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How to Write a Customer Analysis Section for Your Business Plan
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Free Customer Analysis Template
- July 12, 2024
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A customer contributes significantly to building a winning brand.
Understanding your target consumer, their needs, the problems they face, and the way they behave assists you in creating products and services that can satisfy your customer needs.
Customer analysis is a quintessential part of your business plan. Writing it accurately will help you make informed decisions for other aspects of business planning, i.e. product development and business strategies.
So let’s get started. This blog post describes the process of creating customer analysis in a business plan and guides you with a customer persona example.
What Is Customer Analysis?
Customer analysis is an important section of your business plan offering a comprehensive and in-depth understanding of your potential customer. It is a study of their behavioral, psychological, and demographic patterns to help you make sound business decisions.
Such analysis assists in developing products and services addressing the pain points of your customers and in determining your pricing, marketing, and customer retention strategies.
Why conduct a customer analysis?
A thorough and insightful customer analysis offers a plentitude of benefits. Here are a few you should know of:
- Helps optimize product development by offering insights into customer behavior, needs, and pain points.
- Helps gain a competitive advantage by identifying the pain points that are unaddressed by competitors.
- Helps tailor your marketing efforts to cater to specific customer segments.
- Increases customer retention by giving you a thorough insight into what the customer needs and what drives their decision.
If you think of it, customer analysis forms the basis for designing your products and services, devising your marketing and sales strategies, determining your pricing point, and driving your business growth.
How to Write a Customer Analysis Section
Writing a customer analysis includes extensive research and collecting data from various sources. This data consists of qualitative and quantitative aspects which help you write an accurate customer analysis for your business plan.
Let’s now understand a step-by-step process to write your customer analysis.
![how to write a customer analysis for a business plan Steps to create customer analysis for your business plan](https://static-web.upmetrics.co/assets/media/artboard-1-copy-1-4.png)
1. Identify your customers
The first step of customer analysis is to identify your potential customers and collect information about their special characteristics. Such information comes in handy when you want your product and marketing strategies to align with your customers’ needs.
However, what details should you collect and how should you segment it? Well, segmenting in the following manner can help you get a headstart.
- Demographic: Age, gender, income
- Geographic: Location, type of area (Rural, suburban, urban)
- Psychographic: Values, interests, beliefs, personality, lifestyle, social class
- Technographic: Type of technology the buyer is using; tech-savviness
- Behavioral: Habits, frequent actions, buying patterns
- Industry (For B2B): Based on the industry a company belongs to.
- Business size (For B2B): Size of the company
Customer database can help capture the above data for existing businesses. However, for additional details, you can retort to surveys and forums.
If you are a startup, conducting an audience analysis might seem impossible as you don’t have an existing customer base. Fortunately, there are numerous ways through which you can study your potential customers.
A few of them are:
- Identifying who would benefit from your product/service
- Analyzing your competitors to understand their target customers
- Using social media to prompt potential buyers to answer questionnaires
2. Define the needs of your Customers
Now that you have identified your customers, the next step is to understand and specify their needs and challenges. This is the step where you need to go hands-on with your research.
Getting to know your customers’ needs helps you determine whether or not your product or service hits the mark.
You can adopt one of these approaches to understand the needs of your customers:
Engage directly with potential Customers
A very reliable way to get to know your customers is to simply engage with them, either in person or on a call. You can reach out to your customers using one of the following ways:
- One-on-one interviews
- Focus groups
- Beta testing (invite users to test your products).
These techniques can help you collect adequate data for your analysis.
However, before approaching your customers, set up a systematic survey that can get you structured data for analysis. To ensure that your questionnaire isn’t just covering surface-level information but a deep interrogation of customers’ problems, use the technique of five whys .
Collect data from your customer support
Customer support is the place where you can find raw and unfiltered feedback given by your customers. Analyzing this data helps you understand the pain points of your customers.
You can further gather direct customer feedback by contacting the customers who had issues with your products. This will help you understand the pain points and gaps in your products more vividly.
Run surveys and mention statistics
Talking to your customers helps you get qualitative information that can be used to alter your product or services according to your customers. The next part is to attain quantitative information, in other words, presenting numbers to support the previous data.
Conducting surveys is one of the commonly used methods for quantifying information. You can conduct in-app surveys, post-purchase surveys, or link surveys in email and apps, etc.
You can also collect statistical data to support your conclusions from the interviews. These include stating studies related to customer choices, results from popular surveys, etc.
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3. Create a Customer Persona
It is now time to present your collected data using a customer persona.
A customer persona represents a segment of customers with similar traits. It outlines the psychological and demographic features of your potential customer group and thereby assists you in making important strategic decisions.
Consider it as a tool that will make your data analysis process easier and more efficient.
Now, you can either use customer persona templates or an AI tool to generate your buyer’s persona. However, to get a more thorough insight check how a customer profile looks.
Customer Persona Example
This is a customer persona example of an internet service provider(ISP) to help you get a more practical overview.
![how to write a customer analysis for a business plan customer persona example](https://upmetrics.co/assets/media/customer-persona.png)
- About: A lot of customers remain at home and have a minimal and easy-going lifestyle. They need high-speed, interruption-free internet access.
- Demographics: Age is between 30 and 40, has a laid-back lifestyle, lives in suburban areas, and the income range is between $10,000 to $40,000.
- Professional role: Shop owners, employees, freelancers, etc.
- Identifiers/Personality traits: Introverts, like routines, make schedules, prefer online shopping, and stick with the companies they trust.
- Goals: Wants easily available service, and 24×7 customer support, prefers self-service technologies and chatbots over interacting with representatives.
- Challenges: Fluctuating internet connection while working or consuming media. Not enough signal coverage.
4. Explain the product alignment to the Customer’s Needs
You’ve gathered info and created customer personas. The final step is to explain how your product or service caters to the needs of your customers.
Here, you specify the solution you offer to tackle the challenges faced by your customers.
Mention the USPs of your product and its features, and clarify how they benefit the customer. Also, mention how your offerings make the customers’ lives better.
Continuing the previous example of an ISP provider, this company can show how its high-speed Internet plans cater to the needs of individual working professionals. They can focus on aspects like customizable plans, cost-effectiveness, and coverage in remote areas to attract users.
And there you have it—a guide to writing your customer analysis. Just ensure that you maintain accuracy while making assumptions and predictions to make this section useful for making further decisions.
Build a solid business foundation with customer analysis
Understanding you r customers inside out assists you in making profitable decisions for your business. But remember, it is an ever-evolving and continuous process. You need to analyze your customers as often as possible to stay updated about their ever-changing needs.
After all, understanding what your customers need and what they prefer will help you devise strategies that ensure maximum customer satisfaction.
Now quickly create customer profiles for your business with Upmetrics’s AI SWOT analysis generator. However, once you do that, use this tool to streamline your entire business planning process.
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![how to write a customer analysis for a business plan crossline](https://static-web.upmetrics.co/wp-content/uploads/2023/10/05124448/crossline.png)
Frequently Asked Questions
What key components should be included in customer analysis.
Here are the key components of a sound customer analysis:
- Market segmentation
- Customer behavior analysis
- Customer profiling
- Customer journey mapping
- Trend analysis and future customer behavior
How can I gather data for my customer analysis?
Here are a few ways for you to gather data for your customer analysis:
- Gather customer feedback using surveys, forums, and questionnaires.
- Use secondary methods to gather industrial data, competitors’ data, and data from publications.
- Use the collected data till data (i.e. social media analytics, customer support data) to form your analysis.
Can customer analysis help in forecasting future trends?
Absolutely, yes. A detailed customer analysis helps you to understand the emerging shifts and patterns in consumer behavior, thereby helping you optimize your product offerings and marketing strategies.
About the Author
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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
Reach Your Goals with Accurate Planning
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How to Write a Customer Analysis
![Author: Elon Glucklich Author: Elon Glucklich](https://secure.gravatar.com/avatar/cfd162c138ee8bd3498fae44a42d0c9f?s=32&d=https%3A%2F%2Fweb-cdn.paloalto.com%2Fbplans%2Fauthors%2Fdefault-author.png&r=g)
Elon Glucklich
9 min. read
Updated October 27, 2023
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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.
![how to write a customer analysis for a business plan 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.](https://web-cdn.bplans.com/bplans/content/uploads/2023/10/27113618/natures-cleaners-persona-card.png?format=auto)
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.
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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.
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How to Write the Customer Analysis Section of Your Business Plan
Written by Dave Lavinsky
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What is a Customer Analysis?
The customer analysis section which incorporates the essential steps of writing a business plan step-by-step is a key component of your business plan and assesses the customer segments your company serves. The objective of the customer analysis is to justify your market choice, identify differentiators, and prioritize the segments you are targeting.
Components of a Customer Analysis
A complete customer analysis contains 3 primary sections:
- Identify your target customers
- Convey the needs of these customers
- Show how your products and/or services satisfy these needs
Download our Ultimate Business Plan Template here
Why Conduct a Customer Analysis?
A thorough customer analysis provides the following benefits:
- Supports your market choice and helps you avoid entering too broad a market
- Helps you focus on serving current customers rather than trying to find new ones
- Enables you to determine which segments to prioritize and how much effort to put into each one
- Helps you craft a strategic marketing plan and platform to reach these customer segments
How to Write Your Customer Analysis
The first step of the customer analysis is to define exactly which customers the company is serving. This requires specificity. It is not adequate to say the company is targeting small businesses, for example, because there are several million of these types of customers. Rather, an expert business plan writer must identify precisely the customers it is serving, such as small businesses with 10 to 50 employees based in large metropolitan cities on the West Coast.
When defining your target market, be sure to identify the following:
- The market segment you are choosing to serve (i.e., age range, annual income, etc.)
- The geographic location of these customers (i.e., city, region, state)
- What is the average revenues/income of these customers?
Once the plan has clearly identified and defined the company’s target customers and the customer demographics, it is necessary to determine the size of your target market: How many potential customers fit the given definition and is this customer base growing or decreasing?
Next, the business plan must detail these customers’ needs. Conveying customer needs could take the form of past actions (X% have purchased a similar product in the past), future projections (when interviewed, X% said that they would purchase product/service Y), and/or implications (because X% use a product/service which our product/service enhances/replaces, then X% need our product/service).
Prioritize the needs of your target customer according to how critical they are, and include a description of each in your customer analysis. Be sure to answer questions such as:
- What pain points do these customers have? How is their current situation lacking?
- What will your product/service do to help solve these problems?
The business plan customer analysis must also detail the drivers of customer decision-making. Sample questions to answer include:
- Do the customers find price to be more important than the quality of the product or service?
- Are customers looking for the highest level of reliability, or will they have their own support and just seek a basic level of service?
- Why will customers purchase your product and/or service rather than look for cheaper alternatives?
Prioritize the benefits of your products and services according to how much difference they make for customers and include a description of each in your customer analysis. Be sure to answer questions such as:
- What does your product do? How is it unique or better than other similar products?
- What type of customer could benefit the most from this feature/benefit and why?
Be sure to also show an understanding of the actual decision-making process. Examples of questions to be answered here include:
- Will the customer consult others in their organization/family before making a decision?
- Will the customer seek multiple bids?
- Will the product/service require significant operational changes (e.g., will the customer have to invest time to learn new technologies, and will the product/service cause other members within the organization to lose their jobs? etc.)
Finally, identify each segment you are targeting and how much effort you will put into reaching them. Be sure to answer questions such as:
- How many customers are in each segment and how much revenue will they generate?
- What percentage of total industry sales does this represent?
- What market potential did we estimate for each segment and how does that compare with actual sales? Include the number of leads converted and average deal size.
Example Customer Analysis Template for a Candle Making Company
The needs of this customer segment are that they are looking for high-quality candles that are made with all-natural ingredients. The benefits of their product that are most important to them are that the candles are vegan, eco-friendly, and made with essential oils. Drivers of customer purchase decisions include quality, price, and unique offerings. The company’s target market size is 750,000 people which represent a significant portion of the candle industry. They will put effort into reaching these customers through online advertising, social media posts, and word-of-mouth.
It is essential to truly understand customers to develop a successful business and marketing plan. That’s why including a customer analysis in your business plan is so crucial. Likewise, sophisticated investors require comprehensive profiles of a company’s target customers. By spending the time researching and analyzing customers in your target market, you will develop both enhance your business strategy and funding success.
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Other Resources for Writing Your Business Plan
How to Write a Great Business Plan Executive Summary How to Expertly Write the Company Description in Your Business Plan How to Write the Market Analysis Section of a Business Plan Completing the Competitive Analysis Section of Your Business Plan The Management Team Section of Your Business Plan Financial Assumptions and Your Business Plan How to Create Financial Projections for Your Business Plan Best Business Plan Software Everything You Need to Know about the Business Plan Appendix Business Plan Conclusion: Summary & Recap
Other Helpful Business Plan Articles & Templates
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- Business Planning
How to Write a Customer Analysis Section for Your Business Plan
![how to write a customer analysis for a business plan customer analysis section of your business plan](https://bizplanr.ai/wp-content/uploads/2024/07/customer-analysis-section-of-your-business-plan.webp)
Written by Vinay Kevadiya
Published Jul. 4 2024 · 7 Min Read
"There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” – Sam Walton.
So, everything a business does is for its customers. Because they’re central, customer analysis isn’t just any other section of the business plan.
It's the key section that determines what your product or service will be, who will buy it, and how you will target them.
But how do you write a customer analysis section for your business plan ? Don't worry; here are six simple steps to guide you through writing this crucial section, along with an example.
Let's start by understanding what customer analysis precisely means.
What is customer analysis in a business plan?
Customer analysis in a business plan is a detailed look at your target customers, including their characteristics, needs, and buying behaviors. This analysis helps you understand your market better, customize your products and services to meet customer demands, as well as identify opportunities for business growth.
Why conduct customer analysis?
According to a Google survey, more than 40% of marketers use customer research and analysis to drive strategic business decisions.
Needless to say, there are multiple benefits to accurate customer analysis. Here are some of them:
- Helps in customizing marketing strategies for better customer engagement by understanding customer profiles.
- Assists in making informed decisions about product developments and improvements.
- Allows you to deeply understand customer needs reducing customer churn rate.
- Helps in identifying the pain points which supports gaining a competitive edge.
In short, the purpose of customer analysis in a business plan is to align your business strategy with the needs and behaviors of your target market.
6 steps to write customer analysis in a business plan
Now, that you understand why the customer analysis section is important, let's move forward with how to actually write one in 6 simple steps:
![how to write a customer analysis for a business plan 6 steps to write customer analysis in a business plan](https://bizplanr.ai/wp-content/uploads/2024/07/6-steps-to-write-customer-analysis-in-a-business-plan.webp)
1. Define your target customers
The first step of customer analysis is to define and identify your target customers. Here are the steps on how to identify your target audience through market segment:
Customer demographics
Firstly define the age range of your customers (teenagers, young adults, seniors, or middle-aged). Then see to which gender your product or services appeal.
Also, consider the educational background, occupation, and income level of the target customers.
Psychographics
The psychological and emotional factors affecting the choice of a consumer are known as psychographics. It includes analyzing the lifestyle of your consumers.
Likewise, identify the core values of your customers like do they seek affordability, quality, or sustainability. Try to understand the interests of your customers too.
Here, mention the location of your customers. Are they situated in urban, suburban, or rural areas? Additionally, look if the weather affects the demand for your product or service. If it does, then consider the weather of the particular location.
Purchasing behavior
Understand the customer behavior whether they prefer to buy things online or through physical stores. Do they think twice before buying any product or purchase it recklessly?
Additionally, consider whether your target audience sticks to a brand or switches it frequently.
Use of technology
Technographic segmentation can help companies to identify the applications and motives for purchasing. Here is how you can create technographic segments:
- Find out what technologies your customers use with surveys, web analytics, or third-party data providers.
- Identify key technographic variables (consumers' technology usage behaviors) such as hardware, software, technology stack, etc.
- Segment your audience based on essential variables such as device-based, tech savviness, usage intensity, etc.
2. Gather data from existing sources
The next step is to identify sources for gathering relevant data. Start with your internal data, which may include customer statistics such as age, gender, location, and contact numbers.
Here are some ways:
- Google Analytics: It’s an excellent tool for tracking user activities across your website including age, gender, interests, traffic sources, buying behavior, and more.
- Social media metrics: Instagram insights, Facebook insights, and others provide you with demographic information and visitor tools.
- U.S. Census Bureau: You should seek population statistics like age, gender, and race. Then search for average incomes, number of businesses, and employment figures in local communities.
3. Estimate market size and trends
Once you know the target audience, estimate the market size for your product and the number of potential customers from your target market.
You can use existing data from industry reports, market research data, and statistical resources to support your estimates.
Also, analyze the current trends affecting your target market. It includes technological advancements, economic factors, cultural shifts, or other relevant trends.
4. Discover customer needs and pain points
The next step is to specify the needs and challenges of your target audience. Getting to know what exactly your customers need helps you understand whether your product or service is fitting or not.
Some of the ways to do it are:
- Engage directly with potential customers - Engage directly with customers as it is a reliable and affordable way to know about their needs.
- Collect customer support data - Gather direct customer data from the customers who had any issue with your product or service to better understand their pain points.
- Review customer feedback - Check all the Google reviews and social media platforms for direct customer feedback to understand more about what kind of products or services are they seeking.
5. Develop customer profiles and personas
After all the research, it’s now time to create a customer profile. It includes all the characteristics of the type of audience you’re planning to target.
These personas enable businesses to understand customers more deeply. It allows businesses to tailor marketing efforts and product development to meet their needs better.
Here’s an example of a persona profile for a skincare company:
![how to write a customer analysis for a business plan person profile for a skincare company](https://bizplanr.ai/wp-content/uploads/2024/07/person-profile-for-a-skincare-company.webp)
6. Conduct competitor analysis
Identify your potential competitors and analyze how they meet their customer needs. Evaluate their strengths and weaknesses in comparison to your offerings.
Determine where your competitors stand in the market and how they segment their customer base. This will help you identify opportunities and gaps in the market.
With all the competitor research data, you can craft a marketing plan to target customers differently than competitors, helping in identifying unique selling points.
So, these were the six simple steps, and to understand it further, let’s get forward with the example.
Customer analysis example of an online sustainable clothing retail store
Target market overview
- Demographic Segmentation : Women aged 18-35; Men aged 18-35; College-educated; Students and young professionals.
- Geographic Segmentation : Urban areas in the U.S.; Major cities like New York, Los Angeles, and Chicago.
- Psychographic Segmentation : Environmentally conscious; Interested in fashion and trendy styles.
- Behavioral Segmentation : Regular online shoppers; Prefer eco-friendly products; willing to pay a premium for sustainability.
Target customer profile
Primary Target Customer:
![how to write a customer analysis for a business plan primary target customer](https://bizplanr.ai/wp-content/uploads/2024/07/primary-target-customer.webp)
Secondary Target Customer:
![how to write a customer analysis for a business plan secondary target customer](https://bizplanr.ai/wp-content/uploads/2024/07/secondary-target-customer-1.webp)
Customer needs and preferences
Customer Needs:
- High-quality, sustainable fashion products
- Easy online shopping experience
- Reliable and fast shipping options
- Transparent information about product sustainability.
Buying Preferences:
- Prefer online shopping via website and social media
- Detailed product descriptions and reviews
- Attracted to brands with strong ethical and environmental values
Market Size and Growth
Metric | Value |
---|---|
Market size | $6 billion (U.S. sustainable fashion market) |
Market growth | 10% annual growth rate |
Customer Buying Behavior
Buying Process:
- Discover through social media and online ads
- Visit the website, browse products, read reviews, compare options
- Follow the brand on social media, engage with content
Decision-Making Factors:
- Product quality and sustainability
- Brand reputation and ethical values
- Positive reviews and word-of-mouth
- Price and value for money
Competitive Landscape:
Competitor type | Examples |
---|---|
Direct competitors | Reformation, Patagonia, Everlane |
Indirect competitors | Zara, H&M (eco-friendly lines) |
This comprehensive customer analysis example will help align business strategies with customer needs, drive growth, and build a loyal customer base.
