience and prestige), relative to the competition’s product.

Behavioral Analysis (Purchase Process and Patterns)

Occasionally, customer behavior analysis requires a more in-depth understanding of the actual decision-making process of the customer purchase. This may be especially true in an industrial marketing scenario. Examples of purchase process questions to be answered here include:

* What steps are involved in the decision-making process? * What sources of information are sought? * What is a timeline for a purchase (e.g., impulse vs. extended decision-making)? * Will the customer consult others in their organization/family before making a decision? * Who has the authority to make the final decision? * Will the customer seek multiple bids? * Will the product/service require significant modifications?

Behavior profiles can also focus on actions, such as: which types of items were purchased, how frequently items are purchased, the average transaction value, or which items were purchased in conjunction with other items. To understand the buying habits and patterns of your customers, answer the following questions:

* Reason/occasion for purchase? * Number of times they’ll purchase? * Timetable of purchase, every week, month, quarter, etc.? * Amount of product/service purchased? * How long to make a decision to purchase? * Where does the customer purchase and/or use the product/service?

Customer Demographics

The second major component in customer analysis is identifying target market segments that are predisposed to preferring your products over those of your competitors. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function. A marketing program aimed at individual segments needs to understand and capitalize on the group’s differences and use them strategically in all advertising campaigns.

Gender, age, ethnicity, geography and income are all market-segmenting criteria based on demographics.

Typical questions to ask when determining the demographics of the target market include: * What is the age range of the customer who wants my product or service? * Which gender would be most interested in this product or service? * What is the income level of my potential customers? * What level of education do they have? * What is their marital or family status: Are they married, single, divorced? Do they have kids, grandkids? * What are the hobbies of my target customers?

The target market segments are specified by demographic factors: age, income, education, ethnicity, geography, etc. Then by having a well defined set of demographic factors, marketing will be able to identify the best channels to reach these specific demographic segments.

Customer Analysis Example

Customer Analysis References

Market Analysis {U.S. Small Business Administration (SBA) Website’s content on Marketing Analysis} http://www.sba.gov/content/market-analysis

“Analyzing Customers in Your Business Plan” 2011 {Growthink, Inc.} http://www.growthink.com/businessplan/help-center/analyzing-customers-your-business-plan

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Customer analysis: Definition, benefits & how to perform it the right way

Learn what customer analysis is, what the benefits are to investing in it, and how to perform it the right way.

What is customer analysis?

Types of customer profiles
Benefits of customer analysis
How to do customer analysis

Customer analysis FAQs

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Understanding your customers and potential customers is a key aspect of being able to effectively market to them and build relationships with them. Careful customer analysis will provide you with the tools to convert more customers and keep them from churning for longer periods of time. In this post, we'll take a look at what customer analysis is, its benefits, and how to get started with it.

Customer analysis is a combination of qualitative and quantitative research collected on your customers with the purpose of better understanding them in order to draw meaningful conclusions that will aid you in your marketing and outreach efforts. It allows you to determine the needs of your customers, the types of messaging they respond well to, and why they are or aren't purchasing your product. Armed with this information, you can make the changes necessary to increase growth.

Two types of customer profiles you need to create

There are two different ways of looking at customers. Each of these will provide crucial insights into how to best target your messaging and guide future product decisions.

Customer behavioral profile

Creating a customer behavioral profile consists of two parts. The first part is understanding their buying criteria. Using market research and analytics, you can determine which features are most appreciated by customers, which needs are being underserved, and what price points they're willing to pay. Once you understand your customers' needs and willingness to pay , you can better tailor your product around those needs and price points. If you already have the features they value most, you can put additional effort into highlighting them in your marketing materials.

The second part of the behavioral profile is the purchasing patterns of your customers. What are they buying, and how frequently are they buying it? Which sales channels are they using to make a purchase, and where did they arrive from? What is the average time between first visit and first purchase? How long do they stay around before churning? All of these questions can inform your marketing decisions and allow for fine-grained tuning of your messaging and sales strategy.

Customer demographic profile

Demographic information such as age, location, income and education levels, gender, and more can give you a clearer picture of the type of messaging that will most resonate with customers and the marketing channels that can best reach them. The best way to determine which demographics to target for future marketing efforts is by looking at your existing customers. Building a marketing strategy around the types of people who are already purchasing is a great way to maximize the ROI of your marketing budget.

5 key benefits of performing customer analysis for any business

We've already touched lightly on some of the reasons that you should be doing customer analysis. Now let's take a closer look at some of the key benefits to show you just how important customer analysis can be to the sustained growth of your business.

1. Reduced churn & increased customer retention

One of the biggest reasons customers churn is because the product isn't fulfilling their needs. Customer analysis allows you to better understand what those needs are and tailor your product, your training materials, and your messaging to better address those needs before the customer churns.

2. Smarter product improvements

Knowing customer needs is a good way to decide what new features and improvements you should make to your product . By examining customer behavior to see which features are used and which are not, you'll have a better idea of what category of features customers find most useful, and which areas may need some improvement to increase usage.

3. Personalized and targeted marketing strategy

The most successful marketing departments create buyer personas for their customers. These are fictional characters that represent the various segments of customers that are most likely to purchase your product. The personas give you a more accurate target when determining what the tone of your messaging should be. You can also use analytics to target, in specific ways, customers who exhibit a certain behavior. This two-pronged personalization strategy results in a much more efficient marketing process.

4. Increased sales and revenue

When you're using buyer personas to communicate more effectively to potential customers, and using the other customer analysis you've performed, to more accurately address their pain points in both your messaging and your product development, you'll end up converting a higher number of potential customers into paying customers for increased revenue .

5. Lower CAC

Increased revenue alone isn't always a good thing. If you end up spending more to get that revenue, you're moving downward in profitability. Customer analysis allows you to make every aspect of the customer journey more efficient, meaning you'll be able to close more sales and keep customers around longer without spending more on marketing or other customer acquisition strategies .

How to do customer analysis in 8 steps

If your customer analysis is going to be effective, then it needs to be thorough. It's important that you gather the proper information and then apply it in the most meaningful way. The process can be outlined in eight broad steps:

1. Analyze your current customers

If you have a good analytics system in place, then you've already have a lot of data on how your customers behave. While market research looking outside of your customer base can help, looking at the people who have already purchased accomplishes the dual purpose of giving you specific access to how your product is used and providing you with information on the exact type of people likely to purchase from you.

