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How to Conduct Customer Analysis and Customer Segmentation Consumer Insights

Consumer Insights By Kit Smith on November 24th 2016

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

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 sub-groups that have 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?


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Who are 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 to not fall into 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 data, 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.

customer analysis involves identifying who your customer actually are

It’s also worth considering at this stage if the buyer and user are the same person. In a B2B setting, the buyer might hold budget responsibility but not actually use the service/software/product. In a B2C setting, there are several situations when a buyer might not be the user; a toy water pistol or a diamond ring are unlikely to be used by the purchaser.

Segment these groups

You cannot undertake an accurate customer analysis without segmenting your audience into groups whose members are homogenous while being 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

segment your customers like they're sweets

Develop customer profiles

Take your data, your segmentation criteria, some educated guesswork, and develop some buyer personas. It helps to have personas so you can 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 their primary job responsibilities
  • Demographics: 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 their 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.

maze

There are numerous ways to do 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
  • 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.

key in door

Solution based answers should come out of this process. Rather than saying, “we have these features”, you should be focusing on how those features deliver solutions to the problems faced by your customers and prospects.

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.


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Kit Smith

@Kit_Smith

Kit is a writer and marketing expert. When he's not researching ways to make you better at said marketing, he's often lost in foreign countries, or making pottery (or both).