In the end, understanding and prioritizing the customer is necessary for any business's success.
Customer analysis is not merely a section in your business plan; it influences product development, marketing strategies, and overall business growth.
And we hope you can write this crucial section effectively with this article. But if you're still unsure about formatting and presentation, consider using an AI business plan generator .
This tool can help you create a comprehensive customer analysis section and complete your entire business plan within minutes.
Happy planning!
Frequently Asked Questions
What are the most important customer metrics to track?
The most important customer metrics to track include:
- Customer acquisition cost (CAC)
- Customer lifetime value (CLV)
- Customer retention rate
- Customer satisfaction score (CSAT)
- Average revenue per user (ARPU)
- Repeat purchase rate
Tracking these metrics helps you understand customer behavior, improve satisfaction, and drive business growth.
What common mistakes should be avoided in customer analysis?
Common mistakes to avoid in customer analysis include:
- Ignoring data quality : Ensure your data is accurate and up-to-date.
- Overgeneralizing customer segments : Avoid lumping diverse customers into broad categories.
- Neglecting qualitative insights : Balance quantitative data with qualitative feedback.
- Focusing solely on demographics : Consider psychographic and behavioral factors as well.
- Not updating analysis regularly : Regularly review and update your analysis to reflect current trends.
- Overlooking competitor insights : Consider how competitors influence your customers.
Avoiding these mistakes will lead to more accurate and actionable customer insights.
What are the most effective methods for collecting customer data?
The most effective methods for collecting customer data include surveys, website analytics, social media monitoring, customer feedback forms, purchase history, customer reviews, etc.
![how to write a customer analysis for a business plan how to write a customer analysis for a business plan](https://bizplanr.ai/wp-content/uploads/2024/07/word.webp)
As the founder and CEO of Upmetrics, Vinay Kevadiya has over 12 years of experience in business planning. He provides valuable insights to help entrepreneurs build and manage successful business plans.
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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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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
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2. Define segment criteria:
- Ensure that your segmentation criteria are measurable, observable, substantial, and financially justified (the effort and resources required to target and serve a particular customer segment are justified by the potential return on investment).
- Consider whether marketing messages can be tailored to each segment.
- Evaluate the size and accessibility of each segment to determine the focus.
3. Develop customer profiles and personas:
- Create detailed buyer personas that include background, demographics, communication preferences, and challenges.
- Gather qualitative data in the form of quotes to humanize the personas.
- Visualize a human behind your potential buyer rather than an abstract idea when crafting your personas.
4. Discover customer needs and pain points:
- Engage with customers through surveys, social media, and direct dialogs to understand their needs (e.g., create an open feedback loop or run Q/As on social).
- Analyze past customer actions and explore relevant online platforms like Quora, Reddit, and LinkedIn groups.
- Use social intelligence to monitor discussions and content shared within your persona groups.
5. Connect customer needs to your brand:
- Work with internal stakeholders to determine how your brand can meet the needs and solve the problems of each customer group.
- Emphasize solutions over features, focusing on making customers' lives easier.
- Apply these insights to marketing, sales, and product development to better align with customer expectations and drive business success.
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.
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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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A complete guide to successful customer analysis
If you want your business to succeed, you must understand your customers. This is where customer analysis is critical.
When companies understand their customers, they can serve their needs better. When customers’ needs are better served, they become loyal and profitable.
Knowing precisely what your customers want or what makes them tick will help you set expectations for your team and focus your efforts.
For many organizations, customer analysis is rudimentary and unfocused. Sometimes this research barely scratches the surface and focuses on unnecessary or irrelevant information. In other cases, departments operate individually, meaning customer analysis and research aren’t usable for the whole organization.
Practical customer analysis is based on detailed research , shared across an entire organization, and focused on what matters: customer pain points and goals.
What exactly is customer analysis, and why is it important?
Five steps to running successful target customer analysis, remember that customer analysis is not a one-off activity.
The customer analysis ‘s goal is to understand how customers behave and what their preferences are. It involves gathering and studying demographics, buying patterns, product usage history, spending habits, loyalty metrics, and more. This aims to understand wants, needs, pain points, and objectives.
Typically organizations that conduct customer analysis use a variety of methods to do so. These methods include analyzing first-party data (such as CRM or Marketing data), focus groups, interviews, market data, existing customer feedback, and more.
Organizations must ensure that their customer analysis strategies are accurate and up-to-date to remain competitive in today’s changing market. They should always strive to provide relevant insights by utilizing the latest technologies, such as artificial intelligence (AI) or machine learning (ML). Additionally, they should protect customer data’s privacy by assuring customers that any information shared is secure.
Here are some key reasons why you should implement customer analysis:
- It allows you to shape your strategy around the needs of your customers
- It enables you to customize and personalize your marketing and communications messaging to address customer needs better
- It helps you build lasting, meaningful, and profitable relationships with your customer base
- It enables you to receive product and/or service feedback to inform improvements
By leveraging customer analysis, organizations can build relationships with customers across channels, foster loyalty and increase long-term profitability.
1. Leverage existing customer data
Existing customers should be the starting point for your research when performing customer analysis. This data source is likely to be your CRM (Client Relationship Management) system, and segmenting it or grouping it by customer characteristics can provide invaluable insights into consumer behavior.
Typically segmentation methods may include:
- Geographic (such as city, country, regions, or territories)
- Demographic (such as age, gender, education history, or socioeconomic status)
- Behavioral (how they interact with you and your products/services)
- Consumption (related to where or how they consume media)
This type of data – zero-party data – can be compelling, offering a detailed insight into customer behavior. It is an effective way to create personalized experiences that drive loyalty, engagement, and long-term customer relationships. By understanding customer preferences through careful segmentation, businesses can deliver targeted services, increase conversion rates and retain more customers in the long run.
2. Utilize customer feedback
A simple yet often overlooked method for garnering feedback is to ask customers for reviews. Companies must understand that reviews provide valuable insights to help them better understand their customers and take appropriate action. Product or Service reviews are helpful in industries such as hospitality or e-commerce, but direct customer feedback can be incredibly beneficial for organizations in any sector.
Reviews act as the “voice of the customer,” By responding to these comments, a company can create more trust between themselves and their customers, improve customer satisfaction levels, drive advantage over competitors and even enhance their brand’s reputation.
The qualitative nature of feedback in review format is an effective way to spot any issues before they become serious problems and enables businesses to take corrective measures quickly. Moreover, engaging customers through reviews helps build relationships, leading to greater loyalty, higher purchase rates, and longer-term revenue growth.
3. Leverage your other first-party data
In addition to your CRM data, several other marketing and engagement platforms can be used to collect valuable customer data.
These may include Google Analytics, Social Media Platforms, chat tools, and contact requests.
The analytical data that can be harvested from such tools could help give you valuable insights about:
- How people found your website in the first place
- What products or services are they most interested in
- What marketing messages have they already been exposed to
- What links or call-to-actions have they clicked
Moreover, this type of data from Google Analytics can often be sliced into further segments for a more detailed level of analysis that helps companies identify areas of improvement and develop strategies for customer retention and growth.
4. Use your existing internal knowledge
Many businesses are split into various departments, and these departments often have different perspectives concerning their customers’ needs. Gathering insights about your customers from internal teams can be incredibly beneficial as it allows you to develop a comprehensive view of the customer and their requirements.
Sales teams may have more significant insights into customer needs, while marketing teams will likely understand how customers respond to different content or visual stimulus. On the other hand, Account Management and Customer Success teams might possess an even more intimate understanding of the customer’s day-to-day needs.
By leveraging all the available insights from across multiple departments, companies can capture a more rounded picture of their target audience and create better strategies to meet their customers’ needs, and deliver quality experiences that generate loyalty and growth in the long run.
5. Develop your customer personas or buyer profiles
Once you have developed a comprehensive view of your target audience and identified the customer profile types you are interested in targeting, it’s time to start thinking about customer personas. A persona is a fictionalized version of your average customer, created by gathering and analyzing all available data points. It helps bring the customer to life, capturing their motivations, desires, and needs, and provides teams with a clear understanding of who they are targeting.
Personas should be detailed enough to accurately reflect the demographic you’re dealing with and include age, gender, occupation, income, location, and interests. You may also want to note how customers usually interact with your company and how they prefer to be communicated with – e.g., by email or social media.
Further research can then be conducted on each persona – such as what makes them tick and what content they are likely to engage with – to create more innovative campaigns that appeal directly to each segment. By doing this, you can ensure maximum impact from any marketing efforts!
Customer analysis should be conducted regularly to stay ahead of the curve. Doing so will ensure that your business is always aligned with current customer preferences and demands while helping you focus your efforts where they can generate the most impactful results.
An up-to-date understanding of customers’ motivations, needs, and desires provides teams with a clear framework to develop their strategies and successfully engage their target audience. Identifying who your customer base is composed of can provide invaluable insight into how you should develop relationships with them and inform decisions about the services and content you create for them.
Ultimately, being aware of ever-changing consumer trends and applying them throughout the customer journey can increase your business’s visibility amongst prospective customers, help build trust and guarantee satisfaction from existing customers.
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How to Conduct An Effective Customer Analysis in 8 Steps
![how to write a customer analysis for a business plan customer analysis](https://userpilot.com/blog/wp-content/uploads/2023/02/How-to-Conduct-an-Effective-Customer-Analysis-in-8-Steps_bf17a6ba0839a51b3494829260b8f3e3_2000.png)
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.
![how to write a customer analysis for a business plan NPS-feedback-survey-customer-analysis](https://images.storychief.com/account_6827/NPS-feedback-survey-customer-analysis_a6a9be8419aa26012d49d2ad5e100704_800.png)
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.
![how to write a customer analysis for a business plan user-interview-slideout-postfity-customer-analysis](https://images.storychief.com/account_6827/user-interview-slideout-postfity-customer-analysis_43fb50c0e53db8706f236d988ecd4e26_800.png)
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 to write a customer analysis for a business plan product-usage-tracing-customer-analysis](https://images.storychief.com/account_6827/product-usage-tracing-customer-analysis_9184d610cc0570de064ebd9f57f5e2b4_800.png)
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?
![how to write a customer analysis for a business plan customer-reviews-customer-analysis](https://images.storychief.com/account_6827/customer-reviews-customer-analysis_9c3e9c3258f5230b20bf426317a5f5be_800.png)
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:
![how to write a customer analysis for a business plan user-persona-template-customer-analysis](https://images.storychief.com/account_6827/user-persona-template-customer-analysis_d515be89637080a909aee4b6bb197cb9_800.png)
- 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.
![how to write a customer analysis for a business plan customer journey map](https://images.storychief.com/account_6827/product-journey-mapping-real-time_personalization_6394e2c207a0453055e1c38ae43816d9_800.png)
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.
![how to write a customer analysis for a business plan custom-events-customer-analysis](https://images.storychief.com/account_6827/custom-events-customer-analysis_af0d28d4d4b87008b27b993e2f6c3d5f_800.png)
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.
![how to write a customer analysis for a business plan userpilot-chrome-extension-builder-customer-analysis](https://images.storychief.com/account_6827/userpilot-chrome-extension-builder-customer-analysis_fead053695e2fab0bebd8d63a2ecc782_800.png)
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.
![how to write a customer analysis for a business plan Semrush-customer-analysis](https://images.storychief.com/account_6827/Semrush-customer-analysis_fde63ba2be258a83204ec85c358d1b32_800.png)
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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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
![how to write a customer analysis for a business plan how to write a customer analysis for a business plan](https://peepstrategy.com/wp-content/uploads/2023/08/computer-gd530ebb9d_1920-4-1024x683.jpg)
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.
![how to write a customer analysis for a business plan how to write a customer analysis for a business plan](https://peepstrategy.com/wp-content/uploads/2023/08/online-g81c27feb0_1920-1-1024x683.jpg)
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.
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How to Write a Business Plan in 9 Steps (+ Template and Examples)
Every successful business has one thing in common, a good and well-executed business plan. A business plan is more than a document, it is a complete guide that outlines the goals your business wants to achieve, including its financial goals . It helps you analyze results, make strategic decisions, show your business operations and growth.
If you want to start a business or already have one and need to pitch it to investors for funding, writing a good business plan improves your chances of attracting financiers. As a startup, if you want to secure loans from financial institutions, part of the requirements involve submitting your business plan.
Writing a business plan does not have to be a complicated or time-consuming process. In this article, you will learn the step-by-step process for writing a successful business plan.
You will also learn what you need a business plan for, tips and strategies for writing a convincing business plan, business plan examples and templates that will save you tons of time, and the alternatives to the traditional business plan.
Let’s get started.
What Do You Need A Business Plan For?
Businesses create business plans for different purposes such as to secure funds, monitor business growth, measure your marketing strategies, and measure your business success.
1. Secure Funds
One of the primary reasons for writing a business plan is to secure funds, either from financial institutions/agencies or investors.
For you to effectively acquire funds, your business plan must contain the key elements of your business plan . For example, your business plan should include your growth plans, goals you want to achieve, and milestones you have recorded.
A business plan can also attract new business partners that are willing to contribute financially and intellectually. If you are writing a business plan to a bank, your project must show your traction , that is, the proof that you can pay back any loan borrowed.
Also, if you are writing to an investor, your plan must contain evidence that you can effectively utilize the funds you want them to invest in your business. Here, you are using your business plan to persuade a group or an individual that your business is a source of a good investment.
2. Monitor Business Growth
A business plan can help you track cash flows in your business. It steers your business to greater heights. A business plan capable of tracking business growth should contain:
- The business goals
- Methods to achieve the goals
- Time-frame for attaining those goals
A good business plan should guide you through every step in achieving your goals. It can also track the allocation of assets to every aspect of the business. You can tell when you are spending more than you should on a project.
You can compare a business plan to a written GPS. It helps you manage your business and hints at the right time to expand your business.
3. Measure Business Success
A business plan can help you measure your business success rate. Some small-scale businesses are thriving better than more prominent companies because of their track record of success.
Right from the onset of your business operation, set goals and work towards them. Write a plan to guide you through your procedures. Use your plan to measure how much you have achieved and how much is left to attain.
You can also weigh your success by monitoring the position of your brand relative to competitors. On the other hand, a business plan can also show you why you have not achieved a goal. It can tell if you have elapsed the time frame you set to attain a goal.
4. Document Your Marketing Strategies
You can use a business plan to document your marketing plans. Every business should have an effective marketing plan.
Competition mandates every business owner to go the extraordinary mile to remain relevant in the market. Your business plan should contain your marketing strategies that work. You can measure the success rate of your marketing plans.
In your business plan, your marketing strategy must answer the questions:
- How do you want to reach your target audience?
- How do you plan to retain your customers?
- What is/are your pricing plans?
- What is your budget for marketing?
![how to write a customer analysis for a business plan Business Plan Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Business-Plan-Infographic.jpg)
How to Write a Business Plan Step-by-Step
1. create your executive summary.
The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans . Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
![how to write a customer analysis for a business plan Executive Summary of the business plan](https://www.founderjar.com/wp-content/uploads/2021/07/Executive-Summary-of-the-business-plan.jpg)
Generally, there are nine sections in a business plan, the executive summary should condense essential ideas from the other eight sections.
A good executive summary should do the following:
- A Snapshot of Growth Potential. Briefly inform the reader about your company and why it will be successful)
- Contain your Mission Statement which explains what the main objective or focus of your business is.
- Product Description and Differentiation. Brief description of your products or services and why it is different from other solutions in the market.
- The Team. Basic information about your company’s leadership team and employees
- Business Concept. A solid description of what your business does.
- Target Market. The customers you plan to sell to.
- Marketing Strategy. Your plans on reaching and selling to your customers
- Current Financial State. Brief information about what revenue your business currently generates.
- Projected Financial State. Brief information about what you foresee your business revenue to be in the future.
The executive summary is the make-or-break section of your business plan. If your summary cannot in less than two pages cannot clearly describe how your business will solve a particular problem of your target audience and make a profit, your business plan is set on a faulty foundation.
Avoid using the executive summary to hype your business, instead, focus on helping the reader understand the what and how of your plan.
View the executive summary as an opportunity to introduce your vision for your company. You know your executive summary is powerful when it can answer these key questions:
- Who is your target audience?
- What sector or industry are you in?
- What are your products and services?
- What is the future of your industry?
- Is your company scaleable?
- Who are the owners and leaders of your company? What are their backgrounds and experience levels?
- What is the motivation for starting your company?
- What are the next steps?
Writing the executive summary last although it is the most important section of your business plan is an excellent idea. The reason why is because it is a high-level overview of your business plan. It is the section that determines whether potential investors and lenders will read further or not.
The executive summary can be a stand-alone document that covers everything in your business plan. It is not uncommon for investors to request only the executive summary when evaluating your business. If the information in the executive summary impresses them, they will ask for the complete business plan.
If you are writing your business plan for your planning purposes, you do not need to write the executive summary.
2. Add Your Company Overview
The company overview or description is the next section in your business plan after the executive summary. It describes what your business does.
Adding your company overview can be tricky especially when your business is still in the planning stages. Existing businesses can easily summarize their current operations but may encounter difficulties trying to explain what they plan to become.
Your company overview should contain the following:
- What products and services you will provide
- Geographical markets and locations your company have a presence
- What you need to run your business
- Who your target audience or customers are
- Who will service your customers
- Your company’s purpose, mission, and vision
- Information about your company’s founders
- Who the founders are
- Notable achievements of your company so far
When creating a company overview, you have to focus on three basics: identifying your industry, identifying your customer, and explaining the problem you solve.
If you are stuck when creating your company overview, try to answer some of these questions that pertain to you.
- Who are you targeting? (The answer is not everyone)
- What pain point does your product or service solve for your customers that they will be willing to spend money on resolving?
- How does your product or service overcome that pain point?
- Where is the location of your business?
- What products, equipment, and services do you need to run your business?
- How is your company’s product or service different from your competition in the eyes of your customers?
- How many employees do you need and what skills do you require them to have?
After answering some or all of these questions, you will get more than enough information you need to write your company overview or description section. When writing this section, describe what your company does for your customers.
![how to write a customer analysis for a business plan It describes what your business does](https://www.founderjar.com/wp-content/uploads/2021/07/Company-Description-describes-what-your-business-does.jpg)
The company description or overview section contains three elements: mission statement, history, and objectives.
- Mission Statement
The mission statement refers to the reason why your business or company is existing. It goes beyond what you do or sell, it is about the ‘why’. A good mission statement should be emotional and inspirational.
Your mission statement should follow the KISS rule (Keep It Simple, Stupid). For example, Shopify’s mission statement is “Make commerce better for everyone.”
When describing your company’s history, make it simple and avoid the temptation of tying it to a defensive narrative. Write it in the manner you would a profile. Your company’s history should include the following information:
- Founding Date
- Major Milestones
- Location(s)
- Flagship Products or Services
- Number of Employees
- Executive Leadership Roles
When you fill in this information, you use it to write one or two paragraphs about your company’s history.
Business Objectives
Your business objective must be SMART (specific, measurable, achievable, realistic, and time-bound.) Failure to clearly identify your business objectives does not inspire confidence and makes it hard for your team members to work towards a common purpose.
3. Perform Market and Competitive Analyses to Proof a Big Enough Business Opportunity
The third step in writing a business plan is the market and competitive analysis section. Every business, no matter the size, needs to perform comprehensive market and competitive analyses before it enters into a market.
Performing market and competitive analyses are critical for the success of your business. It helps you avoid entering the right market with the wrong product, or vice versa. Anyone reading your business plans, especially financiers and financial institutions will want to see proof that there is a big enough business opportunity you are targeting.
