Business owners should conduct a customer analysis during the business plan creation stage, but may also coordinate one when considering marketing techniques. In either case, it is vital that business owners fully understand their customer base in order to be successful. Here are some important steps to conduct a successful customer analysis.
Define Your Customer
Demographics is the key word in defining your customer. This tangible information includes gender, age, race, marital status, size of household, income and education levels and occupation, among other things. If you are selling locally, you may acquire such details through the Census Bureau for free online. Selling online is more difficult to pinpoint. The audience base is broader so it is even more important to identify your target audience. Do not be afraid to get specific, as this can give you a clearer marketing solution down the line. While it would be nice to appeal to all potential customers, this step should be used to identify the best customer for your product or service. This is the first and possibly most important step for business owners conducting a customer analysis.
Examine Customer Buying Habits
Demographics is important in defining the customer, but you may also wish to consider customer lifestyle. This may be more difficult to identify, as it includes social factors and belief systems. Lifestyle can help you create a behavior profile of your customer related to their purchasing actions. Try to figure out where and when customers buy your product or service. Customers in your target market might purchase impulsively or after careful consideration; it is worth knowing which. Impulsive buying generally only involves one customer. Careful consideration, on the other hand, may require multiple bids or price comparisons and the involvement of various family members. It is important for a business owner to be aware of these aspects discovered during the customer analysis.
Look At The Current Market
Before you launch your business or new marketing campaign, you should be aware of trends in the industry you wish to enter. A growing industry should be your target. Try to avoid a declining industry unless you have a radical product that will disrupt and revolutionize the market. Do some research on similar companies to find out what your competition is doing. Find out what is working for them and what is not. There are several positive outcomes from this step, including determining if there are needs currently not being satisfied in the market. You may also be able to win customers from competitors once you have identified what they are doing wrong and do it better. Business owners can also use this information to anticipate change required within the industry before an issue arises.
The relationship of these three components of customer analysis should provide business owners direction in how to conduct business going forward. After defining the customer, it is much simpler to tailor a product or service to that specific consumer. Knowing buying habits will help hone marketing practices towards your specific customer base, as it includes more details not covered by demographics. Finally, knowing the market well should give a business owner an idea of the landscape within which the product or service will be selling. Whether it is during the creation of the business plan or prior to launching a new marketing campaign, customer research gives the business owner focus towards their target customer, market details and methods with which to succeed.
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