2. Perform customer profitability analysis to identify the most valuable customers

Your entire customer base can give you plenty of good insights about which features are popular and similar generic metrics. But in order to know which types of customers to reach out to and which improvements are going to make the biggest impact on churn reduction, it pays to look at the type of people who have spent the most and/or stayed with you the longest. Keeping those customers happy and bringing in more like them will give you the most growth.

3. Perform customer needs analysis to discover the main purchase drivers

People make purchases based on needs. When you understand what your customers (and people similar to them) need from a product, you'll also understand what drives them to make a purchase. This data will play a big role in shaping the future development of your product and help you stay a step ahead of the competition.

4. Perform customer segmentation analysis to create customer segments

Customers can be segmented in a variety of ways. You can divide them by common demographic traits, common profitability metrics, common shopping or app-usage behaviors, and more. The data itself and customer segmentation tools will help guide you by grouping your customers into logical segmentation buckets. The data will help you determine your most profitable customers for the step above, but also show you which are in danger of churning, so you can take steps to avoid it.

5. Use customer data to create buyer personas

Armed with the customer segmentation data, the next step is to get to work crafting a fictional version of the major segments. These buyer personas will serve as the fictional embodiment of your customers, so the marketing, sales, and onboarding teams can communicate with them in a way they'll be most responsive to.

6. Acquire customer feedback

Analytics are a big driver of how you understand your customers, but they alone can't tell you everything. The best way to know what customers think is still the old-fashioned way of asking them. Getting routine customer feedback will keep you stay up-to-date on how customers feel about your product versus an ever-changing technological and competitive landscape.

7. Draw a customer journey map

Drawing a map of your current customer journey and comparing it with the feedback they've given and data you collected can help you identify points in the journey that are not currently being adequately addressed.

The technological landscape is constantly changing. What was state-of-the-art and adored by customers one day can be old news the next. It's important to keep that in mind and ensure that customer analysis is an ongoing effort on your part, and not something you do once and forget about.

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What should a customer analysis include?

When conducting a customer analysis, you should gather data about how customers are interacting with your product, what their pain points and needs are, what demographic and purchasing groups they belong to, and feedback directly from them about their feelings on your product.

How does customer data analysis help in the decision-making process?

Customer data analysis helps you to better understand what your customer's needs are and what features they interact with the most, to help guide you make accurate decisions for future product development. It also paints an accurate picture of who your customer is, allowing you to make more-informed decisions regarding ad-targeting and the tone of your ad copy and website text.

What are the types of customer analysis?

The two major types of customer analysis are behavioral analysis and demographic analysis. Behavioral analysis can be further divided into two subgroups: buying criteria and purchasing patterns.

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How To Write A Customer Analysis Marketing Plan

A customer analysis is a critical section of a company’s business plan or marketing plan. It identifies target customers, ascertains the needs of these customers, and then specifies how the product satisfies these needs. In this article, we guide you about customer analysis.

What is Customer Analysis, and Why is It Important?

Customer evaluation is an essential aspect of market studies and strategic making plans for companies. It includes the systematic examination and understanding of customers and their behaviors, options, wishes, and characteristics. This analysis is carried out to gain insights into who your customers are, what motivates them, and how they interact along with your products or services.

The primary objectives of customer analysis are:

Understanding Customer Segments

Customer analysis helps in categorizing your consumer base into distinct segments based on demographics, psychographics, behaviors, and other applicable elements. By doing so, you could create extra targeted advertising and marketing strategies for each phase.

Identifying Customer Needs

It helps you identify the specific needs, desires, and pain points of your customers. Knowing what problems they face allows you to tailor your products or services to better meet those needs.

Enhancing Customer Engagement

By knowing how clients interact along with your brand and what channels they choose (e.G., on line, in-keep, social media), you may optimize your verbal exchange strategies and enhance patron engagement.

Personalization

Customer evaluation enables you to customize advertising and marketing messages, product tips, and user stories, making your offerings more attractive and applicable to every client segment.

Improving Product Development

Insights from customer analysis can guide product or service enhancements, new feature development, or the creation of entirely new products that align with customer preferences.

Optimizing Marketing Strategies

It allows you to allocate your marketing resources effectively. You can identify the most profitable customer segments and allocate more budget and effort to targeting and retaining them.

Increasing Customer Retention

Customer analysis helps you identify opportunities to improve customer satisfaction and loyalty. By addressing pain points and delivering value, you can reduce churn and retain more customers over the long term.

Measuring and Evaluating Performance

Through customer analysis, you can establish key performance indicators (KPIs) and metrics that help you measure the success of your marketing campaigns and overall business performance.

Competitive Advantage

Understanding your customers better than your competitors can give you a competitive advantage. You can tailor your offerings and marketing strategies to better meet the unique needs of your target audience.

What are Components of Customer Analysis?

Customer analysis involves examining various components to gain a comprehensive understanding of your customers. These components include:

Demographic Information

Demographics include age, gender, income, education, occupation, marital status, and other quantifiable characteristics. This data helps segment your customers into different groups.

Psychographic Information

Psychographics delve into the psychological and lifestyle aspects of your customers. This includes values, interests, hobbies, attitudes, and behavior. Understanding psychographics can reveal motivations and preferences.

Behavioral Data

Behavioral analysis examines how customers interact with your products or services. It covers usage patterns, purchase frequency, product preferences, brand loyalty, and other behaviors that can inform your marketing strategies.

Geographic Data

Geographic information includes where your customers are located, such as their country, region, city, or even specific neighborhoods. It’s essential for location-based marketing and understanding regional variations in preferences.

Technographic Data

For digital businesses, technographic data looks at the technology and devices your customers use, including operating systems, browsers, and mobile devices. This helps tailor your online experiences.

Customer Journey Mapping

Understanding the customer journey involves tracking the steps customers take from initial awareness to purchase and beyond. This analysis identifies touchpoints, pain points, and opportunities for engagement.

Purchase History

Examining historical purchase data can reveal trends in customer behavior, including seasonal fluctuations, product affinity, and customer lifetime value.