This section is where you describe the market and industry you want to operate in and show the big opportunities in the market that your business can leverage to make a profit. If you noticed any unique trends when doing your research, show them in this section.
Market analysis alone is not enough, you have to add competitive analysis to strengthen this section. There are already businesses in the industry or market, how do you plan to take a share of the market from them?
You have to clearly illustrate the competitive landscape in your business plan. Are there areas your competitors are doing well? Are there areas where they are not doing so well? Show it.
Make it clear in this section why you are moving into the industry and what weaknesses are present there that you plan to explain. How are your competitors going to react to your market entry? How do you plan to get customers? Do you plan on taking your competitors' competitors, tap into other sources for customers, or both?
Illustrate the competitive landscape as well. What are your competitors doing well and not so well?
Answering these questions and thoughts will aid your market and competitive analysis of the opportunities in your space. Depending on how sophisticated your industry is, or the expectations of your financiers, you may need to carry out a more comprehensive market and competitive analysis to prove that big business opportunity.
Instead of looking at the market and competitive analyses as one entity, separating them will make the research even more comprehensive.
Market Analysis
Market analysis, boarding speaking, refers to research a business carried out on its industry, market, and competitors. It helps businesses gain a good understanding of their target market and the outlook of their industry. Before starting a company, it is vital to carry out market research to find out if the market is viable.
![how to write a customer analysis for a business plan Market Analysis for Online Business](https://www.founderjar.com/wp-content/uploads/2021/07/Market-Analysis-for-Online-Business.jpg)
The market analysis section is a key part of the business plan. It is the section where you identify who your best clients or customers are. You cannot omit this section, without it your business plan is incomplete.
A good market analysis will tell your readers how you fit into the existing market and what makes you stand out. This section requires in-depth research, it will probably be the most time-consuming part of the business plan to write.
- Market Research
To create a compelling market analysis that will win over investors and financial institutions, you have to carry out thorough market research . Your market research should be targeted at your primary target market for your products or services. Here is what you want to find out about your target market.
- Your target market’s needs or pain points
- The existing solutions for their pain points
- Geographic Location
- Demographics
The purpose of carrying out a marketing analysis is to get all the information you need to show that you have a solid and thorough understanding of your target audience.
Only after you have fully understood the people you plan to sell your products or services to, can you evaluate correctly if your target market will be interested in your products or services.
You can easily convince interested parties to invest in your business if you can show them you thoroughly understand the market and show them that there is a market for your products or services.
How to Quantify Your Target Market
One of the goals of your marketing research is to understand who your ideal customers are and their purchasing power. To quantify your target market, you have to determine the following:
- Your Potential Customers: They are the people you plan to target. For example, if you sell accounting software for small businesses , then anyone who runs an enterprise or large business is unlikely to be your customers. Also, individuals who do not have a business will most likely not be interested in your product.
- Total Households: If you are selling household products such as heating and air conditioning systems, determining the number of total households is more important than finding out the total population in the area you want to sell to. The logic is simple, people buy the product but it is the household that uses it.
- Median Income: You need to know the median income of your target market. If you target a market that cannot afford to buy your products and services, your business will not last long.
- Income by Demographics: If your potential customers belong to a certain age group or gender, determining income levels by demographics is necessary. For example, if you sell men's clothes, your target audience is men.
What Does a Good Market Analysis Entail?
Your business does not exist on its own, it can only flourish within an industry and alongside competitors. Market analysis takes into consideration your industry, target market, and competitors. Understanding these three entities will drastically improve your company’s chances of success.
![how to write a customer analysis for a business plan Market Analysis Steps](https://www.founderjar.com/wp-content/uploads/2021/07/Market-Analysis-Steps.jpg)
You can view your market analysis as an examination of the market you want to break into and an education on the emerging trends and themes in that market. Good market analyses include the following:
- Industry Description. You find out about the history of your industry, the current and future market size, and who the largest players/companies are in your industry.
- Overview of Target Market. You research your target market and its characteristics. Who are you targeting? Note, it cannot be everyone, it has to be a specific group. You also have to find out all information possible about your customers that can help you understand how and why they make buying decisions.
- Size of Target Market: You need to know the size of your target market, how frequently they buy, and the expected quantity they buy so you do not risk overproducing and having lots of bad inventory. Researching the size of your target market will help you determine if it is big enough for sustained business or not.
- Growth Potential: Before picking a target market, you want to be sure there are lots of potential for future growth. You want to avoid going for an industry that is declining slowly or rapidly with almost zero growth potential.
- Market Share Potential: Does your business stand a good chance of taking a good share of the market?
- Market Pricing and Promotional Strategies: Your market analysis should give you an idea of the price point you can expect to charge for your products and services. Researching your target market will also give you ideas of pricing strategies you can implement to break into the market or to enjoy maximum profits.
- Potential Barriers to Entry: One of the biggest benefits of conducting market analysis is that it shows you every potential barrier to entry your business will likely encounter. It is a good idea to discuss potential barriers to entry such as changing technology. It informs readers of your business plan that you understand the market.
- Research on Competitors: You need to know the strengths and weaknesses of your competitors and how you can exploit them for the benefit of your business. Find patterns and trends among your competitors that make them successful, discover what works and what doesn’t, and see what you can do better.
The market analysis section is not just for talking about your target market, industry, and competitors. You also have to explain how your company can fill the hole you have identified in the market.
Here are some questions you can answer that can help you position your product or service in a positive light to your readers.
- Is your product or service of superior quality?
- What additional features do you offer that your competitors do not offer?
- Are you targeting a ‘new’ market?
Basically, your market analysis should include an analysis of what already exists in the market and an explanation of how your company fits into the market.
Competitive Analysis
In the competitive analysis section, y ou have to understand who your direct and indirect competitions are, and how successful they are in the marketplace. It is the section where you assess the strengths and weaknesses of your competitors, the advantage(s) they possess in the market and show the unique features or qualities that make you different from your competitors.
![how to write a customer analysis for a business plan Four Steps to Create a Competitive Marketing Analysis](https://www.founderjar.com/wp-content/uploads/2021/07/Four-Steps-to-Create-a-Competitive-Marketing-Analysis.jpg)
Many businesses do market analysis and competitive analysis together. However, to fully understand what the competitive analysis entails, it is essential to separate it from the market analysis.
Competitive analysis for your business can also include analysis on how to overcome barriers to entry in your target market.
The primary goal of conducting a competitive analysis is to distinguish your business from your competitors. A strong competitive analysis is essential if you want to convince potential funding sources to invest in your business. You have to show potential investors and lenders that your business has what it takes to compete in the marketplace successfully.
Competitive analysis will s how you what the strengths of your competition are and what they are doing to maintain that advantage.
When doing your competitive research, you first have to identify your competitor and then get all the information you can about them. The idea of spending time to identify your competitor and learn everything about them may seem daunting but it is well worth it.
Find answers to the following questions after you have identified who your competitors are.
- What are your successful competitors doing?
- Why is what they are doing working?
- Can your business do it better?
- What are the weaknesses of your successful competitors?
- What are they not doing well?
- Can your business turn its weaknesses into strengths?
- How good is your competitors’ customer service?
- Where do your competitors invest in advertising?
- What sales and pricing strategies are they using?
- What marketing strategies are they using?
- What kind of press coverage do they get?
- What are their customers saying about your competitors (both the positive and negative)?
If your competitors have a website, it is a good idea to visit their websites for more competitors’ research. Check their “About Us” page for more information.
![how to write a customer analysis for a business plan How to Perform Competitive Analysis](https://www.founderjar.com/wp-content/uploads/2021/07/How-to-Perform-Competitive-Analysis.jpg)
If you are presenting your business plan to investors, you need to clearly distinguish yourself from your competitors. Investors can easily tell when you have not properly researched your competitors.
Take time to think about what unique qualities or features set you apart from your competitors. If you do not have any direct competition offering your product to the market, it does not mean you leave out the competitor analysis section blank. Instead research on other companies that are providing a similar product, or whose product is solving the problem your product solves.
The next step is to create a table listing the top competitors you want to include in your business plan. Ensure you list your business as the last and on the right. What you just created is known as the competitor analysis table.
Direct vs Indirect Competition
You cannot know if your product or service will be a fit for your target market if you have not understood your business and the competitive landscape.
There is no market you want to target where you will not encounter competition, even if your product is innovative. Including competitive analysis in your business plan is essential.
If you are entering an established market, you need to explain how you plan to differentiate your products from the available options in the market. Also, include a list of few companies that you view as your direct competitors The competition you face in an established market is your direct competition.
In situations where you are entering a market with no direct competition, it does not mean there is no competition there. Consider your indirect competition that offers substitutes for the products or services you offer.
For example, if you sell an innovative SaaS product, let us say a project management software , a company offering time management software is your indirect competition.
There is an easy way to find out who your indirect competitors are in the absence of no direct competitors. You simply have to research how your potential customers are solving the problems that your product or service seeks to solve. That is your direct competition.
Factors that Differentiate Your Business from the Competition
There are three main factors that any business can use to differentiate itself from its competition. They are cost leadership, product differentiation, and market segmentation.
1. Cost Leadership
A strategy you can impose to maximize your profits and gain an edge over your competitors. It involves offering lower prices than what the majority of your competitors are offering.
A common practice among businesses looking to enter into a market where there are dominant players is to use free trials or pricing to attract as many customers as possible to their offer.
2. Product Differentiation
Your product or service should have a unique selling proposition (USP) that your competitors do not have or do not stress in their marketing.
Part of the marketing strategy should involve making your products unique and different from your competitors. It does not have to be different from your competitors, it can be the addition to a feature or benefit that your competitors do not currently have.
3. Market Segmentation
As a new business seeking to break into an industry, you will gain more success from focusing on a specific niche or target market, and not the whole industry.
If your competitors are focused on a general need or target market, you can differentiate yourself from them by having a small and hyper-targeted audience. For example, if your competitors are selling men’s clothes in their online stores , you can sell hoodies for men.
4. Define Your Business and Management Structure
The next step in your business plan is your business and management structure. It is the section where you describe the legal structure of your business and the team running it.
Your business is only as good as the management team that runs it, while the management team can only strive when there is a proper business and management structure in place.
If your company is a sole proprietor or a limited liability company (LLC), a general or limited partnership, or a C or an S corporation, state it clearly in this section.
Use an organizational chart to show the management structure in your business. Clearly show who is in charge of what area in your company. It is where you show how each key manager or team leader’s unique experience can contribute immensely to the success of your company. You can also opt to add the resumes and CVs of the key players in your company.
The business and management structure section should show who the owner is, and other owners of the businesses (if the business has other owners). For businesses or companies with multiple owners, include the percent ownership of the various owners and clearly show the extent of each others’ involvement in the company.
Investors want to know who is behind the company and the team running it to determine if it has the right management to achieve its set goals.
Management Team
The management team section is where you show that you have the right team in place to successfully execute the business operations and ideas. Take time to create the management structure for your business. Think about all the important roles and responsibilities that you need managers for to grow your business.
Include brief bios of each key team member and ensure you highlight only the relevant information that is needed. If your team members have background industry experience or have held top positions for other companies and achieved success while filling that role, highlight it in this section.
![how to write a customer analysis for a business plan Create Management Team For Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/Create-Management-Team-For-Business-Plan.jpg)
A common mistake that many startups make is assigning C-level titles such as (CMO and CEO) to everyone on their team. It is unrealistic for a small business to have those titles. While it may look good on paper for the ego of your team members, it can prevent investors from investing in your business.
Instead of building an unrealistic management structure that does not fit your business reality, it is best to allow business titles to grow as the business grows. Starting everyone at the top leaves no room for future change or growth, which is bad for productivity.
Your management team does not have to be complete before you start writing your business plan. You can have a complete business plan even when there are managerial positions that are empty and need filling.
If you have management gaps in your team, simply show the gaps and indicate you are searching for the right candidates for the role(s). Investors do not expect you to have a full management team when you are just starting your business.
Key Questions to Answer When Structuring Your Management Team
- Who are the key leaders?
- What experiences, skills, and educational backgrounds do you expect your key leaders to have?
- Do your key leaders have industry experience?
- What positions will they fill and what duties will they perform in those positions?
- What level of authority do the key leaders have and what are their responsibilities?
- What is the salary for the various management positions that will attract the ideal candidates?
Additional Tips for Writing the Management Structure Section
1. Avoid Adding ‘Ghost’ Names to Your Management Team
There is always that temptation to include a ‘ghost’ name to your management team to attract and influence investors to invest in your business. Although the presence of these celebrity management team members may attract the attention of investors, it can cause your business to lose any credibility if you get found out.
Seasoned investors will investigate further the members of your management team before committing fully to your business If they find out that the celebrity name used does not play any actual role in your business, they will not invest and may write you off as dishonest.
2. Focus on Credentials But Pay Extra Attention to the Roles
Investors want to know the experience that your key team members have to determine if they can successfully reach the company’s growth and financial goals.
While it is an excellent boost for your key management team to have the right credentials, you also want to pay extra attention to the roles they will play in your company.
Organizational Chart
![how to write a customer analysis for a business plan Organizational chart Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/An-organizational-chart-helps-to-identify-how-best-to-structure-your-management-team.jpg)
Adding an organizational chart in this section of your business plan is not necessary, you can do it in your business plan’s appendix.
If you are exploring funding options, it is not uncommon to get asked for your organizational chart. The function of an organizational chart goes beyond raising money, you can also use it as a useful planning tool for your business.
An organizational chart can help you identify how best to structure your management team for maximum productivity and point you towards key roles you need to fill in the future.
You can use the organizational chart to show your company’s internal management structure such as the roles and responsibilities of your management team, and relationships that exist between them.
5. Describe Your Product and Service Offering
In your business plan, you have to describe what you sell or the service you plan to offer. It is the next step after defining your business and management structure. The products and services section is where you sell the benefits of your business.
Here you have to explain how your product or service will benefit your customers and describe your product lifecycle. It is also the section where you write down your plans for intellectual property like patent filings and copyrighting.
The research and development that you are undertaking for your product or service need to be explained in detail in this section. However, do not get too technical, sell the general idea and its benefits.
If you have any diagrams or intricate designs of your product or service, do not include them in the products and services section. Instead, leave them for the addendum page. Also, if you are leaving out diagrams or designs for the addendum, ensure you add this phrase “For more detail, visit the addendum Page #.”
Your product and service section in your business plan should include the following:
- A detailed explanation that clearly shows how your product or service works.
- The pricing model for your product or service.
- Your business’ sales and distribution strategy.
- The ideal customers that want your product or service.
- The benefits of your products and services.
- Reason(s) why your product or service is a better alternative to what your competitors are currently offering in the market.
- Plans for filling the orders you receive
- If you have current or pending patents, copyrights, and trademarks for your product or service, you can also discuss them in this section.
What to Focus On When Describing the Benefits, Lifecycle, and Production Process of Your Products or Services
In the products and services section, you have to distill the benefits, lifecycle, and production process of your products and services.
When describing the benefits of your products or services, here are some key factors to focus on.
- Unique features
- Translating the unique features into benefits
- The emotional, psychological, and practical payoffs to attract customers
- Intellectual property rights or any patents
When describing the product life cycle of your products or services, here are some key factors to focus on.
- Upsells, cross-sells, and down-sells
- Time between purchases
- Plans for research and development.
When describing the production process for your products or services, you need to think about the following:
- The creation of new or existing products and services.
- The sources for the raw materials or components you need for production.
- Assembling the products
- Maintaining quality control
- Supply-chain logistics (receiving the raw materials and delivering the finished products)
- The day-to-day management of the production processes, bookkeeping, and inventory.
![](http://earnmoneybangla.online/777/templates/cheerup1/res/banner1.gif)
Tips for Writing the Products or Services Section of Your Business Plan
1. Avoid Technical Descriptions and Industry Buzzwords
The products and services section of your business plan should clearly describe the products and services that your company provides. However, it is not a section to include technical jargons that anyone outside your industry will not understand.
A good practice is to remove highly detailed or technical descriptions in favor of simple terms. Industry buzzwords are not necessary, if there are simpler terms you can use, then use them. If you plan to use your business plan to source funds, making the product or service section so technical will do you no favors.
2. Describe How Your Products or Services Differ from Your Competitors
When potential investors look at your business plan, they want to know how the products and services you are offering differ from that of your competition. Differentiating your products or services from your competition in a way that makes your solution more attractive is critical.
If you are going the innovative path and there is no market currently for your product or service, you need to describe in this section why the market needs your product or service.
For example, overnight delivery was a niche business that only a few companies were participating in. Federal Express (FedEx) had to show in its business plan that there was a large opportunity for that service and they justified why the market needed that service.
3. Long or Short Products or Services Section
Should your products or services section be short? Does the long products or services section attract more investors?
There are no straightforward answers to these questions. Whether your products or services section should be long or relatively short depends on the nature of your business.
If your business is product-focused, then automatically you need to use more space to describe the details of your products. However, if the product your business sells is a commodity item that relies on competitive pricing or other pricing strategies, you do not have to use up so much space to provide significant details about the product.
Likewise, if you are selling a commodity that is available in numerous outlets, then you do not have to spend time on writing a long products or services section.
The key to the success of your business is most likely the effectiveness of your marketing strategies compared to your competitors. Use more space to address that section.
If you are creating a new product or service that the market does not know about, your products or services section can be lengthy. The reason why is because you need to explain everything about the product or service such as the nature of the product, its use case, and values.
A short products or services section for an innovative product or service will not give the readers enough information to properly evaluate your business.
4. Describe Your Relationships with Vendors or Suppliers
Your business will rely on vendors or suppliers to supply raw materials or the components needed to make your products. In your products and services section, describe your relationships with your vendors and suppliers fully.
Avoid the mistake of relying on only one supplier or vendor. If that supplier or vendor fails to supply or goes out of business, you can easily face supply problems and struggle to meet your demands. Plan to set up multiple vendor or supplier relationships for better business stability.
5. Your Primary Goal Is to Convince Your Readers
The primary goal of your business plan is to convince your readers that your business is viable and to create a guide for your business to follow. It applies to the products and services section.
When drafting this section, think like the reader. See your reader as someone who has no idea about your products and services. You are using the products and services section to provide the needed information to help your reader understand your products and services. As a result, you have to be clear and to the point.
While you want to educate your readers about your products or services, you also do not want to bore them with lots of technical details. Show your products and services and not your fancy choice of words.
Your products and services section should provide the answer to the “what” question for your business. You and your management team may run the business, but it is your products and services that are the lifeblood of the business.
Key Questions to Answer When Writing your Products and Services Section
Answering these questions can help you write your products and services section quickly and in a way that will appeal to your readers.
- Are your products existing on the market or are they still in the development stage?
- What is your timeline for adding new products and services to the market?
- What are the positives that make your products and services different from your competitors?
- Do your products and services have any competitive advantage that your competitors’ products and services do not currently have?
- Do your products or services have any competitive disadvantages that you need to overcome to compete with your competitors? If your answer is yes, state how you plan to overcome them,
- How much does it cost to produce your products or services? How much do you plan to sell it for?
- What is the price for your products and services compared to your competitors? Is pricing an issue?
- What are your operating costs and will it be low enough for you to compete with your competitors and still take home a reasonable profit margin?
- What is your plan for acquiring your products? Are you involved in the production of your products or services?
- Are you the manufacturer and produce all the components you need to create your products? Do you assemble your products by using components supplied by other manufacturers? Do you purchase your products directly from suppliers or wholesalers?
- Do you have a steady supply of products that you need to start your business? (If your business is yet to kick-off)
- How do you plan to distribute your products or services to the market?
You can also hint at the marketing or promotion plans you have for your products or services such as how you plan to build awareness or retain customers. The next section is where you can go fully into details about your business’s marketing and sales plan.
