The most successful companies today are always competing and finding ways to improve based on consistent customer analysis. The ones that don’t, well, you don’t hear about them anymore as they eventually get run out of the market.
The lifeblood of any business is customers, that’s a given. But just because you perform an analysis of customers one time doesn’t mean that your job is done. Customer preferences change, and so do their buying habits.
To keep your customers happy, you need to perform regular customer analysis activities for your business to understand their likes, their dislikes, what motivates them, and why they are leaving you. Understanding your clients at this level means you can create a marketing strategy and brand positioning strategy that converts the “lookers” into “buyers”.
If you are unsure how to go about performing an analysis of your customers, then you are in the right place. I have done this before, and will share with you a simple approach for analyzing your own customer base.
What is customer analysis, and why does it matter?
At a high level, customer analysis involves examining existing customer activity to identify the way you can improve your offering. So, not just selling product, but understanding exactly how your customers feel about their purchase and where you can improve.
This kind of customer research allows you to market your products more effectively because there is a greater chance that you will meet their specific needs (which can keep them coming back for more).
Some major benefits of continually performing an analysis of your customer base include:
- Decrease in costs. If you understand what your market is looking for, then you don’t have to guess when it comes to your marketing strategy. This streamlines your market expenses considerably, making them more cost-effective for your business.
- Increase in revenue. Knowing your customers means you know what they want, and your products can give them what they need. Your marketing campaign convert better, you make more money!
- Increase in productivity. Your sales team won’t waste time on poor leads, and your product development will clearly understand development priorities.
Sounds pretty good, right? 🙂
The benefits of going through this process are definitely worth the effort.
TIP: Customer analysis can help make marketing easier, but only when using relevant tactics. Check out the Top 5 Marketing Websites for Startups for the best marketing tips.
There are three types of customer data you should obtain.
There are several ways to obtain customer data, and the type of data you can get depends on what it is you want to analyze. Most businesses analyze customers in the following ways:
- Demographic analysis. The basic breakdown of your customer base. Things like gender, age, level of education, occupation, and physical location all help you to tailor your products (and sales messaging) accordingly. It is the most basic data that you can get on your customers.
- Behavioral analysis. As the name suggests, this data gives you insights on the types of activities your customers take in relation to your business. Website visitor trends, common account activities, social media activity, and how they use your products.
- Sentiment analysis. Of all the types of customer analysis, this one is the most valuable that you can obtain. This is how your customers feel about your product or service based on actual experience. You can get this from active surveys, or just by looking at the reviews that they leave for your company.
All three of these are important to analyzing your customers and their desires. If you can get demographic, behavioral, and sentimental data then you can get a complete profile for your existing (and future) customers.
How to find the right customer information.
The three main data points that you should focus on capturing when analyzing your customers are demographic, behavior, and sentiment. Getting this information can be tricky, but the more you can capture, the better it is for your business.
This is an area where you need to be a little careful. Certain information (like gender) may not be necessary to obtain from customers, and it will be offensive if you ask. That said, usually that kind of information isn’t vital for most companies.
The three primary demographic data points that you should focus on getting include:
- Geographical location
- Age range
- Income and/or education
The good news is, you can get these a few different ways. For example, when someone makes a purchase, ask for the full billing address when accepting credit cards. Besides adding a security to your checkout, this will give you (most likely) where the customer is located.
Age range and income/education will be a little more challenging. However, you can get a sample just by using Facebook Ads or Google Ads for your business. Facebook ads (or Instagram, if applicable) can provide you a snapshot of this data, including age range.
Google Analytics can provide solid demographic information as well, but make sure you add a consent banner for on your site, so your site visitors can opt out of providing this data.
This kind of information is easier to capture if you are selling an app or hosted software. Simply configure tracking in your app to monitor how your customers use your product. By doing this, you can see:
- Which pages are the most visited
- Which features are switched on the most
- Which features don’t get used at all
- Which pages elicit the most support requests
- How long customers interact on your app
All of this information is useful because it allows you to intelligently build out your software, focusing on the areas that will provide the most utility for customers.
Of these, my particular favorite is knowing which pages elicit the most support requests. For example, if you have a chat widget, then you know the page (or settings) a customer is currently looking at when they initiate a support conversation. If a particular setting page results in more requests than another, then that indicates that this page needs to be improved.
Now, even if you don’t sell software, you can still get behavior data by tracking customer activity within their accounts. For example, if you have a Shopify store, then the same kind of tracking can be in place.
Where things really start to get interesting is when you pair up the demographic information with the behavioral data. This can give you insights into individual customer segments and their preferred needs. For instance, maybe you find that customers located in Europe use a particular feature more than those located in the USA. With this insight, you can craft marketing campaigns for each segment around those specific features.
Sentiment data is the most valuable you can obtain on your customers because it gives you insight into what they are feeling about your business offerings. These feelings translate to their experience, and how they view your offering in the market in general.
There are a few ways to get sentimental feedback from customers. One is to proactively survey them. There are a few tools you can use to accomplish this. Some will send surveys via email, and others (like Hotjar) will let you administer mini-surveys directly on your website.
But far and above surveys, the best way to get the sentiment of your customer base is to look at the reviews that they leave on third-party websites, as they are unfiltered. Even better, you can get the sentiments of your competitors’ customers but looking at reviews their customers leave for their offering.
This kind of review analysis can take time, but it’s worth it. That said, you can also leverage AI & machine learning to take it to the next level. This is where GapScout thrives. Our AI spots the gaps in your market based on the sentimental data left by customers in your industry.
Combining these three types of customer analysis data gives you a complete picture of your market.
Information is power. The more information you can obtain about your customers and your market, the better your opportunity to position your business to serve it effectively.
Many businesses don’t go through the necessary steps to get accurate data about their market, which is a shame because the information is right there for the taking. Smart businesses know this, and capitalize on it.
It is never too late to start analyzing your market. In fact, you should do it often because market trends are ever evolving. If you want to know the best tools, then send us a message – we would be happy to point you in the right direction!
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