Customer Feedback and Surveys

Feedback and surveys allow you to collect direct input from customers regarding their experiences, satisfaction levels, and suggestions for improvement.

Customer Segmentation

After gathering data, segment your customer base into distinct groups based on shared characteristics or behaviors. This segmentation is crucial for tailoring marketing efforts.

Competitive Analysis

Evaluate how your customers interact with competitors’ products or services. This can uncover unmet needs or areas where you can outperform competitors.

Customer Personas

Develop detailed customer personas, which are fictional representations of your ideal customers. Personas typically include names, backgrounds, demographics, psychographics, and pain points.

Customer Lifetime Value (CLV)

Calculate the CLV for different customer segments to understand their long-term value to your business. This helps in setting acquisition and retention strategies.

Customer Satisfaction and Loyalty

Measure customer satisfaction and loyalty through metrics like Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT). Monitor changes over time to identify trends.

Churn and Retention Analysis

Analyze customer churn rates to understand why customers leave. Implement strategies to reduce churn and improve customer retention.

Market Trends

Stay updated on industry and market trends that could impact your customers’ behavior or preferences. Adapt your strategies accordingly.

Customer Analysis Marketing Plans

Here are the best customer analysis marketing plans:

1- Market Segmentation

Start by segmenting your market into distinct groups based on demographics, psychographics, behavior, and other relevant factors. Consider factors such as age, gender, income, location, interests, values, and buying habits.

2- Customer Personas

Create detailed customer personas for each segment. Personas are fictional representations of your ideal customers and include information like name, age, job, hobbies, pain points, and goals. Use market research and data to inform these personas.

3- Customer Needs and Pain Points

Identify the specific needs, desires, and pain points of each customer segment. What problems do they face, and how can your product or service solve these problems? Understanding their pain points will help you tailor your marketing messages.

4- Customer Buying Behavior

Analyze the buying behavior of your target customers. Consider factors like their purchasing frequency, decision-making process, preferred channels for research and shopping, and factors influencing their purchase decisions.

5- Market Trends

Research and include any current market trends or industry shifts that may impact your target customers’ behavior or preferences. Staying updated on trends can help you adapt your marketing strategies accordingly.

6- Competitive Analysis

Analyze your competitors and their customer base. What customer segments are they targeting, and how successful are they in doing so? Identify gaps in their strategies that you can capitalize on.

7- SWOT Analysis

Conduct a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to understand your position in the market concerning your customers. This can help you identify areas where you can improve your offerings.

8- Customer Acquisition and Retention Strategies

Outline strategies for acquiring new customers within each segment and strategies for retaining existing ones. Different customer groups may require different approaches.

9- Customer Lifetime Value (CLV)

Calculate the CLV for each customer segment. This metric helps you understand the long-term value of a customer and can guide your marketing budget allocation.

10- Communication Channels

Determine the most effective communication channels to reach each customer segment. This could include social media, email marketing, content marketing, traditional advertising, or a combination of these.

11- Messaging and Positioning

Craft tailored marketing messages and positioning statements for each customer segment. Address their specific needs, pain points, and preferences in your messaging.

12- Metrics and KPIs

Define key performance indicators (KPIs) for each customer segment to measure the success of your marketing efforts. These could include conversion rates, customer acquisition cost (CAC), customer retention rate, and more.

13- Budget Allocation

Allocate your marketing budget based on the potential ROI for each customer segment. High-value segments may justify higher marketing expenditures.

14- Testing and Optimization

Continuously test and optimize your marketing strategies based on the data and feedback you gather. Customer analysis should be an ongoing process.

15- Risk Assessment

Identify potential risks that could affect your customer segments, such as economic changes, regulatory issues, or competitive threats. Develop contingency plans to mitigate these risks.

16- Legal and Ethical Considerations

Ensure that your marketing strategies comply with all relevant laws and ethical guidelines, especially regarding data privacy and customer consent.

What is a customer analysis marketing plan?

A customer analysis marketing plan is a strategic document that outlines how a business understands, targets, and engages its customers. It includes in-depth analysis of customer demographics, behaviors, needs, and preferences to inform marketing strategies.

Why is customer analysis important in a marketing plan?

Customer analysis is crucial because it helps businesses tailor their marketing efforts effectively. It provides insights into target audience characteristics, enabling businesses to create more relevant and compelling marketing campaigns, ultimately increasing the chances of success.

What are the key components of a customer analysis marketing plan?

Key components include market segmentation, customer personas, needs and pain points, buying behavior analysis, competitive analysis, SWOT analysis, customer acquisition and retention strategies, metrics and KPIs, budget allocation, and risk assessment.

How do I gather data for customer analysis?

You can gather data through surveys, interviews, market research, website analytics, social media insights, customer feedback, and by analyzing historical sales and customer interactions.

How do I create customer personas?

Customer personas are created by collecting and synthesizing data about your target audience. Include demographic details, interests, challenges, and goals. Give each persona a name and a backstory to make them relatable.

What is the significance of market trends in customer analysis?

Monitoring market trends helps you stay ahead of changes in customer behavior, technology, or industry dynamics. It allows you to adapt your marketing strategies to remain relevant and competitive.

How often should I update my customer analysis marketing plan?

Your customer analysis should be a living document that’s updated regularly, especially when significant market changes occur, or new data becomes available. Aim to revisit and revise it at least annually.

What metrics should I use to measure the success of my marketing plan?

Metrics and KPIs vary based on your specific goals, but common ones include conversion rates, customer acquisition cost (CAC), customer retention rate, customer lifetime value (CLV), and return on investment (ROI).

How can I use customer analysis to improve customer retention?

By understanding customer needs and behaviors, you can personalize communications, offer loyalty programs, address pain points, and provide exceptional customer service—all of which contribute to higher retention rates.

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Customer Analysis

What is a customer analysis.

In many ways, customer analysis is the most important piece of your business plan. In order for your business to be successful, you must be able to demonstrate who will buy your products or services. Be sure to identify your customer segments and how your business will meet their specific needs.

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Step-By-Step Checklist
Find Demographic Data
Library Business Research Resources
Public Opinion Polls

Step-By-Step Checklist

Begin with a concise overview of your industry. You can reiterate this from your Industry Analysis.