6. Show and Explain Your Marketing and Sales Plan
Providing great products and services is wonderful, but it means nothing if you do not have a marketing and sales plan to inform your customers about them. Your marketing and sales plan is critical to the success of your business.
The sales and marketing section is where you show and offer a detailed explanation of your marketing and sales plan and how you plan to execute it. It covers your pricing plan, proposed advertising and promotion activities, activities and partnerships you need to make your business a success, and the benefits of your products and services.
There are several ways you can approach your marketing and sales strategy. Ideally, your marketing and sales strategy has to fit the unique needs of your business.
In this section, you describe how the plans your business has for attracting and retaining customers, and the exact process for making a sale happen. It is essential to thoroughly describe your complete marketing and sales plans because you are still going to reference this section when you are making financial projections for your business.
Outline Your Business’ Unique Selling Proposition (USP)
![how to write a customer analysis for a business plan Unique Selling Proposition (USP)](https://www.founderjar.com/wp-content/uploads/2021/07/Unique-Selling-Proposition-USP.jpg)
The sales and marketing section is where you outline your business’s unique selling proposition (USP). When you are developing your unique selling proposition, think about the strongest reasons why people should buy from you over your competition. That reason(s) is most likely a good fit to serve as your unique selling proposition (USP).
Target Market and Target Audience
Plans on how to get your products or services to your target market and how to get your target audience to buy them go into this section. You also highlight the strengths of your business here, particularly what sets them apart from your competition.
![how to write a customer analysis for a business plan Target Market Vs Target Audience](https://www.founderjar.com/wp-content/uploads/2021/07/Target-Market-Vs-Target-Audience.jpg)
Before you start writing your marketing and sales plan, you need to have properly defined your target audience and fleshed out your buyer persona. If you do not first understand the individual you are marketing to, your marketing and sales plan will lack any substance and easily fall.
Creating a Smart Marketing and Sales Plan
Marketing your products and services is an investment that requires you to spend money. Like any other investment, you have to generate a good return on investment (ROI) to justify using that marketing and sales plan. Good marketing and sales plans bring in high sales and profits to your company.
Avoid spending money on unproductive marketing channels. Do your research and find out the best marketing and sales plan that works best for your company.
Your marketing and sales plan can be broken into different parts: your positioning statement, pricing, promotion, packaging, advertising, public relations, content marketing, social media, and strategic alliances.
Your Positioning Statement
Your positioning statement is the first part of your marketing and sales plan. It refers to the way you present your company to your customers.
Are you the premium solution, the low-price solution, or are you the intermediary between the two extremes in the market? What do you offer that your competitors do not that can give you leverage in the market?
Before you start writing your positioning statement, you need to spend some time evaluating the current market conditions. Here are some questions that can help you to evaluate the market
- What are the unique features or benefits that you offer that your competitors lack?
- What are your customers’ primary needs and wants?
- Why should a customer choose you over your competition? How do you plan to differentiate yourself from the competition?
- How does your company’s solution compare with other solutions in the market?
After answering these questions, then you can start writing your positioning statement. Your positioning statement does not have to be in-depth or too long.
All you need to explain with your positioning statement are two focus areas. The first is the position of your company within the competitive landscape. The other focus area is the core value proposition that sets your company apart from other alternatives that your ideal customer might consider.
Here is a simple template you can use to develop a positioning statement.
For [description of target market] who [need of target market], [product or service] [how it meets the need]. Unlike [top competition], it [most essential distinguishing feature].
For example, let’s create the positioning statement for fictional accounting software and QuickBooks alternative , TBooks.
“For small business owners who need accounting services, TBooks is an accounting software that helps small businesses handle their small business bookkeeping basics quickly and easily. Unlike Wave, TBooks gives small businesses access to live sessions with top accountants.”
You can edit this positioning statement sample and fill it with your business details.
After writing your positioning statement, the next step is the pricing of your offerings. The overall positioning strategy you set in your positioning statement will often determine how you price your products or services.
Pricing is a powerful tool that sends a strong message to your customers. Failure to get your pricing strategy right can make or mar your business. If you are targeting a low-income audience, setting a premium price can result in low sales.
You can use pricing to communicate your positioning to your customers. For example, if you are offering a product at a premium price, you are sending a message to your customers that the product belongs to the premium category.
Basic Rules to Follow When Pricing Your Offering
Setting a price for your offering involves more than just putting a price tag on it. Deciding on the right pricing for your offering requires following some basic rules. They include covering your costs, primary and secondary profit center pricing, and matching the market rate.
- Covering Your Costs: The price you set for your products or service should be more than it costs you to produce and deliver them. Every business has the same goal, to make a profit. Depending on the strategy you want to use, there are exceptions to this rule. However, the vast majority of businesses follow this rule.
- Primary and Secondary Profit Center Pricing: When a company sets its price above the cost of production, it is making that product its primary profit center. A company can also decide not to make its initial price its primary profit center by selling below or at even with its production cost. It rather depends on the support product or even maintenance that is associated with the initial purchase to make its profit. The initial price thus became its secondary profit center.
- Matching the Market Rate: A good rule to follow when pricing your products or services is to match your pricing with consumer demand and expectations. If you price your products or services beyond the price your customer perceives as the ideal price range, you may end up with no customers. Pricing your products too low below what your customer perceives as the ideal price range may lead to them undervaluing your offering.
Pricing Strategy
Your pricing strategy influences the price of your offering. There are several pricing strategies available for you to choose from when examining the right pricing strategy for your business. They include cost-plus pricing, market-based pricing, value pricing, and more.
![how to write a customer analysis for a business plan Pricing strategy influences the price of offering](https://www.founderjar.com/wp-content/uploads/2021/07/Pricing-strategy-influences-the-price-of-offering.jpg)
- Cost-plus Pricing: This strategy is one of the simplest and oldest pricing strategies. Here you consider the cost of producing a unit of your product and then add a profit to it to arrive at your market price. It is an effective pricing strategy for manufacturers because it helps them cover their initial costs. Another name for the cost-plus pricing strategy is the markup pricing strategy.
- Market-based Pricing: This pricing strategy analyses the market including competitors’ pricing and then sets a price based on what the market is expecting. With this pricing strategy, you can either set your price at the low-end or high-end of the market.
- Value Pricing: This pricing strategy involves setting a price based on the value you are providing to your customer. When adopting a value-based pricing strategy, you have to set a price that your customers are willing to pay. Service-based businesses such as small business insurance providers , luxury goods sellers, and the fashion industry use this pricing strategy.
After carefully sorting out your positioning statement and pricing, the next item to look at is your promotional strategy. Your promotional strategy explains how you plan on communicating with your customers and prospects.
As a business, you must measure all your costs, including the cost of your promotions. You also want to measure how much sales your promotions bring for your business to determine its usefulness. Promotional strategies or programs that do not lead to profit need to be removed.
There are different types of promotional strategies you can adopt for your business, they include advertising, public relations, and content marketing.
Advertising
Your business plan should include your advertising plan which can be found in the marketing and sales plan section. You need to include an overview of your advertising plans such as the areas you plan to spend money on to advertise your business and offers.
Ensure that you make it clear in this section if your business will be advertising online or using the more traditional offline media, or the combination of both online and offline media. You can also include the advertising medium you want to use to raise awareness about your business and offers.
Some common online advertising mediums you can use include social media ads, landing pages, sales pages, SEO, Pay-Per-Click, emails, Google Ads, and others. Some common traditional and offline advertising mediums include word of mouth, radios, direct mail, televisions, flyers, billboards, posters, and others.
A key component of your advertising strategy is how you plan to measure the effectiveness and success of your advertising campaign. There is no point in sticking with an advertising plan or medium that does not produce results for your business in the long run.
Public Relations
A great way to reach your customers is to get the media to cover your business or product. Publicity, especially good ones, should be a part of your marketing and sales plan. In this section, show your plans for getting prominent reviews of your product from reputable publications and sources.
Your business needs that exposure to grow. If public relations is a crucial part of your promotional strategy, provide details about your public relations plan here.
Content Marketing
Content marketing is a popular promotional strategy used by businesses to inform and attract their customers. It is about teaching and educating your prospects on various topics of interest in your niche, it does not just involve informing them about the benefits and features of the products and services you have,
![how to write a customer analysis for a business plan The Benefits of Content Marketing](https://www.founderjar.com/wp-content/uploads/2021/07/The-Benefits-of-Content-Marketing.jpg)
Businesses publish content usually for free where they provide useful information, tips, and advice so that their target market can be made aware of the importance of their products and services. Content marketing strategies seek to nurture prospects into buyers over time by simply providing value.
Your company can create a blog where it will be publishing content for its target market. You will need to use the best website builder such as Wix and Squarespace and the best web hosting services such as Bluehost, Hostinger, and other Bluehost alternatives to create a functional blog or website.
If content marketing is a crucial part of your promotional strategy (as it should be), detail your plans under promotions.
Including high-quality images of the packaging of your product in your business plan is a lovely idea. You can add the images of the packaging of that product in the marketing and sales plan section. If you are not selling a product, then you do not need to include any worry about the physical packaging of your product.
When organizing the packaging section of your business plan, you can answer the following questions to make maximum use of this section.
- Is your choice of packaging consistent with your positioning strategy?
- What key value proposition does your packaging communicate? (It should reflect the key value proposition of your business)
- How does your packaging compare to that of your competitors?
Social Media
Your 21st-century business needs to have a good social media presence. Not having one is leaving out opportunities for growth and reaching out to your prospect.
You do not have to join the thousands of social media platforms out there. What you need to do is join the ones that your customers are active on and be active there.
![how to write a customer analysis for a business plan Most popular social media platforms](https://www.founderjar.com/wp-content/uploads/2021/07/Most-popular-social-media-platforms.jpg)
Businesses use social media to provide information about their products such as promotions, discounts, the benefits of their products, and content on their blogs.
Social media is also a platform for engaging with your customers and getting feedback about your products or services. Make no mistake, more and more of your prospects are using social media channels to find more information about companies.
You need to consider the social media channels you want to prioritize your business (prioritize the ones your customers are active in) and your branding plans in this section.
![how to write a customer analysis for a business plan Choosing the right social media platform](https://www.founderjar.com/wp-content/uploads/2021/07/Choosing-the-right-social-media-platform.jpg)
Strategic Alliances
If your company plans to work closely with other companies as part of your sales and marketing plan, include it in this section. Prove details about those partnerships in your business plan if you have already established them.
Strategic alliances can be beneficial for all parties involved including your company. Working closely with another company in the form of a partnership can provide access to a different target market segment for your company.
The company you are partnering with may also gain access to your target market or simply offer a new product or service (that of your company) to its customers.
Mutually beneficial partnerships can cover the weaknesses of one company with the strength of another. You should consider strategic alliances with companies that sell complimentary products to yours. For example, if you provide printers, you can partner with a company that produces ink since the customers that buy printers from you will also need inks for printing.
Steps Involved in Creating a Marketing and Sales Plan
1. Focus on Your Target Market
Identify who your customers are, the market you want to target. Then determine the best ways to get your products or services to your potential customers.
2. Evaluate Your Competition
One of the goals of having a marketing plan is to distinguish yourself from your competition. You cannot stand out from them without first knowing them in and out.
You can know your competitors by gathering information about their products, pricing, service, and advertising campaigns.
These questions can help you know your competition.
- What makes your competition successful?
- What are their weaknesses?
- What are customers saying about your competition?
3. Consider Your Brand
Customers' perception of your brand has a strong impact on your sales. Your marketing and sales plan should seek to bolster the image of your brand. Before you start marketing your business, think about the message you want to pass across about your business and your products and services.
4. Focus on Benefits
The majority of your customers do not view your product in terms of features, what they want to know is the benefits and solutions your product offers. Think about the problems your product solves and the benefits it delivers, and use it to create the right sales and marketing message.
Your marketing plan should focus on what you want your customer to get instead of what you provide. Identify those benefits in your marketing and sales plan.
5. Focus on Differentiation
Your marketing and sales plan should look for a unique angle they can take that differentiates your business from the competition, even if the products offered are similar. Some good areas of differentiation you can use are your benefits, pricing, and features.
Key Questions to Answer When Writing Your Marketing and Sales Plan
- What is your company’s budget for sales and marketing campaigns?
- What key metrics will you use to determine if your marketing plans are successful?
- What are your alternatives if your initial marketing efforts do not succeed?
- Who are the sales representatives you need to promote your products or services?
- What are the marketing and sales channels you plan to use? How do you plan to get your products in front of your ideal customers?
- Where will you sell your products?
You may want to include samples of marketing materials you plan to use such as print ads, website descriptions, and social media ads. While it is not compulsory to include these samples, it can help you better communicate your marketing and sales plan and objectives.
The purpose of the marketing and sales section is to answer this question “How will you reach your customers?” If you cannot convincingly provide an answer to this question, you need to rework your marketing and sales section.
7. Clearly Show Your Funding Request
If you are writing your business plan to ask for funding from investors or financial institutions, the funding request section is where you will outline your funding requirements. The funding request section should answer the question ‘How much money will your business need in the near future (3 to 5 years)?’
A good funding request section will clearly outline and explain the amount of funding your business needs over the next five years. You need to know the amount of money your business needs to make an accurate funding request.
Also, when writing your funding request, provide details of how the funds will be used over the period. Specify if you want to use the funds to buy raw materials or machinery, pay salaries, pay for advertisements, and cover specific bills such as rent and electricity.
In addition to explaining what you want to use the funds requested for, you need to clearly state the projected return on investment (ROI) . Investors and creditors want to know if your business can generate profit for them if they put funds into it.
Ensure you do not inflate the figures and stay as realistic as possible. Investors and financial institutions you are seeking funds from will do their research before investing money in your business.
If you are not sure of an exact number to request from, you can use some range of numbers as rough estimates. Add a best-case scenario and a work-case scenario to your funding request. Also, include a description of your strategic future financial plans such as selling your business or paying off debts.
Funding Request: Debt or Equity?
When making your funding request, specify the type of funding you want. Do you want debt or equity? Draw out the terms that will be applicable for the funding, and the length of time the funding request will cover.
Case for Equity
If your new business has not yet started generating profits, you are most likely preparing to sell equity in your business to raise capital at the early stage. Equity here refers to ownership. In this case, you are selling a portion of your company to raise capital.
Although this method of raising capital for your business does not put your business in debt, keep in mind that an equity owner may expect to play a key role in company decisions even if he does not hold a major stake in the company.
Most equity sales for startups are usually private transactions . If you are making a funding request by offering equity in exchange for funding, let the investor know that they will be paid a dividend (a share of the company’s profit). Also, let the investor know the process for selling their equity in your business.
Case for Debt
You may decide not to offer equity in exchange for funds, instead, you make a funding request with the promise to pay back the money borrowed at the agreed time frame.
When making a funding request with an agreement to pay back, note that you will have to repay your creditors both the principal amount borrowed and the interest on it. Financial institutions offer this type of funding for businesses.
Large companies combine both equity and debt in their capital structure. When drafting your business plan, decide if you want to offer both or one over the other.
Before you sell equity in exchange for funding in your business, consider if you are willing to accept not being in total control of your business. Also, before you seek loans in your funding request section, ensure that the terms of repayment are favorable.
You should set a clear timeline in your funding request so that potential investors and creditors can know what you are expecting. Some investors and creditors may agree to your funding request and then delay payment for longer than 30 days, meanwhile, your business needs an immediate cash injection to operate efficiently.
Additional Tips for Writing the Funding Request Section of your Business Plan
The funding request section is not necessary for every business, it is only needed by businesses who plan to use their business plan to secure funding.
If you are adding the funding request section to your business plan, provide an itemized summary of how you plan to use the funds requested. Hiring a lawyer, accountant, or other professionals may be necessary for the proper development of this section.
You should also gather and use financial statements that add credibility and support to your funding requests. Ensure that the financial statements you use should include your projected financial data such as projected cash flows, forecast statements, and expenditure budgets.
If you are an existing business, include all historical financial statements such as cash flow statements, balance sheets and income statements .
Provide monthly and quarterly financial statements for a year. If your business has records that date back beyond the one-year mark, add the yearly statements of those years. These documents are for the appendix section of your business plan.
8. Detail Your Financial Plan, Metrics, and Projections
If you used the funding request section in your business plan, supplement it with a financial plan, metrics, and projections. This section paints a picture of the past performance of your business and then goes ahead to make an informed projection about its future.
The goal of this section is to convince readers that your business is going to be a financial success. It outlines your business plan to generate enough profit to repay the loan (with interest if applicable) and to generate a decent return on investment for investors.
If you have an existing business already in operation, use this section to demonstrate stability through finance. This section should include your cash flow statements, balance sheets, and income statements covering the last three to five years. If your business has some acceptable collateral that you can use to acquire loans, list it in the financial plan, metrics, and projection section.
Apart from current financial statements, this section should also contain a prospective financial outlook that spans the next five years. Include forecasted income statements, cash flow statements, balance sheets, and capital expenditure budget.
If your business is new and is not yet generating profit, use clear and realistic projections to show the potentials of your business.
When drafting this section, research industry norms and the performance of comparable businesses. Your financial projections should cover at least five years. State the logic behind your financial projections. Remember you can always make adjustments to this section as the variables change.
The financial plan, metrics, and projection section create a baseline which your business can either exceed or fail to reach. If your business fails to reach your projections in this section, you need to understand why it failed.
Investors and loan managers spend a lot of time going through the financial plan, metrics, and projection section compared to other parts of the business plan. Ensure you spend time creating credible financial analyses for your business in this section.
Many entrepreneurs find this section daunting to write. You do not need a business degree to create a solid financial forecast for your business. Business finances, especially for startups, are not as complicated as they seem. There are several online tools and templates that make writing this section so much easier.
Use Graphs and Charts
The financial plan, metrics, and projection section is a great place to use graphs and charts to tell the financial story of your business. Charts and images make it easier to communicate your finances.
Accuracy in this section is key, ensure you carefully analyze your past financial statements properly before making financial projects.
Address the Risk Factors and Show Realistic Financial Projections
Keep your financial plan, metrics, and projection realistic. It is okay to be optimistic in your financial projection, however, you have to justify it.
You should also address the various risk factors associated with your business in this section. Investors want to know the potential risks involved, show them. You should also show your plans for mitigating those risks.
What You Should In The Financial Plan, Metrics, and Projection Section of Your Business Plan
The financial plan, metrics, and projection section of your business plan should have monthly sales and revenue forecasts for the first year. It should also include annual projections that cover 3 to 5 years.
A three-year projection is a basic requirement to have in your business plan. However, some investors may request a five-year forecast.
Your business plan should include the following financial statements: sales forecast, personnel plan, income statement, income statement, cash flow statement, balance sheet, and an exit strategy.
1. Sales Forecast
Sales forecast refers to your projections about the number of sales your business is going to record over the next few years. It is typically broken into several rows, with each row assigned to a core product or service that your business is offering.
One common mistake people make in their business plan is to break down the sales forecast section into long details. A sales forecast should forecast the high-level details.
For example, if you are forecasting sales for a payroll software provider, you could break down your forecast into target market segments or subscription categories.
![how to write a customer analysis for a business plan Benefits of Sales Forecasting](https://www.founderjar.com/wp-content/uploads/2021/07/Benefits-of-Sales-Forecasting.jpg)
Your sales forecast section should also have a corresponding row for each sales row to cover the direct cost or Cost of Goods Sold (COGS). The objective of these rows is to show the expenses that your business incurs in making and delivering your product or service.
Note that your Cost of Goods Sold (COGS) should only cover those direct costs incurred when making your products. Other indirect expenses such as insurance, salaries, payroll tax, and rent should not be included.
For example, the Cost of Goods Sold (COGS) for a restaurant is the cost of ingredients while for a consulting company it will be the cost of paper and other presentation materials.
