[Article] The Benefits Of Performing A Customer Analysis
Taking the time to analyse your business is essential to developing an airtight sales and marketing plan. Often small businesses will dive head first into marketing, spending vast sums without having first developed the proper foundation which leads to wasted time, money and effort.
If I were to ask you what you think a blue chip or large multinational company does when running a marketing campaign, part of your response (in one way or another) would include ‘perform a customer analysis’ yet some businesses either fail to do this or don’t do it regularly enough. Insufficient time, resources or deeming it not necessary are common reasons why someone won’t perform a customer analysis yet it’s just as important for your business as it is for the big guys.
By performing a customer analysis, you will not only begin targeting a more specific audience, but also send the right message to that audience. The result? Increased sales, improved customer retention, heighten business security and a better focus for your business.
A customer analysis is broken down into four sections; demographic analysis, psychographics analysis, geographic analysis and behavioural analysis, and we will look at each in turn.
Demographic variables such as age, gender, income and occupation hold important clues to consumer behaviour. People who share the same demographic profile usually have the same purchasing behaviour and by understanding these variables you can target your marketing message more effectively to better resonate with a particular type of customer. 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 race would my customers be?
• What is their marital or family status: Are they married, single, divorced?
• What are the hobbies of my target customers?
Psychographic information might be your buyer’s habits, hobbies and values. Demographics explain “who” your buyer is, while psychographics explain “why” they buy. Demographic information includes gender, age, income, marital status where as psychographics looks at the psychology of your customers. Typical questions to ask when determining the psychographics of the target market include:
• What are their interests?
• What activities do they participate in?
• What drives them to buy your product?
• What attitudes do they have towards certain things?
This is when a business divides its customers on the basis of geography. The market can be divided into different counties, regions or countries, into rural, suburban and urban areas, and by population size. This has the advantage of showing you where to focus your advertising budget and highlighting things to consider when dealing with different regions or countries. This will lead to the right marketing message being seen by the right people.
Behavioural segmentation divides the market into groups based on their knowledge, attitudes, uses and responses to the product. Typical questions to ask when determining the behaviours of the target market include:
• 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?
The customer analysis part of the marketing plan is all about market research and gathering data that provide insight into who the customer is, how to segment the market, and how the customer behaves. The more data you have, the more able you are to select the best market and to utilize a marketing mix to reach that market.