Define your prospects on a measurable level. Describe the demographics of your customers including their age, sex, race, occupation, household income, rent vs. own, postal code, population, spending habits and number in household, where they are located, etc. Be sure to cite all of your sources.

Describe changes over time and projected changes in the future.

Describe your customers' behavior. Consider how they make decisions and who in the household makes which decisions. Determine whether they respond to price, loyalty, quality, technology, reliability or trends. Divide your market into segments, assign value to each segment, and decide how to best approach each segment. Be sure to cite all of your sources.

Use your Competitive Analysis to provide an overview of your competition.

Use this information about your industry, customer prospects and competitors to identify gaps in the market.

Identify partners through the same research methods used for your industry analysis.

Find Demographic Data:

Census Profile - Statistics Canada Provides Canadian community profiles from the latest Census of Canada. These profiles are very useful for comparing statistics on different municipalities or regional districts. Includes details on family characteristics, primary language, mobility, educational attainment, marital status, labour force activity, earnings, and mode of transportation to work.

Find latest data from the 2016 Census

Thanks to Catie Sahadath at the University of Ottawa Libraries for building this widget.

Market Research Handbook - Statistics Canada A comprehensive source of socio-economic statistics. Data includes profiles of key industries, including the small business sector, as well as of consumers in all the provinces and in 45 major cities across Canada. Also includes information on international trade data, households, families, and selected economic indicators. The Market Research Handbook was published annually until 2008 but is now discontinued. A copy of the 2008 version in PDF format is available on their website.

Socio-Economic Profiles - BC Stats The socio-economic profiles consist of charts and tables for the various regional districts, health areas, college regions and school districts. Each region contains a map, demographic profile, economic hardship, labour market structure, education concerns, crime, health problems, children at risk, and youth at risk. The profiles are presented in a format that allows comparison to other regions in the province and to BC overall.

GeoSearch | Statistics Canada Use this tool for map views of census demographic and thematic data.

Search or browse all NAICS or SIC codes on the NAICS Association website . Some NAICS codes are different in Canada — you can search by keyword or browse Canadian NAICS codes at Statistics Canada or Canadian Industry Statistics. To search for a SIC code using a NAICS code and vice versa, use the NAICS & SIC Crosswalks.

For more information about planning your industry research, including identifying your industry codes, check out the video tutorial for Module 3: Planning Your Industry Research .

Library Business Research Resources:

Business resources at academic libraries .

Colleges and Universities with business programs will have useful business collections you may be able to get access to through their academic library. Often these academic libraries can provide the general public with access to their collections, which include electronic resources like databases and e-books. For example, they could have alumni or community cards, and can provide temporary "guest" passes in certain situations. Contact your local college or university library to see what they can provide. Please note: you probably will not get access to their electronic resources with remote access.

UBC Library Business Databases

How to access: If you are a UBC student, staff, faculty or in-person library visitor you may have access to business databases through the David Lam Management Research Library and Canaccord Learning Commons through the links below.

Full Listing By Title or Full Listing By Subject

There are two different ways to identify databases: Use "by title" if you already know the name; otherwise you can search the list "by subject" to find starting places for undertaking market research, finding articles or researching companies. To learn more about how you can access library resources if you are a community user or temporary visitor, check out the UBC Library Community Users & Visitors Guide . Community users and temporary visitors may have additional access restrictions to specific databases because of license agreements.

Discovering where you can access the information you need to complete your research can be tricky. Below, we have a few examples of potential sources that collect the type of information you will need.

Canadian Advertising Rates and Data
Vividata (formerly "Print Measurement Bureau")
Roper Center for Public Opinion

Public Opinion Polls:

Gallup Search this website for news releases and additional resources from Gallup.

Ipsos Links to Canadian, U.S. and international polls. Includes polls on consumer goods.

Note: If possible, it is an excellent idea to conduct some primary market research on your customers. You can conduct focus groups, customer satisfaction measurements, field testing, etc.

Now you're ready to start writing your business plan !

Customer Analysis

Ai generator.

Every business should take care of its customers to promote trust, retention, and continuous relationship. However, this will not be effectively done if the business is not aware of who their customers are in the first place. Customer satisfaction is one of the most important things for any business to flourish. To keep this on track, you need to conduct a customer analysis now and then, so that you know what you can do to make your name and fame in the market better. This also helps you in retaining your customer base and expanding it if and when needed.

Simple Customer Analysis Template

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Understand how your business generates revenue from your different customers and the different factors involved that affect your performance in meeting the needs of such customers through the use of this customer analysis t emplate. Identify which factors influence your customers in terms of how they respond and in their decision to buy or avail of any product or service you or other competitors are offering. Easily add or remove parts of the template you wish to be included. An added advantage of using this template is that it can be download with ease on any electronic device. Check it out now!

Restaurant Customer Analysis Template

Restaurants should be aware of their customers’ wants and need as these are the key factors of major business decisions. With the help of this above-mentioned template, you can make a professionally drafted and well-formatted analysis needed to help restaurant operators gather data. Usually from customer behavior via marketing segmentation and predictive analysis to direct marketing, site selection, and customer relationship management. Increase your potential to boost sales and profit with the use of this template now!

Customer Needs Analysis Template

Are you looking for a business tool to identify the requirements customers have for a product or service? Well, you’re in luck for we have just the thing you need. This analysis sample template is professionally designed to help users understand the customers’ needs and their position in the overall market. It makes use of well-researched and industry-compliant content drafted by our experts. You can now save a lot of time and effort as you fo not have to make an analysis template right from scratch. Check it out now!

Customer Service SWOT Analysis Template

Customer Analysis Template

Simple Customer Profitability Analysis Example

Customer Value Chain Analysis Example

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Apart from industry analysis , knowing the needs and demands of your target and potential customers can also help you thrive and be successful in a stiff and competitive environment. If you want to achieve your business goals and objectives while sharing the marketplace with competitors, developing a customer analysis can help you a lot. If your business can have a full understanding of the elements that affect the purchasing decisions of your clients or customers, then you can easily make ways and adjustments on how you offer and market your products and/or services.