![how to write a customer analysis for a business plan Factors that affect sales forecasting](https://www.founderjar.com/wp-content/uploads/2021/07/Factors-that-affect-sales-forecasting.jpg)
2. Personnel Plan
The personnel plan section is where you provide details about the payment plan for your employees. For a small business, you can easily list every position in your company and how much you plan to pay in the personnel plan.
However, for larger businesses, you have to break the personnel plan into functional groups such as sales and marketing.
The personnel plan will also include the cost of an employee beyond salary, commonly referred to as the employee burden. These costs include insurance, payroll taxes , and other essential costs incurred monthly as a result of having employees on your payroll.
![how to write a customer analysis for a business plan True HR Cost Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/True-HR-Cost.jpg)
3. Income Statement
The income statement section shows if your business is making a profit or taking a loss. Another name for the income statement is the profit and loss (P&L). It takes data from your sales forecast and personnel plan and adds other ongoing expenses you incur while running your business.
![how to write a customer analysis for a business plan The income statement section](https://www.founderjar.com/wp-content/uploads/2021/07/The-income-statement-section.jpg)
Every business plan should have an income statement. It subtracts your business expenses from its earnings to show if your business is generating profit or incurring losses.
The income statement has the following items: sales, Cost of Goods Sold (COGS), gross margin, operating expenses, total operating expenses, operating income , total expenses, and net profit.
- Sales refer to the revenue your business generates from selling its products or services. Other names for sales are income or revenue.
- Cost of Goods Sold (COGS) refers to the total cost of selling your products. Other names for COGS are direct costs or cost of sales. Manufacturing businesses use the Costs of Goods Manufactured (COGM) .
- Gross Margin is the figure you get when you subtract your COGS from your sales. In your income statement, you can express it as a percentage of total sales (Gross margin / Sales = Gross Margin Percent).
- Operating Expenses refer to all the expenses you incur from running your business. It exempts the COGS because it stands alone as a core part of your income statement. You also have to exclude taxes, depreciation, and amortization. Your operating expenses include salaries, marketing expenses, research and development (R&D) expenses, and other expenses.
- Total Operating Expenses refers to the sum of all your operating expenses including those exemptions named above under operating expenses.
- Operating Income refers to earnings before interest, taxes, depreciation, and amortization. It is simply known as the acronym EBITDA (earnings before interest, taxes, depreciation, and amortization). Calculating your operating income is simple, all you need to do is to subtract your COGS and total operating expenses from your sales.
- Total Expenses refer to the sum of your operating expenses and your business’ interest, taxes, depreciation, and amortization.
- Net profit shows whether your business has made a profit or taken a loss during a given timeframe.
4. Cash Flow Statement
The cash flow statement tracks the money you have in the bank at any given point. It is often confused with the income statement or the profit and loss statement. They are both different types of financial statements. The income statement calculates your profits and losses while the cash flow statement shows you how much you have in the bank.
![how to write a customer analysis for a business plan Cash Flow Statement Example](https://www.founderjar.com/wp-content/uploads/2021/07/Cash-Flow-Statement-Example.jpg)
5. Balance Sheet
The balance sheet is a financial statement that provides an overview of the financial health of your business. It contains information about the assets and liabilities of your company, and owner’s or shareholders’ equity.
You can get the net worth of your company by subtracting your company’s liabilities from its assets.
![how to write a customer analysis for a business plan Balance sheet Formula](https://www.founderjar.com/wp-content/uploads/2021/07/Balance-sheet-Formula.jpg)
6. Exit Strategy
The exit strategy refers to a probable plan for selling your business either to the public in an IPO or to another company. It is the last thing you include in the financial plan, metrics, and projection section.
You can choose to omit the exit strategy from your business plan if you plan to maintain full ownership of your business and do not plan on seeking angel investment or virtual capitalist (VC) funding.
Investors may want to know what your exit plan is. They invest in your business to get a good return on investment.
Your exit strategy does not have to include long and boring details. Ensure you identify some interested parties who may be interested in buying the company if it becomes a success.
![how to write a customer analysis for a business plan Exit Strategy Section of Business Plan Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Exit-Strategy-Section-of-Business-Plan-Infographic.jpg)
Key Questions to Answer with Your Financial Plan, Metrics, and Projection
Your financial plan, metrics, and projection section helps investors, creditors, or your internal managers to understand what your expenses are, the amount of cash you need, and what it takes to make your company profitable. It also shows what you will be doing with any funding.
You do not need to show actual financial data if you do not have one. Adding forecasts and projections to your financial statements is added proof that your strategy is feasible and shows investors you have planned properly.
Here are some key questions to answer to help you develop this section.
- What is your sales forecast for the next year?
- When will your company achieve a positive cash flow?
- What are the core expenses you need to operate?
- How much money do you need upfront to operate or grow your company?
- How will you use the loans or investments?
9. Add an Appendix to Your Business Plan
Adding an appendix to your business plan is optional. It is a useful place to put any charts, tables, legal notes, definitions, permits, résumés, and other critical information that do not fit into other sections of your business plan.
The appendix section is where you would want to include details of a patent or patent-pending if you have one. You can always add illustrations or images of your products here. It is the last section of your business plan.
When writing your business plan, there are details you cut short or remove to prevent the entire section from becoming too lengthy. There are also details you want to include in the business plan but are not a good fit for any of the previous sections. You can add that additional information to the appendix section.
Businesses also use the appendix section to include supporting documents or other materials specially requested by investors or lenders.
You can include just about any information that supports the assumptions and statements you made in the business plan under the appendix. It is the one place in the business plan where unrelated data and information can coexist amicably.
If your appendix section is lengthy, try organizing it by adding a table of contents at the beginning of the appendix section. It is also advisable to group similar information to make it easier for the reader to access them.
A well-organized appendix section makes it easier to share your information clearly and concisely. Add footnotes throughout the rest of the business plan or make references in the plan to the documents in the appendix.
The appendix section is usually only necessary if you are seeking funding from investors or lenders, or hoping to attract partners.
People reading business plans do not want to spend time going through a heap of backup information, numbers, and charts. Keep these documents or information in the Appendix section in case the reader wants to dig deeper.
Common Items to Include in the Appendix Section of Your Business Plan
The appendix section includes documents that supplement or support the information or claims given in other sections of the business plans. Common items you can include in the appendix section include:
- Additional data about the process of manufacturing or creation
- Additional description of products or services such as product schematics
- Additional financial documents or projections
- Articles of incorporation and status
- Backup for market research or competitive analysis
- Bank statements
- Business registries
- Client testimonials (if your business is already running)
- Copies of insurances
- Credit histories (personal or/and business)
- Deeds and permits
- Equipment leases
- Examples of marketing and advertising collateral
- Industry associations and memberships
- Images of product
- Intellectual property
- Key customer contracts
- Legal documents and other contracts
- Letters of reference
- Links to references
- Market research data
- Organizational charts
- Photographs of potential facilities
- Professional licenses pertaining to your legal structure or type of business
- Purchase orders
- Resumes of the founder(s) and key managers
- State and federal identification numbers or codes
- Trademarks or patents’ registrations
Avoid using the appendix section as a place to dump any document or information you feel like adding. Only add documents or information that you support or increase the credibility of your business plan.
Tips and Strategies for Writing a Convincing Business Plan
To achieve a perfect business plan, you need to consider some key tips and strategies. These tips will raise the efficiency of your business plan above average.
1. Know Your Audience
When writing a business plan, you need to know your audience . Business owners write business plans for different reasons. Your business plan has to be specific. For example, you can write business plans to potential investors, banks, and even fellow board members of the company.
The audience you are writing to determines the structure of the business plan. As a business owner, you have to know your audience. Not everyone will be your audience. Knowing your audience will help you to narrow the scope of your business plan.
Consider what your audience wants to see in your projects, the likely questions they might ask, and what interests them.
- A business plan used to address a company's board members will center on its employment schemes, internal affairs, projects, stakeholders, etc.
- A business plan for financial institutions will talk about the size of your market and the chances for you to pay back any loans you demand.
- A business plan for investors will show proof that you can return the investment capital within a specific time. In addition, it discusses your financial projections, tractions, and market size.
2. Get Inspiration from People
Writing a business plan from scratch as an entrepreneur can be daunting. That is why you need the right inspiration to push you to write one. You can gain inspiration from the successful business plans of other businesses. Look at their business plans, the style they use, the structure of the project, etc.
To make your business plan easier to create, search companies related to your business to get an exact copy of what you need to create an effective business plan. You can also make references while citing examples in your business plans.
When drafting your business plan, get as much help from others as you possibly can. By getting inspiration from people, you can create something better than what they have.
3. Avoid Being Over Optimistic
Many business owners make use of strong adjectives to qualify their content. One of the big mistakes entrepreneurs make when preparing a business plan is promising too much.
The use of superlatives and over-optimistic claims can prepare the audience for more than you can offer. In the end, you disappoint the confidence they have in you.
In most cases, the best option is to be realistic with your claims and statistics. Most of the investors can sense a bit of incompetency from the overuse of superlatives. As a new entrepreneur, do not be tempted to over-promise to get the interests of investors.
The concept of entrepreneurship centers on risks, nothing is certain when you make future analyses. What separates the best is the ability to do careful research and work towards achieving that, not promising more than you can achieve.
To make an excellent first impression as an entrepreneur, replace superlatives with compelling data-driven content. In this way, you are more specific than someone promising a huge ROI from an investment.
4. Keep it Simple and Short
When writing business plans, ensure you keep them simple throughout. Irrespective of the purpose of the business plan, your goal is to convince the audience.
One way to achieve this goal is to make them understand your proposal. Therefore, it would be best if you avoid the use of complex grammar to express yourself. It would be a huge turn-off if the people you want to convince are not familiar with your use of words.
Another thing to note is the length of your business plan. It would be best if you made it as brief as possible.
You hardly see investors or agencies that read through an extremely long document. In that case, if your first few pages can’t convince them, then you have lost it. The more pages you write, the higher the chances of you derailing from the essential contents.
To ensure your business plan has a high conversion rate, you need to dispose of every unnecessary information. For example, if you have a strategy that you are not sure of, it would be best to leave it out of the plan.
5. Make an Outline and Follow Through
A perfect business plan must have touched every part needed to convince the audience. Business owners get easily tempted to concentrate more on their products than on other sections. Doing this can be detrimental to the efficiency of the business plan.
For example, imagine you talking about a product but omitting or providing very little information about the target audience. You will leave your clients confused.
To ensure that your business plan communicates your full business model to readers, you have to input all the necessary information in it. One of the best ways to achieve this is to design a structure and stick to it.
This structure is what guides you throughout the writing. To make your work easier, you can assign an estimated word count or page limit to every section to avoid making it too bulky for easy reading. As a guide, the necessary things your business plan must contain are:
- Table of contents
- Introduction
- Product or service description
- Target audience
- Market size
- Competition analysis
- Financial projections
Some specific businesses can include some other essential sections, but these are the key sections that must be in every business plan.
6. Ask a Professional to Proofread
When writing a business plan, you must tie all loose ends to get a perfect result. When you are done with writing, call a professional to go through the document for you. You are bound to make mistakes, and the way to correct them is to get external help.
You should get a professional in your field who can relate to every section of your business plan. It would be easier for the professional to notice the inner flaws in the document than an editor with no knowledge of your business.
In addition to getting a professional to proofread, get an editor to proofread and edit your document. The editor will help you identify grammatical errors, spelling mistakes, and inappropriate writing styles.
Writing a business plan can be daunting, but you can surmount that obstacle and get the best out of it with these tips.
Business Plan Examples and Templates That’ll Save You Tons of Time
1. hubspot's one-page business plan.
![how to write a customer analysis for a business plan HubSpot's One Page Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/HubSpots-One-Page-Business-Plan.jpg)
The one-page business plan template by HubSpot is the perfect guide for businesses of any size, irrespective of their business strategy. Although the template is condensed into a page, your final business plan should not be a page long! The template is designed to ask helpful questions that can help you develop your business plan.
Hubspot’s one-page business plan template is divided into nine fields:
- Business opportunity
- Company description
- Industry analysis
- Target market
- Implementation timeline
- Marketing plan
- Financial summary
- Funding required
2. Bplan’s Free Business Plan Template
![how to write a customer analysis for a business plan Bplan’s Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/Bplans-Free-Business-Plan-Template.jpg)
Bplans' free business plan template is investor-approved. It is a rich template used by prestigious educational institutions such as Babson College and Princeton University to teach entrepreneurs how to create a business plan.
The template has six sections: the executive summary, opportunity, execution, company, financial plan, and appendix. There is a step-by-step guide for writing every little detail in the business plan. Follow the instructions each step of the way and you will create a business plan that impresses investors or lenders easily.
3. HubSpot's Downloadable Business Plan Template
![how to write a customer analysis for a business plan HubSpot's Downloadable Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/HubSpots-Downloadable-Business-Plan-Template.jpg)
HubSpot’s downloadable business plan template is a more comprehensive option compared to the one-page business template by HubSpot. This free and downloadable business plan template is designed for entrepreneurs.
The template is a comprehensive guide and checklist for business owners just starting their businesses. It tells you everything you need to fill in each section of the business plan and how to do it.
There are nine sections in this business plan template: an executive summary, company and business description, product and services line, market analysis, marketing plan, sales plan, legal notes, financial considerations, and appendix.
4. Business Plan by My Own Business Institute
![how to write a customer analysis for a business plan The Business Profile](https://www.founderjar.com/wp-content/uploads/2021/07/The-Business-Profile.jpg)
My Own Business Institute (MOBI) which is a part of Santa Clara University's Center for Innovation and Entrepreneurship offers a free business plan template. You can either copy the free business template from the link provided above or download it as a Word document.
The comprehensive template consists of a whopping 15 sections.
- The Business Profile
- The Vision and the People
- Home-Based Business and Freelance Business Opportunities
- Organization
- Licenses and Permits
- Business Insurance
- Communication Tools
- Acquisitions
- Location and Leasing
- Accounting and Cash Flow
- Opening and Marketing
- Managing Employees
- Expanding and Handling Problems
There are lots of helpful tips on how to fill each section in the free business plan template by MOBI.
5. Score's Business Plan Template for Startups
![how to write a customer analysis for a business plan Score's Business Plan Template for Startups](https://www.founderjar.com/wp-content/uploads/2021/07/Scores-Business-Plan-Template-for-Startups.jpg)
Score is an American nonprofit organization that helps entrepreneurs build successful companies. This business plan template for startups by Score is available for free download. The business plan template asks a whooping 150 generic questions that help entrepreneurs from different fields to set up the perfect business plan.
The business plan template for startups contains clear instructions and worksheets, all you have to do is answer the questions and fill the worksheets.
There are nine sections in the business plan template: executive summary, company description, products and services, marketing plan, operational plan, management and organization, startup expenses and capitalization, financial plan, and appendices.
The ‘refining the plan’ resource contains instructions that help you modify your business plan to suit your specific needs, industry, and target audience. After you have completed Score’s business plan template, you can work with a SCORE mentor for expert advice in business planning.
6. Minimalist Architecture Business Plan Template by Venngage
![how to write a customer analysis for a business plan Minimalist Architecture Business Plan Template by Venngage](https://www.founderjar.com/wp-content/uploads/2021/07/Minimalist-Architecture-Business-Plan-Template-by-Venngage.jpg)
The minimalist architecture business plan template is a simple template by Venngage that you can customize to suit your business needs .
There are five sections in the template: an executive summary, statement of problem, approach and methodology, qualifications, and schedule and benchmark. The business plan template has instructions that guide users on what to fill in each section.
7. Small Business Administration Free Business Plan Template
![how to write a customer analysis for a business plan Small Business Administration Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/Small-Business-Administration-Free-Business-Plan-Template.jpg)
The Small Business Administration (SBA) offers two free business plan templates, filled with practical real-life examples that you can model to create your business plan. Both free business plan templates are written by fictional business owners: Rebecca who owns a consulting firm, and Andrew who owns a toy company.
There are five sections in the two SBA’s free business plan templates.
- Executive Summary
- Company Description
- Service Line
- Marketing and Sales
8. The $100 Startup's One-Page Business Plan
![how to write a customer analysis for a business plan The $100 Startup's One Page Business Plan](https://www.founderjar.com/wp-content/uploads/2021/07/The-100-Startups-One-Page-Business-Plan.jpg)
The one-page business plan by the $100 startup is a simple business plan template for entrepreneurs who do not want to create a long and complicated plan . You can include more details in the appendices for funders who want more information beyond what you can put in the one-page business plan.
There are five sections in the one-page business plan such as overview, ka-ching, hustling, success, and obstacles or challenges or open questions. You can answer all the questions using one or two sentences.
9. PandaDoc’s Free Business Plan Template
![how to write a customer analysis for a business plan PandaDoc’s Free Business Plan Template](https://www.founderjar.com/wp-content/uploads/2021/07/PandaDocs-Free-Business-Plan-Template.jpg)
The free business plan template by PandaDoc is a comprehensive 15-page document that describes the information you should include in every section.
There are 11 sections in PandaDoc’s free business plan template.
- Executive summary
- Business description
- Products and services
- Operations plan
- Management organization
- Financial plan
- Conclusion / Call to action
- Confidentiality statement
You have to sign up for its 14-day free trial to access the template. You will find different business plan templates on PandaDoc once you sign up (including templates for general businesses and specific businesses such as bakeries, startups, restaurants, salons, hotels, and coffee shops)
PandaDoc allows you to customize its business plan templates to fit the needs of your business. After editing the template, you can send it to interested parties and track opens and views through PandaDoc.
10. Invoiceberry Templates for Word, Open Office, Excel, or PPT
![how to write a customer analysis for a business plan Invoiceberry Templates Business Concept](https://www.founderjar.com/wp-content/uploads/2021/07/Invoiceberry-Templates-Business-Concept.jpg)
InvoiceBerry is a U.K based online invoicing and tracking platform that offers free business plan templates in .docx, .odt, .xlsx, and .pptx formats for freelancers and small businesses.
Before you can download the free business plan template, it will ask you to give it your email address. After you complete the little task, it will send the download link to your inbox for you to download. It also provides a business plan checklist in .xlsx file format that ensures you add the right information to the business plan.
Alternatives to the Traditional Business Plan
A business plan is very important in mapping out how one expects their business to grow over a set number of years, particularly when they need external investment in their business. However, many investors do not have the time to watch you present your business plan. It is a long and boring read.
Luckily, there are three alternatives to the traditional business plan (the Business Model Canvas, Lean Canvas, and Startup Pitch Deck). These alternatives are less laborious and easier and quicker to present to investors.
Business Model Canvas (BMC)
The business model canvas is a business tool used to present all the important components of setting up a business, such as customers, route to market, value proposition, and finance in a single sheet. It provides a very focused blueprint that defines your business initially which you can later expand on if needed.
![how to write a customer analysis for a business plan Business Model Canvas (BMC) Infographic](https://www.founderjar.com/wp-content/uploads/2021/07/Business-Model-Canvas-BMC.jpg)
The sheet is divided mainly into company, industry, and consumer models that are interconnected in how they find problems and proffer solutions.
Segments of the Business Model Canvas
The business model canvas was developed by founder Alexander Osterwalder to answer important business questions. It contains nine segments.
![how to write a customer analysis for a business plan Segments of the Business Model Canvas](https://www.founderjar.com/wp-content/uploads/2021/07/Segments-of-the-Business-Model-Canvas.jpg)
- Key Partners: Who will be occupying important executive positions in your business? What do they bring to the table? Will there be a third party involved with the company?
- Key Activities: What important activities will production entail? What activities will be carried out to ensure the smooth running of the company?
- The Product’s Value Propositions: What does your product do? How will it be different from other products?
- Customer Segments: What demography of consumers are you targeting? What are the habits of these consumers? Who are the MVPs of your target consumers?
- Customer Relationships: How will the team support and work with its customer base? How do you intend to build and maintain trust with the customer?
- Key Resources: What type of personnel and tools will be needed? What size of the budget will they need access to?
- Channels: How do you plan to create awareness of your products? How do you intend to transport your product to the customer?
- Cost Structure: What is the estimated cost of production? How much will distribution cost?
- Revenue Streams: For what value are customers willing to pay? How do they prefer to pay for the product? Are there any external revenues attached apart from the main source? How do the revenue streams contribute to the overall revenue?
Lean Canvas
The lean canvas is a problem-oriented alternative to the standard business model canvas. It was proposed by Ash Maurya, creator of Lean Stack as a development of the business model generation. It uses a more problem-focused approach and it majorly targets entrepreneurs and startup businesses.
![how to write a customer analysis for a business plan The lean canvas is a problem oriented alternative to the standard business model canvas](https://www.founderjar.com/wp-content/uploads/2021/07/The-lean-canvas-is-a-problem-oriented-alternative-to-the-standard-business-model-canvas.jpg)
Lean Canvas uses the same 9 blocks concept as the business model canvas, however, they have been modified slightly to suit the needs and purpose of a small startup. The key partners, key activities, customer relationships, and key resources are replaced by new segments which are:
- Problem: Simple and straightforward number of problems you have identified, ideally three.
- Solution: The solutions to each problem.
- Unfair Advantage: Something you possess that can't be easily bought or replicated.
- Key Metrics: Important numbers that will tell how your business is doing.
Startup Pitch Deck
While the business model canvas compresses into a factual sheet, startup pitch decks expand flamboyantly.
Pitch decks, through slides, convey your business plan, often through graphs and images used to emphasize estimations and observations in your presentation. Entrepreneurs often use pitch decks to fully convince their target audience of their plans before discussing funding arrangements.
![how to write a customer analysis for a business plan Startup Pitch Deck Presentation](https://www.founderjar.com/wp-content/uploads/2021/07/Startup-Pitch-Deck-Presentation.jpg)
Considering the likelihood of it being used in a small time frame, a good startup pitch deck should ideally contain 20 slides or less to have enough time to answer questions from the audience.
Unlike the standard and lean business model canvases, a pitch deck doesn't have a set template on how to present your business plan but there are still important components to it. These components often mirror those of the business model canvas except that they are in slide form and contain more details.
![how to write a customer analysis for a business plan Airbnb Pitch Deck](https://www.founderjar.com/wp-content/uploads/2021/07/Airbnb-Pitch-Deck.jpg)
Using Airbnb (one of the most successful start-ups in recent history) for reference, the important components of a good slide are listed below.
- Cover/Introduction Slide: Here, you should include your company's name and mission statement. Your mission statement should be a very catchy tagline. Also, include personal information and contact details to provide an easy link for potential investors.
- Problem Slide: This slide requires you to create a connection with the audience or the investor that you are pitching. For example in their pitch, Airbnb summarized the most important problems it would solve in three brief points – pricing of hotels, disconnection from city culture, and connection problems for local bookings.
- Solution Slide: This slide includes your core value proposition. List simple and direct solutions to the problems you have mentioned
- Customer Analysis: Here you will provide information on the customers you will be offering your service to. The identity of your customers plays an important part in fundraising as well as the long-run viability of the business.
- Market Validation: Use competitive analysis to show numbers that prove the presence of a market for your product, industry behavior in the present and the long run, as well as the percentage of the market you aim to attract. It shows that you understand your competitors and customers and convinces investors of the opportunities presented in the market.
- Business Model: Your business model is the hook of your presentation. It may vary in complexity but it should generally include a pricing system informed by your market analysis. The goal of the slide is to confirm your business model is easy to implement.
- Marketing Strategy: This slide should summarize a few customer acquisition methods that you plan to use to grow the business.
- Competitive Advantage: What this slide will do is provide information on what will set you apart and make you a more attractive option to customers. It could be the possession of technology that is not widely known in the market.
- Team Slide: Here you will give a brief description of your team. Include your key management personnel here and their specific roles in the company. Include their educational background, job history, and skillsets. Also, talk about their accomplishments in their careers so far to build investors' confidence in members of your team.
- Traction Slide: This validates the company’s business model by showing growth through early sales and support. The slide aims to reduce any lingering fears in potential investors by showing realistic periodic milestones and profit margins. It can include current sales, growth, valuable customers, pre-orders, or data from surveys outlining current consumer interest.
- Funding Slide: This slide is popularly referred to as ‘the ask'. Here you will include important details like how much is needed to get your business off the ground and how the funding will be spent to help the company reach its goals.
- Appendix Slides: Your pitch deck appendix should always be included alongside a standard pitch presentation. It consists of additional slides you could not show in the pitch deck but you need to complement your presentation.
It is important to support your calculations with pictorial renditions. Infographics, such as pie charts or bar graphs, will be more effective in presenting the information than just listing numbers. For example, a six-month graph that shows rising profit margins will easily look more impressive than merely writing it.
Lastly, since a pitch deck is primarily used to secure meetings and you may be sharing your pitch with several investors, it is advisable to keep a separate public version that doesn't include financials. Only disclose the one with projections once you have secured a link with an investor.
Advantages of the Business Model Canvas, Lean Canvas, and Startup Pitch Deck over the Traditional Business Plan
- Time-Saving: Writing a detailed traditional business plan could take weeks or months. On the other hand, all three alternatives can be done in a few days or even one night of brainstorming if you have a comprehensive understanding of your business.
- Easier to Understand: Since the information presented is almost entirely factual, it puts focus on what is most important in running the business. They cut away the excess pages of fillers in a traditional business plan and allow investors to see what is driving the business and what is getting in the way.
- Easy to Update: Businesses typically present their business plans to many potential investors before they secure funding. What this means is that you may regularly have to amend your presentation to update statistics or adjust to audience-specific needs. For a traditional business plan, this could mean rewriting a whole section of your plan. For the three alternatives, updating is much easier because they are not voluminous.
- Guide for a More In-depth Business Plan: All three alternatives have the added benefit of being able to double as a sketch of your business plan if the need to create one arises in the future.
Business Plan FAQ
Business plans are important for any entrepreneur who is looking for a framework to run their company over some time or seeking external support. Although they are essential for new businesses, every company should ideally have a business plan to track their growth from time to time. They can be used by startups seeking investments or loans to convey their business ideas or an employee to convince his boss of the feasibility of starting a new project. They can also be used by companies seeking to recruit high-profile employee targets into key positions or trying to secure partnerships with other firms.
Business plans often vary depending on your target audience, the scope, and the goals for the plan. Startup plans are the most common among the different types of business plans. A start-up plan is used by a new business to present all the necessary information to help get the business up and running. They are usually used by entrepreneurs who are seeking funding from investors or bank loans. The established company alternative to a start-up plan is a feasibility plan. A feasibility plan is often used by an established company looking for new business opportunities. They are used to show the upsides of creating a new product for a consumer base. Because the audience is usually company people, it requires less company analysis. The third type of business plan is the lean business plan. A lean business plan is a brief, straight-to-the-point breakdown of your ideas and analysis for your business. It does not contain details of your proposal and can be written on one page. Finally, you have the what-if plan. As it implies, a what-if plan is a preparation for the worst-case scenario. You must always be prepared for the possibility of your original plan being rejected. A good what-if plan will serve as a good plan B to the original.
A good business plan has 10 key components. They include an executive plan, product analysis, desired customer base, company analysis, industry analysis, marketing strategy, sales strategy, financial projection, funding, and appendix. Executive Plan Your business should begin with your executive plan. An executive plan will provide early insight into what you are planning to achieve with your business. It should include your mission statement and highlight some of the important points which you will explain later. Product Analysis The next component of your business plan is your product analysis. A key part of this section is explaining the type of item or service you are going to offer as well as the market problems your product will solve. Desired Consumer Base Your product analysis should be supplemented with a detailed breakdown of your desired consumer base. Investors are always interested in knowing the economic power of your market as well as potential MVP customers. Company Analysis The next component of your business plan is your company analysis. Here, you explain how you want to run your business. It will include your operational strategy, an insight into the workforce needed to keep the company running, and important executive positions. It will also provide a calculation of expected operational costs. Industry Analysis A good business plan should also contain well laid out industry analysis. It is important to convince potential investors you know the companies you will be competing with, as well as your plans to gain an edge on the competition. Marketing Strategy Your business plan should also include your marketing strategy. This is how you intend to spread awareness of your product. It should include a detailed explanation of the company brand as well as your advertising methods. Sales Strategy Your sales strategy comes after the market strategy. Here you give an overview of your company's pricing strategy and how you aim to maximize profits. You can also explain how your prices will adapt to market behaviors. Financial Projection The financial projection is the next component of your business plan. It explains your company's expected running cost and revenue earned during the tenure of the business plan. Financial projection gives a clear idea of how your company will develop in the future. Funding The next component of your business plan is funding. You have to detail how much external investment you need to get your business idea off the ground here. Appendix The last component of your plan is the appendix. This is where you put licenses, graphs, or key information that does not fit in any of the other components.
The business model canvas is a business management tool used to quickly define your business idea and model. It is often used when investors need you to pitch your business idea during a brief window.
A pitch deck is similar to a business model canvas except that it makes use of slides in its presentation. A pitch is not primarily used to secure funding, rather its main purpose is to entice potential investors by selling a very optimistic outlook on the business.
Business plan competitions help you evaluate the strength of your business plan. By participating in business plan competitions, you are improving your experience. The experience provides you with a degree of validation while practicing important skills. The main motivation for entering into the competitions is often to secure funding by finishing in podium positions. There is also the chance that you may catch the eye of a casual observer outside of the competition. These competitions also provide good networking opportunities. You could meet mentors who will take a keen interest in guiding you in your business journey. You also have the opportunity to meet other entrepreneurs whose ideas can complement yours.
Exlore Further
- 12 Key Elements of a Business Plan (Top Components Explained)
- 13 Sources of Business Finance For Companies & Sole Traders
- 5 Common Types of Business Structures (+ Pros & Cons)
- How to Buy a Business in 8 Steps (+ Due Diligence Checklist)
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Martin luenendonk.
Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.
This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.
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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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How to Write a Market Analysis for a Business Plan
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A lot of preparation goes into starting a business before you can open your doors to the public or launch your online store. One of your first steps should be to write a business plan . A business plan will serve as your roadmap when building your business.
Within your business plan, there’s an important section you should pay careful attention to: your market analysis. Your market analysis helps you understand your target market and how you can thrive within it.
Simply put, your market analysis shows that you’ve done your research. It also contributes to your marketing strategy by defining your target customer and researching their buying habits. Overall, a market analysis will yield invaluable data if you have limited knowledge about your market, the market has fierce competition, and if you require a business loan. In this guide, we'll explore how to conduct your own market analysis.
How to conduct a market analysis: A step-by-step guide
In your market analysis, you can expect to cover the following:
Industry outlook
Target market
Market value
Competition
Barriers to entry
Let’s dive into an in-depth look into each section:
Step 1: Define your objective
Before you begin your market analysis, it’s important to define your objective for writing a market analysis. Are you writing it for internal purposes or for external purposes?
If you were doing a market analysis for internal purposes, you might be brainstorming new products to launch or adjusting your marketing tactics. An example of an external purpose might be that you need a market analysis to get approved for a business loan .
The comprehensiveness of your market analysis will depend on your objective. If you’re preparing for a new product launch, you might focus more heavily on researching the competition. A market analysis for a loan approval would require heavy data and research into market size and growth, share potential, and pricing.
Step 2: Provide an industry outlook
An industry outlook is a general direction of where your industry is heading. Lenders want to know whether you’re targeting a growing industry or declining industry. For example, if you’re looking to sell VCRs in 2020, it’s unlikely that your business will succeed.
Starting your market analysis with an industry outlook offers a preliminary view of the market and what to expect in your market analysis. When writing this section, you'll want to include:
Market size
Are you chasing big markets or are you targeting very niche markets? If you’re targeting a niche market, are there enough customers to support your business and buy your product?
Product life cycle
If you develop a product, what will its life cycle look like? Lenders want an overview of how your product will come into fruition after it’s developed and launched. In this section, you can discuss your product’s:
Research and development
Projected growth
How do you see your company performing over time? Calculating your year-over-year growth will help you and lenders see how your business has grown thus far. Calculating your projected growth shows how your business will fare in future projected market conditions.
Step 3: Determine your target market
This section of your market analysis is dedicated to your potential customer. Who is your ideal target customer? How can you cater your product to serve them specifically?
Don’t make the mistake of wanting to sell your product to everybody. Your target customer should be specific. For example, if you’re selling mittens, you wouldn’t want to market to warmer climates like Hawaii. You should target customers who live in colder regions. The more nuanced your target market is, the more information you’ll have to inform your business and marketing strategy.
With that in mind, your target market section should include the following points:
Demographics
This is where you leave nothing to mystery about your ideal customer. You want to know every aspect of your customer so you can best serve them. Dedicate time to researching the following demographics:
Income level
Create a customer persona
Creating a customer persona can help you better understand your customer. It can be easier to market to a person than data on paper. You can give this persona a name, background, and job. Mold this persona into your target customer.
What are your customer’s pain points? How do these pain points influence how they buy products? What matters most to them? Why do they choose one brand over another?
Research and supporting material
Information without data are just claims. To add credibility to your market analysis, you need to include data. Some methods for collecting data include:
Target group surveys
Focus groups
Reading reviews
Feedback surveys
You can also consult resources online. For example, the U.S. Census Bureau can help you find demographics in calculating your market share. The U.S. Department of Commerce and the U.S. Small Business Administration also offer general data that can help you research your target industry.
Step 4: Calculate market value
You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value.
A top-down analysis tends to be the easier option of the two. It requires for you to calculate the entire market and then estimate how much of a share you expect your business to get. For example, let’s assume your target market consists of 100,000 people. If you’re optimistic and manage to get 1% of that market, you can expect to make 1,000 sales.
A bottom-up analysis is more data-driven and requires more research. You calculate the individual factors of your business and then estimate how high you can scale them to arrive at a projected market share. Some factors to consider when doing a bottom-up analysis include:
Where products are sold
Who your competition is
The price per unit
How many consumers you expect to reach
The average amount a customer would buy over time
While a bottom-up analysis requires more data than a top-down analysis, you can usually arrive at a more accurate calculation.
Step 5: Get to know your competition
Before you start a business, you need to research the level of competition within your market. Are there certain companies getting the lion’s share of the market? How can you position yourself to stand out from the competition?
There are two types of competitors that you should be aware of: direct competitors and indirect competitors.
Direct competitors are other businesses who sell the same product as you. If you and the company across town both sell apples, you are direct competitors.
An indirect competitor sells a different but similar product to yours. If that company across town sells oranges instead, they are an indirect competitor. Apples and oranges are different but they still target a similar market: people who eat fruits.
Also, here are some questions you want to answer when writing this section of your market analysis:
What are your competitor’s strengths?
What are your competitor’s weaknesses?
How can you cover your competitor’s weaknesses in your own business?
How can you solve the same problems better or differently than your competitors?
How can you leverage technology to better serve your customers?
How big of a threat are your competitors if you open your business?
Step 6: Identify your barriers
Writing a market analysis can help you identify some glaring barriers to starting your business. Researching these barriers will help you avoid any costly legal or business mistakes down the line. Some entry barriers to address in your marketing analysis include:
Technology: How rapid is technology advancing and can it render your product obsolete within the next five years?
Branding: You need to establish your brand identity to stand out in a saturated market.
Cost of entry: Startup costs, like renting a space and hiring employees, are expensive. Also, specialty equipment often comes with hefty price tags. (Consider researching equipment financing to help finance these purchases.)
Location: You need to secure a prime location if you’re opening a physical store.
Competition: A market with fierce competition can be a steep uphill battle (like attempting to go toe-to-toe with Apple or Amazon).
Step 7: Know the regulations
When starting a business, it’s your responsibility to research governmental and state business regulations within your market. Some regulations to keep in mind include (but aren’t limited to):
Employment and labor laws
Advertising
Environmental regulations
If you’re a newer entrepreneur and this is your first business, this part can be daunting so you might want to consult with a business attorney. A legal professional will help you identify the legal requirements specific to your business. You can also check online legal help sites like LegalZoom or Rocket Lawyer.
Tips when writing your market analysis
We wouldn’t be surprised if you feel overwhelmed by the sheer volume of information needed in a market analysis. Keep in mind, though, this research is key to launching a successful business. You don’t want to cut corners, but here are a few tips to help you out when writing your market analysis:
Use visual aids
Nobody likes 30 pages of nothing but text. Using visual aids can break up those text blocks, making your market analysis more visually appealing. When discussing statistics and metrics, charts and graphs will help you better communicate your data.
Include a summary
If you’ve ever read an article from an academic journal, you’ll notice that writers include an abstract that offers the reader a preview.
Use this same tactic when writing your market analysis. It will prime the reader of your market highlights before they dive into the hard data.
Get to the point
It’s better to keep your market analysis concise than to stuff it with fluff and repetition. You’ll want to present your data, analyze it, and then tie it back into how your business can thrive within your target market.
Revisit your market analysis regularly
Markets are always changing and it's important that your business changes with your target market. Revisiting your market analysis ensures that your business operations align with changing market conditions. The best businesses are the ones that can adapt.
Why should you write a market analysis?
Your market analysis helps you look at factors within your market to determine if it’s a good fit for your business model. A market analysis will help you:
1. Learn how to analyze the market need
Markets are always shifting and it’s a good idea to identify current and projected market conditions. These trends will help you understand the size of your market and whether there are paying customers waiting for you. Doing a market analysis helps you confirm that your target market is a lucrative market.
2. Learn about your customers
The best way to serve your customer is to understand them. A market analysis will examine your customer’s buying habits, pain points, and desires. This information will aid you in developing a business that addresses those points.
3. Get approved for a business loan
Starting a business, especially if it’s your first one, requires startup funding. A good first step is to apply for a business loan with your bank or other financial institution.
A thorough market analysis shows that you’re professional, prepared, and worth the investment from lenders. This preparation inspires confidence within the lender that you can build a business and repay the loan.
4. Beat the competition
Your research will offer valuable insight and certain advantages that the competition might not have. For example, thoroughly understanding your customer’s pain points and desires will help you develop a superior product or service than your competitors. If your business is already up and running, an updated market analysis can upgrade your marketing strategy or help you launch a new product.
Final thoughts
There is a saying that the first step to cutting down a tree is to sharpen an axe. In other words, preparation is the key to success. In business, preparation increases the chances that your business will succeed, even in a competitive market.
The market analysis section of your business plan separates the entrepreneurs who have done their homework from those who haven’t. Now that you’ve learned how to write a market analysis, it’s time for you to sharpen your axe and grow a successful business. And keep in mind, if you need help crafting your business plan, you can always turn to business plan software or a free template to help you stay organized.
This article originally appeared on JustBusiness, a subsidiary of NerdWallet.
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Marketing91
Customer Analysis
June 12, 2023 | By Hitesh Bhasin | Filed Under: Marketing
Customer analysis is a way of analyzing and using customer data while strategizing an organization’s business plan. Customer analysis is a key element of customer acquisition strategies of marketing and advertising campaigns. It provides valuable insights about your prospective customers (like their purchasing behavior, preferences, demographics, decision making , etc), so you can segment customers while running marketing campaigns of a product or service to optimize sales growth and customer retention
You can only fulfill the customer’s requirements if you know what the customer wants. When you understand your potential clients, you determine who your target customers are and decide how you will attract them to buy your products. The key objective of customer analysis is to gain insight and have a deeper understanding of buyer persona to optimize the company ’s business plan and brand positioning in a personalized and result-driven manner.
Table of Contents
What is Customer Analysis?