Why Does Your Business Need Customer Analysis

Using analysis examples provide businesses the chance to change or remove processes and activities that do not work, maintain efforts that yield the most favorable results, and develop activities that can get more clients for the business. Aside from these, listed below are more reasons why your business needs to have its customer analysis:

Customer analysis can help you focus on the acquisition of new customers while maintaining your current customer base. Planning your programs for retention can be more effective if you are knowledgeable on how you can show to your previous customers that they matter. The investment analysis examples that are available online can be of great help to you. Check them out now.
Customer analysis can give you an idea of how you can cross-promote your offers and discounts to the right audience. This way, you can achieve higher sales without hard selling your products and/or services to customers.
Customer analysis can help your business now your customers and their levels of engagement in the business you are running. This can help you develop strategies that can further improve your market positioning. Essay examples can also be of great help to you in making the right needed essays.
Customer analysis can make your business better in terms of customer satisfaction and service. With the help of the customer analysis at hand, you can easily identify the factors that can help you satisfy customers and keep them in your business.
Customer analysis helps your market disassembly decisions better and this leads to a better success rate. You may also check out needs analysis examples . This document can easily allow you to target potential customers from a specific group or range since you are already aware of their activities and how your offers can impact their daily undertaking.
Customer analysis can also give your business a higher chance of retaining and also, pulling in new customers and making them patrons. Loyalty can be developed between the business and the market if you can consistently give the demands and needs of your clients.
Customer analysis can contribute to the success of your marketing campaigns from its stages of planning up to final execution. With a comprehensive customer analysis, you can target specific customers in given demography in the most cost-efficient and effective way possible. You might be interested in organizational analysis examples .

Customer Analysis and Targeting Example

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Defining Customer and Business Requirements Example

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Basic Consumer Behavior Analysis Example

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Customer Profitability Analysis Example

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Market Analysis and Audience Research Example

Customer Behavior Analysis Example

Needs-Based Analysis Customer Reviews Example

Needs-Based Analysis of Online Customer Reviews Example

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Customer Analysis and Market Strategy Example

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Customer Needs Analysis Example

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Benefits of Having Customer Analysis:

Aside from survey questions to ask your customers , you also have to develop an effective customer analysis that can further showcase the movement and activities of your target market. If you can make a thorough and professionally formulated customer analysis, then there are a lot of potential advantages that your business can experience. Here is how your business can benefit from having customer analysis:

Creating a cusotmer analysis can presnt your business accurately and as per the market place. If you know how the perception and impression of your customers can affect your business, then you can make corporate messages and branding statements that can segment your customers better. Requirements analysis examples and samples can be of great help to you.
Making a customer analysis can reduce your business’ cost of campaigning and marketing as this gives all the customers a gist fo what you do without the need for marketing. If you already know who to specifically target, then your budget for advertising and promotion will not be put to waste. Business analysis examples can be of great help to you. This document can also help you to narrow down your marketing efforts based on what are the most necessary and beneficial for your business.
Developing a customer analysis can help you keep in touch with the right customers. This can lead to a faster return of investments as you can increase customer loyalty which is very important if you want people to continue purchasing your products and other offers.
Having a customer analysis can lessen the possibilities of attrition. If you will be aware of the level of relationship that you have with customers in terms of their purchasing activities, then you can already predict the customers who can potentially discontinue their support to the business. With this, you can develop programs that can help these customers stay for the business to still benefit from their purchasing power.

Market Analysis for Customer Segmentation Example

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Repeat Customer Presentation Analysis Example

Repeat Customer Presentation Based on Analysis of the Transaction Data

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Tips in Developing Customer Analysis:

The studies and researches that you will implement for your business are aligned with one another. A customeer anaysis can stregthen the claoms and the results of the market on the whole. You can check market analysis – demand and supply for more. This can also go the other way around if you want to ensure that the demand of the customers is truly aligned with how you prepare the supply of the business.

Before making a customer analysis, you must know what are the basic factors and elements that need to be added in an analysis in the first place. This means that you need to consider to gather the precise and necessary information so you can make the most useful and effective customer analysis results. Aside from that, a few of the tips that can help you develop an impressive customer analysis include the following:

You need to carefully analyze the habits and activities if your clients. The content of the customer analysis of your business needs to be based on first-hand information. Doing this can make the document more effective. Take a look at operational analysis examples and samples for more.
Other than the basic and known factors that can affect the purchasing decisions of new customers, you also need to seek for the reaction and comments of these customers after buying an item from your business or acquiring your services. Be reminded that new customers can share information about your business and the details that they will disclose can affect the perception of other people who have not tried your offers yet. You may also want to see the process analysis examples and samples that are available online for more.
You can be well organized within the process of development if you use the customer analysis perfectly. You have to make sure that the steps of the customer analysis procedure, the materials that you will need for data gathering, and the metrics and measures that you will follow are prepared and well-arranged. This can result in a great customer analysis document that is complete and easily understandable to others. You can check the sales analysis for more.
Allow the customer analysis to be a part of the business plan you make. It is essential for the information that you will gather in this activity to serve as the foundation of the new strategies of your company.
If you will refer to existing examples that you can download, it will be easier for you to create a custom analysis of your own without sacrificing the document’s quality. Check root cause analysis for more.

Approaches to Customer Analysis Example

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Customer Analysis Presentation Example

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Customer Analysis – Discussion and Example

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How Does Customer Analysis Affect a Business?

If you want to know to use a SWOT analysis , then the first thing you need to do is know the internal and external factors that can affect your business. In one way or another, having customer analysis can truly impact your business and the way it operates. A few changes that can occur if you use a customer analysis are mentioned below. They are:

You can attract potential customers into trusting your brand and what you can provide them with.
You can take a foot forward from your competition in the market.
You can benefit financially as an increase in actual sales can be achieved.
You can present the quality and value of your products and/or services accordingly.

If you are unsure of how to create a customer analysis, then the template in this article can be of great help to you. These examples and other information can be of great use so that you can make the needed document. Make sure to use the maximum potential of these references as having a well-thought and carefully planned customer analysis can be one of the strengths of your business. Financial analysis examples and samples can also be of great help to you in making the needed financial decisions as and when needed.

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Customer service analytics – A comprehensive guide

October 16, 2023 • 10 min read

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CSA enables support professionals to capture, process and analyze tons of raw customer data into actionable insights that can be used to inform every customer-facing function - from support to sales to marketing.

Now more than ever, customer service analytics is in the spotlight.

Why, you ask?

Listen to Gartner’s take on CSA: 84% of customer support leaders view customer data and analytics as “important” to “very important” towards attaining their organizational goals in 2023. For all the respondents, CSA emerged as the topmost priority for achieving their customer service objectives .

Understanding customers’ needs and expectations for their service experience is integral for improving loyalty and creating customer value , especially when organizations are up against economic headwinds. Jonathan Schmidt Sr. Principal, Gartner

So, if you’re serious about building a customer-centric brand, stick around. We intend to cover the length and breadth of customer support analytics – spanning its concept, benefits, use cases and key metrics. Let’s get started.

What is customer service analytics?

Why is customer service analytics important to businesses, types of customer service analytics, use cases & examples , important metrics of customer service analytics , how to perform root cause analysis in customer service with the help of data and ai.

Customer service analytics (CSA) is the process of tracking and processing customer data from various touchpoints and tools to generate intelligible insights for business leaders and support professionals. The data is gleaned from pre-purchase queries, social media comments, purchase/return histories, reviews, customer surveys and beyond. Yes, the coverage of CSA is comprehensive, and the application is business-wide.

Imagine an everyday scenario at your contact center.

You trigger a social media poll to gather early feedback after a big product launch. All kinds of poll responses flood your timeline. However, without customer service analytics, this mammoth data is just noise. It is CSA that converts data to insights and delivers visual customer service reports that stakeholders seek.

CSA stems from the concept of Earned Growth – a metric introduced by Bain & Co. to define the quality of business growth. It measures the segment of business growth attributed to existing customers, organic referrals and retention efforts. In other words, it quantifies your customer lifetime value and its impact on your overall revenue.

Earned growth holds a lot of weight in a hypercompetitive business landscape marred by steep customer acquisition costs. That’s what makes customer service analytics an essential building block for modern enterprises.

We have touched on the benefits of CSA briefly. To elaborate, customer support analytics drives:

Improved customer satisfaction : Deloitte found that brands that analyze customer interactions rigorously witness 20% higher CSAT or customer satisfaction. By aligning products and processes to real-time demand, they are able to deliver hyper-personalized customer experiences that the modern customer craves.

Cost and operational efficiency: Analyzing customer interaction indicates the loopholes in your macro and micro processes and teams. With timely intervention, you can cut support costs by 15%-20% , according to McKinsey.

Likewise, CSA helps with unclogging your operational processes with efficient tagging of customer issues. When tickets are tagged correctly, they are routed to the right teams/departments for efficient resolution.

💡Pro tip: There are omnichannel ticketing tools that allow task assignment to relevant teams when certain predefined conditions are met. Agile operations that move on autopilot save you tons of time and effort.

Sprinklr Service is a great example of an omnichannel ticketing tool

Data-driven decision-making: As stated, support data and insights shape your product roadmap, sales offerings, marketing campaigns and many other strategic decisions. With astute data for guidance, your business can make decisions 2.6x faster than peers who don’t use data analytics. It’s also easier to pivot and change directions with a data-backed approach to defend yourself.

Customer service analytics typically fall into a few buckets based on the insights they generate and the input they require.

Prescriptive analytics

These analytics give actionable recommendations to resolve existing issues and refine your customer support strategy .

Example: Customer analytics tool detects customer disengagement and possible churn. It suggests quick fixes such as deals and discounts to re-engage the at-risk customer.

Descriptive analytics

Descriptive analytics summarize insights and pinpoint trends from historical customer data to help you decide the future plan of action. Example: A channel-wise analysis of incoming tickets can identify your customers’ preferred communication channels and guide your resource allocation.

Predictive analytics

Predictive analytics, as the name suggests, forecasts potential issues based on historical trends. Thereafter, proactive measures can be implemented to avoid support mishaps and undesirable outcomes. Finance and marketing professionals use these analytics extensively to risk-proof their strategies. Example: Agent absenteeism is common in holiday seasons, which leads to long wait times and churn for customers. If your customer service analytics tool predicts these instances, proactive measures can be taken to avoid understaffing and its aftermath.

Staffing forecasts in Sprinklr's Workforce Management tool

Diagnostic analytics

Diagnostic analytics helps with root cause analysis of specific events by examining customer data. It is great for deciphering trends and patterns in customer behavior after milestone events such as product releases or updates.

Example: A spate of customer complaints after a new campaign indicates brewing trouble. You can identify the causal factors by scouring customer call transcripts and messages.

Based on the application, customer service analytics can be categorized as:

Customer journey analytics

A type of predictive analytics, customer journey analytics presents a helicopter view of the customer journey. It shows potential engagement and revenue opportunities that crop up when click-happy customers switch channels. With an analytics tool watching their moves, it’s easy to keep pace and swing into action quickly. Open rates of outbound emails and purchase/return histories can divulge journey-related data.

Customer experience analytics

This category covers standard metrics that give visibility into customer satisfaction (CSAT), first response time (FRT) and average handling time (AHT). The insights can be used to optimize workflows and turbocharge your sales, marketing and support teams.

Customer retention analytics

This bucket entails all the metrics that foster customer loyalty and retention, including net promoter score (NPS), customer effort score (CES) and customer lifetime value (CLV). The underlying logic is that high-effort interactions signify a lousy customer experience, which erodes customer loyalty. Conversely, effortless customer interactions result in positive experiences, leading to high customer loyalty and repeat interactions.

En masse customer interaction opens the floodgates to valuable customer data. If you are underutilizing customer service analytics, there are plenty of use cases to give you a winning start. Let’s discuss them.

Use case 1: Build self-serve tools

Top contact driver data can guide your self-serve support strategy and help you build knowledge bases , FAQ chatbots and troubleshooting resources. Empowered customers are happier customers.

Use case 2: Gather product/service feedback

Combining customer surveys and review platforms will uncover the customer’s perception of your brand and products/services. With this added visibility, realign your product roadmap and prioritize enhancements that make sense.

Use case 3: Improve ticket prioritization

Ticket tagging and priority ought to be based on issue complexity and sentiment analysis . Customer service analytics can help put a pin on these variables so that SLA violations and escalations are minimal.

💡Pro tip: Not all incoming messages warrant a response from support teams. There are AI-powered customer support tools that filter engageable messages from the crowd. With ticket queues decongested, priority setting and time management become easy for agents and supervisors.