Definition: Customer analysis is defined as the inclusion of qualitative and quantitative research methodologies used for understanding customer’s journey and their buying behavior to optimize the decision making process to make a successful marketing plan .
It tells the customer needs of your active customers, current customers, or new focus groups to offer products and services in a customized manner for enjoying increased sales and optimized brand loyalty .
Customer analysis helps in-
- Identifying who your customers are
- Finding out their needs and their pain points
- Making profitable segments of customers as per similar traits and customers behavior
- Creating a profile or buyer personas of your ideal customer(s)
- A better understanding of purchasing decisions patterns of new customers
- Designing personalized content and marketing strategy on best-suited marketing channels
- Extended decision making by suggesting significant modifications so product or service meets customer needs
Importance of Analysis of Customer Base
Customer Analysis is described as a way to comprehend clients, customer base , or target market of a business to optimize marketing efforts and customer acquisition. It is an essential function of marketing analysis.
Customer analysis takes place when a company researches its potential customers and their requirements. Customer analytics, as well as customer surveys, are the focused studies of the customer behaviors that come into play while addressing the pain points of target audiences and boosting total sales.
Before the customer starts to buy, businesses examine certain factors to find out the buying criteria of their target audiences. Total market capacity would be among the most critical estimations. Other factors considered are the marketplace, choices, economic situation, cost elasticity, etc.
The aim is to know the preferences of the significant number of target customers and why would they choose your product. What would motivate them to purchase your product?
Through buying behavior of the customers, businesses pay attention to the ways customers focus on the products or services, and accordingly, they decide their segmentation criteria to run personalized campaigns to target audiences of specific segments like geographic location, age range, inclinations, etc.
Customers tend to select products or services that have a good brand image and are positively reviewed by other customers. Customer analysis helps in guiding businesses in fulfilling the specific needs of the target audiences.
Behavioral Analysis of Customer Base – Analyzing Purchase Process and Patterns
Customer Analysis at times needs a detailed understanding of how exactly a customer decides to buy a product. It is not as easy as it seems. It requires a thorough study of the customer’s buying patterns.
Through this analysis, a firm tries to understand the customer by determining certain elements, such as –
- The steps that the customer takes in determining the product
- The information sources are considered by the customer while deciding the product to buy
- The amount of time the customer takes to determine their purchase
- Would the customer consult other people before purchasing the product
- The person who makes the final decision
- Does the target customer seek multiple bids
- Do some customer segments need modification in product or service
Behavior analysis can additionally concentrate on activities, like the kinds of products that were bought. It identifies the number of times the products were purchased and the time interval in which they were purchased.
To distinguish the shopping patterns and preferences of the customers, one must have an answer to the following questions-
- The purpose/event for shopping?
- How many times will the customer buy the product?
- The frequency of the purchase and the time interval between two purchases?
- The total number of goods acquired?
- How much time did the customer take to decide what to buy?
- Where did the customer buy the product, and where do they use it?
Steps to Conduct Customer Analysis for Optimizing Marketing Efforts
Customer Analysis is a time-consuming task and requires a proper execution strategy . Below are the steps of customer analysis –
1. Examine your current customer database and segment customers
The first step would be to understand the data of your existing customers. The preferences of your existing customers can help you understand their likes and dislikes. They can be segregated into different sections based on their age, gender, location, choices, income, frequency of buying, etc.
Dividing the customers into different groups will help to focus on one group at a time. That would help gain the attention of the potential customers and will help in boosting the business.
Different categories in which your target customers can be segmented are-
- Demographic such as age (range), income, gender, etc
- Geographic segmentation which is location-specific
- Psychographic segments based upon values, interests, beliefs, personality
- Technographic segments that depend upon the device/platform a customer is using
- Behavioral segmentation methods associated with the habits and frequent actions
- Needs-based segmentation criteria related to the needs that a product satisfies
- Value-based segmentation generally measured by Customer Lifetime Value (CLV)
- Industry based segmentation related to the industry the customer belongs to
- Business size segments based upon the number of employees or the revenue size or the average sale size
2. Recognize your potential target market segment & valuable customers
The second step is to identify your important customers. The customers that are most likely to get attracted to your products should be your focus. Through analyzing customer behavior patterns, you can find your target customers.
As the Pareto Principle suggests, for a company, around 80% of the business comes from 20% of customers, so it is crucial to find out your valuable customers first. Some of the customer metrics that will help you in checking the patterns in your customer database to measure customer retention are-
- Customer Lifetime Value (CLV)
- Repeat Purchase Rate
- Customer Retention Rate
- Redemption Rate
You may also try some of the key methods to measure customer loyalty towards your brand. You can do this by using the following methods-
- Repurchase Ratio
- Customer Loyalty Index (CLI)
- Upselling Ratio
- Customer engagement numbers
Customer database can also be used to find out valuable insights about the personal information of target audiences to know their age and background, so you can use the right ways of communicating with those audiences.
3. Communicating with new and existing customer
It is essential to create a bond with your customers that they do not forget. A customer stays loyal to a brand, through which they have received excellent products and their requirements were acknowledged by the brand efficiently.
You need to know what the customer wants precisely to target them. It would not be possible without talking to the customer themselves about their experience. Customers tend to trust brands that constantly improve according to the customer’s suggestions.
Some of the methods you might try to communicate with your customers during a brand meet are-
a. One-to-one interviews
It lets customers share their side of the story behind their purchase decisions as well as their issues or pain points that impact their buying behavior.
b. Customer focus groups
Focus groups incorporate a selection of customers in a room with whom businesses discuss specific topics.
c. Usability study
It is used to observe how the use of a product or service by a few customers can uncover the issues associated with a product or service of a brand.
4. Collect voices/opinions of existing and new customers from the field
Interviews may have some sort of selection biases, therefore, businesses might try to collect customer voices or opinions directly from the field. Some of the ways you can try for this are-
a. Service conversations
The customer services or support departments are perfect for channelizing service conversations with customers in the field. Here, pain points, pain points, improvement/modification suggestions can be directly taken from customers. Use of live chat or support emails can also assist in this.
b. Social media – sentiment analysis
Businesses can also use sentiment analysis on social media channels. The use of unrestricted surveys on social media forums can be quite useful in this. Different tools like Brandwatch, Lexanalytics, Critical Mention, etc can be helpful in this.
c. Review sites
Different review sites like Capterra and G2 can also provide more concrete insights in comparison to the social media forums.
d. Conduct survey
Since talking to customers as well as collecting customer voices from the field are qualitative ways of gaining customer insights , running surveys is considered a quantitative way of finding customer sentiments and inclinations. methods. Different ways of conducting surveys are In-app surveys, Long email surveys, Post-service surveys, etc.
e. Conjoint analysis
This one is known as a choice-based survey method that asks target audiences to give a value to a product or service feature by using some hypothetical questions. Some of the resources that can help you in this are QuestionPro, Conjointly, Qualtrics, etc.
5. Identify how your brand can satisfy the customer’s needs
After understanding the customer demands, the subsequent step would be to implement measures to meet the customer’s needs. Finally, resolve the issues the customer might be facing. The goal is to enhance the customer experience as much as possible.
The next step after segmenting your customers is to use all the insights from the above steps to create customer personas of your target customer(s). These buyer personas include the details about your customers’ demographics, behavior patterns, motivations , goals, pain points, etc.
Making a customer journey map as per the change in the behavior of customers at different stages of their journey is another important step businesses need to take here. You can understand the customer journey map as a visual representation of different touchpoints and interactions customers go through to make their purchases.
For creating customer journey maps, you should list all the touchpoints and all possible actions along with the charting of emotions for every action and identifying pain points for each of the customer personas.
Role of Customer Profiles in Customer Analysis
Considering several factors like age, gender, location, background, income, choices, hobbies, language, and education , businesses can create customer profiles .
Every customer will be placed in separate sections to which they belong. What these customer profiles would do is, it would help the brand to focus on a specific group at a time, recognize their needs, identify their problems and solve them.
In addition, it helps in creating a clear picture of the requirements of the customer, hence it will alleviate the tasks of creating buyer personas.
Benefits of Customer Analysis
1. boosts marketing performance via personalized content.
Customer analysis helps in determining the proper steps to be taken to build up marketing strategies. Knowing about a customer will result in understanding what would attract the customers and what wouldn’t.
2. Customer loyalty and customer retention
It is required to understand what can cause the customers to move away from the brand. Customer Analysis enables us to understand what the buyers prefer. Having loyal customers help in increasing profits.
3. Revenue Increase
Meeting the customer demands would result in the overall growth of the company. In addition, it would lead to a boost in sales which means the revenue would increase.
Conclusion!
Applying principles of customer analysis to your business will optimize your business performance and make it more result-driven in the following ways-
- Through detailed Customer Analysis, you can get to understand customer behavior and their shopping patterns, as it helps you learn about your target customer to the core.
- Dividing the customers into separate groups is beneficial since it will help in strategizing a marketing plan for a specific group at once.
- The customer data is divided based on several factors like age, location, gender, language, etc., and then their requirements are identified.
- Personalized marketing campaigns will lead to customer loyalty that will help in prospering the business.
Liked this post? Check out the complete series on Customer Management
Related posts:
- What is Customer Equity? Components of Customer Equity
- What is Customer Feedback? 7 Types of Customer Feedback
- What are Customer Insights? Importance of Customer Insights
- How to get Customer Testimonials? 9 Customer Testimonial Examples
- Customer Care: Concept, Examples, & How to have Good Customer Care
- What is Customer Relations -Ways to Build Better Customer Relations
- Customer Persona – Meaning & Best Tips Develop a Customer Persona
- What is Customer Lifecycle? Stages and Analysis
- 6 Types Of Customer Segments to Target
- What is Customer Satisfaction?
About Hitesh Bhasin
Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.
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How to Write a Business Plan: Target Market Analysis
The Business Plan and the Importance of Defining Your Target Market
Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.
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Conducting a Market Analysis
Polling your target market, writing the market analysis, online tools for market research, u.s. online market research sources, canadian online market research, local sources of market research, doing your own market research.
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The market analysis is basically the target market section of your business plan . It is a thorough examination of the ideal people to whom you intend to sell your products or services.
Even if you intend on selling a product or service only in your community, you won't be selling that service to everyone who lives there. Knowing exactly what type(s) of people might be interested in buying your product or service and how many of them reside in your projected area or region is fundamental in creating your market analysis.
Once target market data has been established, you'll also work on sales projections within specific time frames, as well as how prospective sales might be affected by trends and policies.
Research is key and cornerstone of any solid business plan .
Don't Skip This Step!
Don't skip market research; otherwise, you could end up starting a business that doesn't have a paying market.
Use these general terms as linchpins in research data for the market analysis section of your business plan, and to identify your target market:
What age range are you catering products/services to? Kids? Adults? Seniors? Gen X? Millennials? | |
Are you targeting men, women, or both sexes? | |
Are your target customers married or single, or divorced? | |
What is their family structure (number of children, extended family, etc.)? | |
Where do they live? Are you selling locally? Regionally, nationally, or internationally? | |
How much education do they have? | |
What is their income? | |
What do they do for a living? | |
Are they members of a particular religious group? | |
Are they members of a particular language group? | |
What is their lifestyle like? | |
What motivates them? | |
What is the size of the target market? |
But don't stop here. To succinctly define your target market, poll or survey members of your prospective clients or customers to ask specific questions directly related to your products or services. For instance, if you plan to sell computer-related services, ask questions relating to the number of computing devices your prospective customers own and how often they require servicing. If you plan on selling garden furniture and accessories, ask what kinds of garden furniture or accessories your potential customers have bought in the past, how often, and what they expect to buy within the next one, three, and five years.
Answers to these and other questions related to your market are to help you understand your market potential.
The goal of the information you collect is to help you project how much of your product or service you'll be able to sell. Review these important questions you need to try to answer using the data you collect:
- What proportion of your target market has used a product similar to yours before?
- How much of your product or service might your target market buy? (Estimate this in gross sales and/or in units of product/service sold.)
- What proportion of your target market might be repeat customers?
- How might your target market be affected by demographic shifts?
- How might your target market be affected by economic events (e.g. a local mill closing or a big-box retailer opening locally)?
- How might your target market be affected by larger socio-economic trends?
- How might your target market be affected by government policies (e.g. new bylaws or changes in taxes)?
One purpose of the market analysis is to ensure you have a viable business idea.
Find Your Buying Market
Use your market research to make sure people don't just like your business idea, but they're also willing to pay for it.
If you have information suggesting that you have a large enough market to sustain your business goals, write the market analysis in the form of several short paragraphs using appropriate headings for each. If you have several target markets, you may want to number each.
Sections of your market analysis should include:
- Industry Description and Outlook
- Target Market
- Market Research Results
- Competitive Analysis
Remember to properly cite your sources of information within the body of your market analysis as you write it. You and other readers of your business plan, such as potential investors, will need to know the sources of the statistics or opinions that you've gathered.
There are several online resources to learn if your business idea is something worth pursing, including:
- Keyword searches can give you an overall sense of potential demand for your product or service based on the number of searches.
- Google Trends analysis can tell you how the number of searches has changed over time.
- Social media campaigns can give you an indication of the potential customer interest in your business idea.
The U.S. Small Business Administration (SBA) has information on doing your market research and analysis , as well as a list of free small business data and trends resources you can use to conduct your research. Consider these sources for data collection:
- SBA Business Data and Statistics
- The U.S. Census Bureau maintains a huge database of demographic information that is searchable by state, county, city/town, or zip code using its census data tool . Community, housing, economic, and population surveys are also available.
- The U.S. Department of Commerce Bureau of Economic Analysis (BEA) has extensive statistics on the economy including consumer income/spending/consumption, business activity, GDP, and more, all of which are searchable by location.
The Government of Canada offers a guide on doing market research and tips for understanding the data you collect. Canadian data resources include:
- Statistics Canada offers demographic and economic data.
- The Business Development Bank of Canada (BDC) offers market research and consulting with industry experts.
- The Canada Business Network provides business information to entrepreneurs by province/territory, including market research data.
There are also a great many local resources for building target market information to explore, including:
- Local library
- Local Chamber of Commerce
- Board of Trade
- Economic Development Centre
- Local government agent's office
- Provincial business ministry
- Local phone book
All of these will have information helpful in defining your target market and providing insights into trends.
The above resources are secondary sources of information, in which others have collected and compiled the data. To get specific information about your business, consider conducting your own market research . For instance, you might want to design a questionnaire and survey your target market to learn more about their habits and preferences relating to your product or service.
Market research is time-consuming but is an important step in affording your business plan validity. If you don't have the time or the research skills to thoroughly define your target market yourself, hiring a person or firm to do the research for you can be a wise investment.
Small Business Administration. " Market Research and Competitive Analysis. " Accessed Jan. 13, 2020.
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How To Create A Successful Marketing Plan
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Published: Aug 13, 2024, 7:15am
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Table of Contents
What is a marketing plan, marketing plan vs. marketing strategy, why businesses need a marketing plan, essential marketing channels, how to create a marketing plan, bottom line, frequently asked questions (faqs).
The difference between a flourishing business and a floundering business often comes down to an effective marketing campaign. This is especially true for small businesses. Every successful marketing campaign starts with a well-thought-out marketing plan. In this article, we will guide you through the steps on how to create a top-notch marketing plan to help put your business on the road to success.
A marketing plan is essentially a roadmap that guides businesses through the complex terrain of promoting their products or services. Think of it as a blueprint that details specific marketing campaigns, timelines, target audiences and channels such as social media , email or traditional media. Your plan should also establish clear metrics for success, the methodology used to evaluate performance and allocated budgets.
It is important to note that a marketing plan is not a static document. It is supposed to be an ever-evolving plan that adapts to market trends, customer feedback and the successful or unsuccessful marketing efforts. If done properly, a marketing plan will help you synchronize your marketing objectives with your overall business goals and ensure every marketing activity aligns with your broader vision of growth.
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Some assume that “marketing plan” and “marketing strategy” are the same thing, but be aware they hold distinct meanings and serve different purposes. A marketing strategy is more big-picture thinking. It identifies your target market, your value proposition, how you position yourself against competitors and how you will sustain your value over time. It involves deep insights into your customers’ needs, market trends and competitive analysis. It is essentially the “why” behind all your marketing actions.
The marketing plan, on the other hand, details the “what” and the “when” of those efforts. Once you have your marketing strategy outlined, you can begin to create a marketing plan. The plan should outline the specific campaigns, activities and tactics you’ll use to carry out the strategy. This includes details on the marketing channels you’ll use, the timeline for implementation, the budget and the key performance indicators you’ll track to measure success. It’s a blueprint that translates the strategy into actionable tasks and schedules.
A carefully crafted marketing plan can be a game-changer for small businesses dreaming of steady growth and a competitive edge over larger companies. Marketing plans with smart strategies and targeted campaigns can level the playing field by helping small businesses carve out their niche. It provides a clear roadmap that aligns marketing efforts with business objectives to ensure every marketing action contributes to the broader company goals.
This focused approach saves small businesses money by efficiently focusing resources instead of using a scattergun approach that can drain limited budgets. By identifying and understanding target markets, businesses can tailor their messaging to meet specific needs, which increases the likelihood of conversion. A solid marketing plan offers a framework for measuring success by setting benchmarks. With careful tracking, small businesses can quickly see what’s not working and adjust strategies in real time for better outcomes.
Today’s businesses have a wide array of marketing channels available to them. From highly analytical PPC advertising to engaging in-person event marketing, there’s no shortage of methods to promote your company.
Social Media
During the past two decades, social media has proved to be a highly effective way for small businesses to market themselves at little to no costs. Platforms including TikTok, Facebook, Instagram, X and LinkedIn offer businesses a dynamic platform to engage directly with their audience. They allow for the sharing of content, running targeted ads and fostering community through comments and shares. Effective social media marketing can enhance brand awareness, drive traffic and strengthen customer loyalty.
Email Marketing
Email marketing is another highly effective way to reach an audience directly. Newsletters, promotional offers and personalized content can nurture leads, promote loyalty and drive conversions. Email marketing offers measurable results and high ROI, making it a staple in a digital marketing strategy toolbox.
- Content Marketing
Content marketing involves creating hyper-relevant and compelling content that will act as a magnet to attract a laser-focused group of people. You can create blogs, videos, infographics and podcasts to cultivate an engaged community of followers with whom your brand’s message genuinely resonates.
Search Engine Optimization (SEO)
SEO is the practice of optimizing website content to rank higher in search engine results pages. Effective SEO strategies including on-page optimization, quality link building and keyword research help drive traffic to your website.
Pay-Per-Click (PPC) Advertising
PPC advertising is a method of online marketing where you pay a fee each time someone clicks on your ad. Popular platforms such as Google Ads and Bing Ads guarantee your ads show up first in search engine results for specific keywords, allowing you to bypass the “organic” results. While the pay-per-click fees can add up, this form of advertising provides immediate traffic and measurable results.
Influencer Marketing
Influencer marketing leverages the reach of influencers in specific niches to help you promote your business to a larger audience. When you partner with a credible influencer, you can tap into their loyal followings, gain trust quickly and drive engagement that will hopefully lead to greater sales. Affiliate marketing can complement influencer marketing by allowing influencers to earn commissions on the sales they drive. This performance-based option is cost effective, as you will only pay for actual results.
Event Marketing
Event marketing involves marketing your brand, company or service through in-person or virtual events. It can be anything from interactive webinars and educational workshops to large-scale conferences and industry trade shows. Event marketing gives you the opportunity to directly engage with your audience and hopefully provide a memorable experience for your customers.
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Creating a marketing plan is a step-by-step process. Make sure you take your time with each step before moving on to the next one.
1. Create an Executive Summary
An executive summary is a snapshot of your simplified marketing goals, significant milestones and an outline of future plans. It should encapsulate relevant facts about your brand, setting the stage for the detailed strategy that follows. This section provides stakeholders with a clear understanding of where the company stands and where it intends to go, concisely summarizing the essence of the marketing efforts.