Use case 4: Manage brand health on social media

Tracking brand sentiment on social media platforms is essential in this day and age where negative PR spreads like wildfire. Customer service analytics of predictive nature can notify you as sentiment around your brand dips, enabling you to take timely action.

There are scores of customer support metrics that need to be tracked in order to get a holistic picture of your brand health. However, these six metrics are non-negotiable when it comes to defining business growth in the CX realm:

1. Customer Satisfaction (CSAT)

CSAT indicates overall customer happiness with your brand, products and services. It is the median response of all your customers to the question – On a scale of 1-10, how happy are you with your experience with us today? The higher the score, the better it is for your brand.

An automated CSAT survey for customer support analytics in Sprinklr

2. Customer Effort Score (CES)

CES measures the amount of effort customers exert in order to get information, resolutions or assistance from your brand. If a customer faces friction while navigating your website or accessing your support, the customer experience suffers which spells trouble for any brand.

3. Customer Lifetime Value (CLV)

CLV quantifies a customer’s lifelong spend with your company. If a customer repeat-buys from your brand or brings in referrals or positive engagements, their lifetime value spikes, indicating satisfaction with your brand as a whole. Contrarily, dipping CLV shows dissatisfaction and can be rectified with targeted offers, loyalty incentives and other strategies.

4. First Contact Resolution (FCR)

FCR is the percentage of tickets that are solved in the first instance, without the need for repeated contacts. It evaluates the efficiency and quality of your support function - from your agent quality to your routing algorithm. A brand that is able to deliver prompt and accurate resolutions in the first go is set for success in this era of instant gratification.

5. Customer Retention Rate (CRR)

CRR is the percentage of total customers your business is able to retain over a fixed period of time. Modern customers value product quality, personalized experiences and support responsiveness in brands they patronize. So, nail these aspects if you want to improve customer retention and avoid hefty customer acquisition costs.

6. Customer Churn

Customer churn defines the number of customers who abandon your brand in a specific period of time. It is inversely correlated to customer retention. Customer churn is a precursor of doom for modern brands as it can set off a domino effect. If spurned customers vent on public forums, they can turn off other existing and prospective customers into churning as well.

Interesting read: 7 proven ways to reduce customer churn rate

The global customer analytics market is expected to skyrocket on the back of big data and artificial intelligence. AI, as a technology, is brilliant at number-crunching tens and thousands of conversations in seconds. There is little room for subjectivity or human error in the analysis. Additionally, trendspotting is easier with AI removing layers of unwanted data and laying bare the metrics that matter.

With the advent of natural language processing (NLP), synthesizing voice and text data has become easier. NLP processes conversations like humans – in semantic phrases, not standalone keywords. That’s why root cause analysis (RCA) in customer service is now more objective and accurate than ever.

To summarize, customer support analytics are foundational to business excellence and growth. In the right hands, CSA has the power to harmonize core business functions with customer needs, interests and demands. When customers feel heard and valued, magic happens.

Still skeptical?

Check out Sprinklr Service , which powers customer support for nine out of 10 leading enterprises including Ho nda and Uber .

With AI-powered reporting and analytics software , Sprinklr can glean insights from 100% of your customer conversations across 30+ channels to give you comprehensive insights. Persona-led dashboards and customizable reports enable easy comprehension of data. Request a demo or book a free trial today .

Frequently Asked Questions

Customer service analytics can be categorized into four main categories:

Prescriptive analytics

Descriptive analytics

Diagnostic analytics

Predictive analytics

Data analytics in customer service helps analyze customer data to gain insights, improve support processes, personalize interactions and predict customer needs, ultimately enhancing the overall customer experience.

Metrics in customer service analytics are essential because they help:

Identify issues and detect improvement opportunities

Measure performance and ensure quality

Simplify decision-making with data-driven insights

Franchise Business Plan Template

Franchise customer analysis.

The customer analysis section of your franchise business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: college students, families, fitness enthusiasts, teens, baby boomers, etc.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of franchise you operate. Clearly baby boomers would want different service options, and would respond to different marketing promotions than young adults.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, include a discussion of the ages, genders, locations and income levels of the customers you seek to serve. Because most franchises primarily serve customers living in their same city or town, such demographic information is easy to find on government websites.

Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.

FRANCHISE BUSINESS PLAN OUTLINE

Franchise Business Plan Home
1. Executive Summary
2. Company Overview
3. Industry Analysis
4. Customer Analysis
5. Competitive Analysis
6. Marketing Plan
7. Operations Plan
8. Management Team
9. Financial Plan
10. Appendix
Franchise Business Plan Summary

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The Ultimate Business Plan Questionnaire You Need in 2024

May 31, 2024

Feeling overwhelmed with all the information needed to include in a business plan or not getting where exactly to start? Not a problem, you’re not alone! It is where a well-designed business plan questionnaire can be a lifesaver!

A business plan questionnaire is a list of questions designed to support you in the business planning process so that you organize the plan properly and do not miss out on any essential points.

It also helps you in identifying the gaps in your plan. The only thing you need to do is answer all the questions practically, and Voila you will have all the things you need in a plan.

So, let’s proceed without any further delay!

Questions your business plan should answer

The business plan questionnaire helps you with writing your plan. It will give you directions for the future and allow you to analyze each aspect of the firm. Be sure to provide practical answers to every question. Here are the questions you need to consider:

1. Executive Summary

An executive summary is a brief of the whole plan and is responsible for grabbing the reader’s attention to get further interested in your firm. Some questions your executive summary should answer are:

What is the business and what does it do?
What is the problem here and how is it being solved by your business?
What product or service are you providing?
What is the Return on Investment (ROI)?
Why will your business succeed?

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2. Company Overview

Now that readers have gone through the overview, they would want to know your business in detail. Some of the questions this section should include:

What is the business name, and what is its legal structure?
What is the business’s mission and vision statement?
When was the firm founded, and what is its history?
Where is the business located?
Who are the founders of the business, and what is their educational background & experience?
Why did you start this particular business?
What are the future growth goals of your business?

3. Market and Industry Analysis

A good market & industry analysis shows that you know your competitive landscape and understand your competitor’s strengths & weaknesses, along with their market positioning. Some of the questions this section should solve are:

What is the current market size for your product or service?
What are the recent trends?
Who is your target audience & prospective customers?
What is the growth potential?
What are the entry barriers in the industry?
What are some rules and regulations that impact your firm?

4. Competitive Analysis

Once you know the market, it is important to understand your competitors to know how well your products or services will perform against theirs. Here are a few questions to consider for this section:

Who are your direct and indirect competitors?
What is their target market?
What are their strengths and weaknesses?
What is their market share & position?
What is your competitive advantage?
What is their pricing strategy?
What is their marketing strategy?
What are some opportunities or threats posed by competitors?

5. Products and Services

The product or services section is where you showcase your product or services in detail along with their descriptions. Below are the questions for this section:

What products or services are being offered by your business?
What makes your product or services unique from competitors?
What is the current stage of development of your product or services?
What are the quality measures that you will incorporate to maintain the quality of your product or services?
Are there any additional services you provide?
How are your products or services delivered?

6. Sales and Marketing Plan

The sales and marketing plan section outlines the strategies that you will include to promote your product or services, attract new customers & retain old ones.

Here are certain questions that this section should answer:

Who are your target customers?
What are your competitive advantages?
Are there any existing customers?
What is your sales volume target?
What is your budget for marketing activities?
How will you convert leads into customers?
How will you enhance the overall customer satisfaction?

7. Operations Plan

An operation plan compels you to know all the hows of your business like how you will meet the goals or how much time you will need to complete the tasks. In short, it outlines the specific strategies to turn your goals into reality.

Some of the common questions it should solve are:

How will you deliver your product or service?
What equipment and resources will you need?
How will you manage your inventory?
How will you check the quality of your product or service?
How will you handle customer inquiries and complaints?
How much and what training do your employees need to work efficiently?

8. Management Team

A strong business is the result of the shared expertise of all people working for it. So, this is the section where you showcase the management team of your business and what they bring to the table. Here are some questions for this section:

Who are the key management members of the firm?
What experience and educational background do they have?
Who is the founder/CEO of the business?
How will the management team make decisions?
Do you have an advisory board in place?
How many employees does your business need?
Do any team members have specific market knowledge?

9. Financial Plan

The financial plan is where you outline your forecasted revenues, expenses, and profits, giving insight into the business’s financial health. Here are certain questions this section should address:

What are the startup costs of your company?
What is your current financial planning & situation?
What is the projected profitability of the business?
How much funding are you seeking?
What is the expected return on investment (ROI) for investors?
What is the revenue model?
What is the break-even point?

10. Appendix

The appendix is the last section of the plan. Here, you can provide all the supporting documentation that validates the other contents of the plan. Some of the things to include in your appendix are:

Resumes of the key management team members
Copies of any agreement with the suppliers or anyone else
Copies of legal documentation
Organizational charts
Marketing materials

These were some of the business plan questions to ask while writing the plan. Let us move ahead and learn more about the questionnaire!

How to use this questionnaire?

When you use the business plan questionnaire correctly, you won’t miss any important details, and your answers will be clear and organized. Thus, this section walks you through the usage of the questionnaire. Follow the below steps:

Review questions: Read the entire questionnaire first, and try to understand its scope and try to understand the information needed to answer those questions.
Gather information: Gather data and other relevant documents, like financial statements, market research, and other relevant operational details.
Answer honestly: Be very honest while replying to all the questions, because one lie and your readers will take zero interest in your business.
Develop the plan: Use the answers as a foundation to draft a comprehensive plan.
Review & edit: Review the draft, fill in any gaps, and make adjustments for clarity. You can even ask someone else to review it and give you feedback.

Prepare a detailed business plan using Upmetrics

So, that’s it! The above sample survey questionnaire for a plan will guide you in writing your plan.

But for constant guidance, while writing the whole business plan, you can consider using Upmetrics .

It has 400+ customizable business plan templates , which means every business has a suitable sample for them. Apart from that, it provides you with AI assistant that helps you auto-write your plan, answer your business-related queries, and guide you at each step.

So, if you are someone looking to write a business plan, create a pitch deck, or prepare financial projections, then Upmetrics is the best stop.

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with step-by-step Guidance & AI Assistance.

Frequently Asked Questions

Can i use a business plan questionnaire to create a complete business strategy.

Yes, you can use a business plan questionnaire to create the entire plan. A questionnaire forces you to go through every different aspect of the business. Thus, a questionnaire can be a helpful tool for organizing and outlining the key elements of a plan.

Who should use a business plan questionnaire?

A questionnaire is a helpful tool for all people related to the business planning process. Like advisors & consultants, small business owners, existing businesses, individuals, non-profit organizations, and anyone who is creating a business plan.

What are the benefits of completing a business plan questionnaire?

Completing a plan offers various advantages like:

Clarifies business goals, strategies, and market positioning
Recognizes potential challenges, allowing for risk management
Ensures that all the essential components are addressed in your plan
Increases the chances of funding by encouraging to prepare a well-prepared and data-backed plan

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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COMMENTS

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How to Write a Customer Analysis

Demographics

Create a professional business plan

Values and beliefs

Buying behaviors

Technology use

1. Use existing data

U.S. Census Bureau

Bureau of Labor Statistics

Bureau of Economic Analysis

Federal Reserve

Industry associations

Academic institutions

2. Review customer feedback

3. Use third-party data

Google Analytics

Social media metrics

Specialty tools

4. Create a customer persona

5. Connect to your problem/solution statement

The Bplans Weekly

The quickest way to turn a business idea into a business plan

How to Write a Customer Analysis for a Business Plan

Define Your Target Audience

Gather Data on Your Customers

Segment Your Customers

Analyze Customer Needs and Preferences

Assess Customer Behavior

Identify Growth Opportunities

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How to Conduct An Effective Customer Analysis in 8 Steps

What is customer analysis?

Why is customer analysis important?

Create a personalized marketing strategy

Reduce churn and increase customer retention

Make smarter product improvements

I dentify your most valuable customers

How to conduct a customer analysis

Structure your existing customer base

Identify the needs of your customers

Collect direct customer feedback with in-app surveys

Invite your customers to one-on-one interviews

Gather insights about your customers from internal teams

Leverage product analytics

Perform social listening

Create user and buyer personas

Build a customer journey map

Best tools for customer analysis

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