2. Identify Your Target Market
Who are you trying to reach? By identifying your target market you can tailor your marketing strategies effectively to help them reach the people most likely to be interested in your products or services. Outline the characteristics of your ideal customer including age, location, goals, pains and trigger points.
3. Research Your Competitors
Competitor research is a critical step in forming a marketing plan. Analyze the strengths and weaknesses in other businesses in your industry. This insight can help you identify opportunities for differentiation and areas where you can fill in the opportunity your competitors may have overlooked.
4. Determine Your Marketing Goals
Without clear marketing goals, you are just shooting barrels in the dark. Are you trying to increase brand awareness, boast sales or grow your digital footprint? And if so, by how much and in what timeframe? Use the SMART criteria for goal setting, which advises that goals should be specific, measurable, achievable, relevant and time-bound.
5. Establish and Track Benchmarks
Once you determine what your marketing goals are, it is important to track their effectiveness.
To do this, set baseline measurements for key performance indicators related to your goals, such as website traffic, conversion rates or social media engagement. Monitor these benchmarks on a regular basis and adjust strategies as needed to enhance marketing performance.
6. Identify Your Marketing Channels
Are you going to throw all your eggs in the social media basket? Or are you going to diversify your marketing strategy with both digital and in-person events? This step requires a deep dive into the various channels available—be it social media, email marketing, SEO or traditional advertising. When choosing your marketing channels, be sure to ask yourself where your target audience is most engaged.
7. Create a Budget
Finally, create a budget that covers all aspects of your marketing efforts from paid advertising and content creation to software subscriptions and event sponsorships. This will help you stay financially responsible as more marketing opportunities arise.
One of the keys to a successful business is setting yourself apart from the competition. A strategic marketing plan that details your marketing efforts can not only help you stand out but also provide a step-by-step guide toward reaching your business objectives.
What are the main elements of a marketing plan?
The main elements of a marketing plan typically include an executive summary, marketing objectives, target audience definition, marketing strategies, budget and metrics for performance evaluation. It outlines the company’s strategy for attracting and retaining customers by detailing specific actions to achieve campaign goals, timeline with key milestones, channels to be used and team members responsibilities.
What is a realistic marketing budget?
A realistic marketing budget is typically determined as a percentage of a company’s revenue. It is recommended that B2B companies spend 2% to 5% of their revenue on marketing. Because B2C companies typically have a broader range of marketing channels, it is recommended they spend between 5% and 10% of their revenue on marketing.
What should every marketing plan start with?
Every marketing plan should start with a clear mission statement for the marketing department that aligns with the overall mission of the business. This statement should be specific enough to guide marketing efforts but also allow room to adjust the plan as needed. For example, if your company’s mission is “to revolutionize home cooking,” the marketing mission might be “to inspire home cooks and provide them with innovative cooking solutions.”
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Jennifer Simonson draws on two decades as a journalist covering everything from local economic developement to small business marketing. Beyond writing, she tested entrepreneurial waters by launching a mobile massage service, a content marketing firm and an e-commerce venture. These experiences enriched her understanding of small business management and marketing strategies. Today, she channels this first-hand knowledge into her articles for Forbes Advisor.
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Boost sales efficiency with 33 AI prompts for sales teams
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Head of Product, Atlassian Intelligence
Being efficient and productive is critical for sales success. AI prompts can help sales teams work smarter by automating tasks, generating useful insights, and improving customer interactions.
In this article, we’ll look at how AI prompts can improve your sales process and cover several types of AI prompts you can use, from qualifying leads to sending personalized messages and predicting future sales. Keep reading to discover the best AI prompts to set you up for sales success.
Understanding AI prompts in sales
Tips for writing effective ai prompts, top 33 ai prompts for sales teams, utilize ai prompts for sales success.
With AI tools, sales teams can automate repetitive tasks, get valuable insights quickly, and personalize customer interactions. The best AI prompts save time and increase efficiency while boosting overall sales performance by allowing teams to collaborate better.
Writing good AI prompts for sales teams maximizes the benefits of AI. Here are some best practices and tips you can use to craft impactful AI prompts:
- Be precise: The more specific your prompt, the better AI can respond. For instance, instead of asking for help with emails, you might ask, “Generate a follow-up email for a lead interested in our software solutions.”
- Provide context: Adding context helps AI provide more relevant and accurate responses. Include details about the task and desired outcome. For example, try “Create a personalized email for a potential client who attended our recent webinar.”
- Iterate and refine: Generative AI improves with feedback. Review the response you get and adjust accordingly to refine future responses. For example, try “ Revise the email to make the tone more casual and friendly.”
With the right AI tools, you can improve your sales processes, benefitting your business and its customers and prospects. Here are some of the best AI prompt ideas to help your sales team excel in various areas, from sales process optimization to competitor analysis and more:
Sales process optimization
Optimizing your sales process improves efficiency, reduces friction, and closes more deals. Here are some AI prompts you can use to automate workflows , prepare for customer calls, and promote customer empathy.
Automate workflows
- Identify repetitive sales tasks that can be automated, such as data entry, follow-up emails, and scheduling meetings.
- Assign new leads to sales representatives based on territory, industry, or lead score criteria.
Prepare for customer calls
- Generate comprehensive call briefs that include customer history, recent interactions, and potential discussion points to help sales reps prepare for calls.
- Analyze upcoming sales calls and identify potential upsell or cross-sell opportunities based on the customer’s purchase history and engagement.
Foster customer empathy
- Develop prompts and scenarios for empathy training sessions to help sales reps better understand and respond to customer emotions and concerns.
- Provide real-time sentiment analysis during customer interactions to help sales reps adjust their approach and show greater empathy.
Create metaphors and analogies to address underlying fear in customer objections
- Act as a salesperson and create a short metaphor or analogy that illustrates how cross-team collaboration is more beneficial than feature-rich tools that work in a silo.
- Act as a salesperson and create a short metaphor or analogy that illustrates how a high-cost product yields unintentional savings.
These prompts are also great for handling common emotional objections. To do so, simply identify objections, articulate potential underlying fears, provide rational responses, and ask the AI tool to craft stories or analogies that illustrate the underlying fear and rational response.
Create a prospecting message
- Act as an account executive at [my company] and generate a persuasive email for the [buyer persona type] about why people in roles like theirs have been consolidating their [tools]. Limit the email to five sentences.
- Summarize a win story for [my product] from the [insert industry name] industry.
Create messaging for buyer persona
- Act as an account executive who understands the needs of my buyer, who is a Vice President of IT and understands the value of [my product] to this buyer persona. Generate a four-sentence or less email discussing the value proposition of [my product] and asking for a meeting.
- Rewrite this email in a more consultative tone for an executive.
- Act as an experienced sales consultant and rewrite this email for a managerial buyer persona.
Research competitive landscapes
- Act as a market researcher and summarise the competitive landscape of the [insert industry name].
- Act as a market researcher and summarise the competitive landscape of work management tools/project management tools/collaboration tools.
Pull insights from an earnings call transcript
- Read this earnings call transcript [insert link here] and summarize how the business plans to stay competitive in its market.
Pull insights from financial reports
- Summarize [document link] and provide the main ideas that would be important to a leader in the [insert industry name].
- Read this annual report [document link] and summarize the industry trends impacting the business.
- Read this earning report [document link] and summarize how the business plans to stay competitive in their market
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Customer segmentation
With customer segmentation, you can tailor your sales strategies to different groups of customers, improving engagement and conversion rates. AI tools can help you segment your customers more accurately and efficiently by identifying partners.
Sales teams can feed data such as demographics, purchasing behaviors, and interactions with the company into AI tools to obtain a comprehensive understanding of their audience. This approach allows sales teams to segment customers more accurately, tailoring their strategies to different groups based on characteristics and preferences.
Once AI understands who your target audience is, you can use the following prompts to segment it:
- Segment our customers into groups based on their purchasing behavior, such as frequent buyers, occasional shoppers, and one-time purchasers.
- Group customers into segments based on their level of engagement with our brand. Use metrics like email open rates, website visitors, and social media interactions.
- Identify and segment our most loyal customers who have repeatedly purchased in the last six months.
Competitor analysis
Knowing what your competitors are doing can help you stay competitive and find new growth opportunities. Sales teams can enhance competitive analysis by providing AI with detailed information about their competitors. This includes identifying key competitors and specifying their industry, market share, strengths, weaknesses, and unique selling propositions.
Feeding this rich dataset into AI tools helps sales teams receive more targeted analyses. Additionally, you can provide context by sharing past interactions, feedback, and historical data regarding competitor performance, allowing AI to better understand your competitors.
Once AI has as much data as you can provide it about your competitors, you can use these AI prompts to help you analyze them:
Monitor competitors
- Review these press releases [provide press releases] to track product launches, marketing campaigns, and other activities from [insert competitor’s name].
- Track [insert competitor’s name] pricing changes and provide insights on how our pricing compares.
Analyze customer feedback
- Analyze customer feedback and reviews [provide reviews] to identify mentions of [insert competitors’ names] and understand customer perceptions and preferences.
- Compare customer feedback on our product features for [insert product name] with those of competitors [provide documentation of website reviews] to identify strengths and weaknesses in our offering.
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Customer churn prediction
Predicting and preventing customer churn can help you maintain a loyal customer base. Here are a few AI prompts to use to integrate feedback and forecast customer lifetime value (CLV):
Integrate feedback
- Integrate and analyze customer feedback from surveys, reviews, and support tickets to identify negative sentiments that could lead to churn.
Teams can efficiently input information from surveys, reviews, and support tickets in several ways. They can directly upload responses via the tool’s interface or establish seamless integrations between their platforms and the AI tool to feed in information that way. The correct method may vary based on the specific features of the AI tool in use.
Forecast lifetime value
- Predict the lifetime value of each customer and identify those with a high churn risk and high potential value.
- Analyze the potential financial impact of customer churn on our business.
Dynamic pricing optimization
Dynamic pricing optimization can maximize revenue by adjusting pricing based on market conditions, demand, and customer behavior. AI tools can create pricing optimization models and make real-time pricing adjustments with these prompts:
Develop pricing models
- Develop a pricing optimization model that adjusts prices based on real-time demand fluctuations and market conditions.
- Create a model that continuously compares our prices with those of competitors and recommends adjustments to maintain competitiveness.
Implement real-time pricing adjustments
- Implement real-time pricing adjustments based on inventory levels, customer segmentation, and purchase pattern behavior.
- Suggest optimal promotional prices for upcoming sales events, considering historical data and current market trends.
Using AI prompts can boost your team’s sales efficiency and success. Automating repetitive tasks, generating insights, and personalizing interactions can enhance your sales process and drive better results. Whether you’re prospecting, generating leads, or working directly with existing customers, the right AI prompts will strengthen your team’s performance and productivity.
Implementing AI tools like Atlassian Intelligence in Jira and Confluence can support your team. Take advantage of AI and learn how Atlassian Intelligence helps your team work smarter . With an understanding of how Atlassian Intelligence works , you can take advantage of its full potential to help you close more deals.
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Money blog: Morrisons admits it 'went too far' with self-checkouts - as it changes strategy
Welcome to the Money blog, your place for personal finance and consumer news and tips. Today's posts include Morrisons getting rid of some self-checkouts and a Money Problem on topping up your national insurance. Leave your consumer issue below - remember to include contact details.
Monday 19 August 2024 20:13, UK
- Energy bills to rise 9% this winter - forecast
- Morrisons admits it went too far with self-checkouts
- Kellogg's shrinks size of Corn Flakes
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- Pay at every supermarket revealed - and perks staff get at each
- Couples on how they split finances when one earns more than other
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Morrisons has admitted it "went a bit too far" with self-checkouts.
Chief executive Rami Baitiéh says the supermarket is "reviewing the balance between self-checkouts and manned tills".
Some will be removed.
Mr Baitiéh told The Telegraph : "Morrisons went a bit too far with the self-checkout. This had the advantage of driving some productivity. However, some shoppers dislike it, mainly when they have a full trolley."
The executive also said self checkouts had driven more shoplifting.
What have other supermarkets said about self-checkouts?
In April, the boss of Sainsbury's said customers liked self-checkouts...
That prompted us to ask readers for their thoughts - and we carried out a poll on LinkedIn which suggested the Sainsbury's boss was right...
Asda's chief financial officer Michael Gleeson said last week the technology had reached its limit - and said his firm would be putting more staff on tills.
Northern grocer Booths ditched almost all self-checkouts last year amid customer service concerns.
Over at Marks & Spencer, chairman Archie Norman last year blamed self-checkouts for a rise in "middle-class shoplifting".
But Tesco CEO Ken Murphy is an advocate: "We genuinely believe, at the end of the day, it provides a better customer experience."
The number of drivers visited by bailiffs due to unpaid traffic fines has increased substantially, according to a report.
Four million penalty charge notices (PCNs) were referred to bailiffs in England and Wales in the 2023-24 financial year, it is claimed.
This is up from 2.4 million during the previous 12 months, 1.9 million in 2019-20 and 1.3 million in 2017-18.
Read more ...
Ted Baker is the latest in a string of high-street giants to call in administrators in recent years, with shops set to disappear this week.
But how does it affect you?
Purchases and returns
You can still buy items online and in store until they close, but you could run into trouble returning them.
If the retailer stops trading, it may not be able to get your money back to you.
If that is the case, you would have to file a claim with Teneo (Ted Baker's administrator) to join a list of creditors owed money by Ted Baker – and even then there's no guarantee you'd get your money back.
If you have a gift card, you need to use it while you still can.
Credits and debits
You can file a claim with your debit or credit card provider to recover lost funds - but how exactly does that work?
- Credit card: If you bought any single item costing between £100-£30,000 and paid on a credit card, the card firm is liable if something goes wrong. If any purchase was less than £100, you may still be able to get your money back via chargeback;
- Debit card: Under chargeback, your bank can try to get your money back from Ted Baker's bank. However, be aware that this is not a legal requirement and it can later be disputed and recalled.
Many retailers boosted wages after living wage/minimum wage changes in spring.
Figures show German discount brands Aldi and Lidl top the list of major UK supermarkets when it comes to staff hourly pay - after Lidl introduced its third pay increase of the year in May to match its closest rival.
Meanwhile, Morrisons is at the bottom of the pack for staff pay outside London, with hourly wages starting at the National Living Wage (£11.44).
How do other companies compare when it comes to pay and benefits? We've taken a look...
Pay: £12.40 an hour outside London and £13.65 inside the M25
Aldi announced in March it was bringing in its second pay rise of the year as part of its aim to be the best-paying UK supermarket.
From 1 June, hourly pay rose from £12 an hour to £12.40 outside the M25 and £13.55 to £13.65 in London.
Aldi is one of the only supermarkets to give staff paid breaks. It also offers perks such as discounted gym membership and cinema tickets, and financial planning tools. However, there are no cheaper meals, staff discounts or bonus schemes.
Pay: £12.04 an hour outside London and £13.21 inside the M25
As of 1 July, hourly wages for Asda supermarket staff rose to £12.04 per hour from £11.11, with rates for London staff also going up to £13.21.
As part of the July changes, Asda brought in the option for free later-life care or mortgage advice. The company also offers a pension and a free remote GP service.
Pay: £12 an hour outside London and £13.15 inside the M25
Co-op boosted its minimum hourly wage for customer team members from £10.90 to £12 nationally as the national living wage rose to £11.44 in April.
For staff inside the M25, rates rose from £12.25 to £13.15.
The perks are better than some. Workers can get 30% off Co-op branded products in its food stores as well as 10% off other brands. Other benefits include a cycle to work scheme, childcare vouchers and discounts on its other services.
Pay: £11.50 an hour outside London and £12.65 inside the M25
Iceland says it pays £11.50 for staff aged 21 and over - 6p above the minimum wage. Employees in London receive £12.65 per hour.
Staff are also offered a 15% in-store discount, which was raised from 10% in 2022 to help with the cost of living.
The firm says it offers other perks such as a healthcare scheme and Christmas vouchers.
Pay: £12.40 an hour outside London and £13.65 inside the M25
From June, Lidl matched its rival Aldi by raising its hourly wage to £12.40 for workers outside the M25 and £13.55 for those inside.
Lidl also offers its staff a 10% discount card from the first working day, as well as other perks such as dental insurance and fertility leave.
Marks and Spencer's hourly rate for store assistants was hiked from £10.90 to £12 for staff outside London and from £12.05 to £13.15 for London workers from April.
The grocer also offers a 20% staff discount after the probation period as well as discretionary bonus schemes and a free virtual GP service.
Pay: £11.44 an hour outside London and £12.29 inside the M25
Along with many other retailers, Morrisons increased the hourly wage for staff outside the M25 in line with the national living wage of £11.44 in April.
Employees in London receive an 85p supplement.
While it's not the most competitive for hourly pay, Morrisons offers perks including staff discounted meals, a 15% in-store discount and life assurance scheme.
Sainsbury’s
Sainsbury's hourly rate for workers outside London rose to £12 from March, and £13.15 for staff inside the M25.
The company also offers a 10% discount card for staff to use at Sainsbury's, Argos and Habitat, as well as a range of benefits including season ticket loans and long service rewards.
Pay: £12.02 an hour outside London and £13.15 inside the M25
Since April, Tesco staff have been paid £12.02 an hour nationally - up from £11.02 - while London workers get £13.15 an hour.
The supermarket giant also provides a 10% in-store discount, discounted glasses, health checks and insurance, and free 24/7 access to a virtual GP.
Staff get their pay boosted by 10% on a Sunday if they joined the company before 24 July 2022.
Pay: £11.55 an hour outside London and £12.89 inside the M25
Waitrose store staff receive £11.55 an hour nationally, while workers inside the M25 get at least £12.89.
Staff can also get access to up to 25% off at Waitrose's partner retailer John Lewis as well as 20% in Waitrose shops.
JLP (the John Lewis Partnership) gives staff a bonus as an annual share-out of profit determined by the firm's performance. In 2021-22 the bonus was 3% of pay; however, it has not paid the bonus for the past two years.
Dozens of Ted Baker stores will shut for the last time this week amid growing doubts over a future licensing partnership with the retail tycoon Mike Ashley.
Sky News understands that talks between Mr Ashley's Frasers Group and Authentic, Ted Baker's owner, have stalled three months after it appeared that an agreement was imminent.
Administrators are overseeing the closure of its remaining 31 UK shops.
One store source said they had been told that this Tuesday would be the final day of trading.
The housing market experienced a surge in activity following the Bank of England's recent decision to cut interest rates, according to a leading property website.
Estate agents reported a 19% jump in enquiries about properties for sale after 1 August, when compared with the same period last year, research by Rightmove found.
It came after the Bank cut rates for the first time in more than four years from 5.25% to 5%.
The lead negotiator for major train union ASLEF has denied the union sees the new government as a "soft touch" after announcing fresh strikes two days after train drivers were offered a pay deal.
Drivers working for London North Eastern Railway will walk out on weekends from the end of August in a dispute over working agreements.
Lead negotiator Nigel Roebuck said it is a separate issue from the long-running row over pay, which looks likely to be resolved after a much-improved new offer from the government.
Over 40 bottles of fake vodka have been seized from a shop in Scotland after a customer reported "smelling nail varnish".
The 35cl bottles, fraudulently labelled as the popular brand Glen's, were recovered from the shop in Coatbridge, North Lanarkshire.
Officers from the council's environmental health officers and Food Standard Scotland (FSS) sent them for analysis after a customer raised the alarm by saying they smelt nail varnish from one of the bottles.
The bottles were found to be counterfeit.
Britons don't have long left to claim cost of living assistance from the Household Support Fund.
Introduced in October 2021, the scheme provides local councils with funding which can be used to support those struggling most with the rising cost of living.
The vast majority of councils operate their version of the Household Support Fund on a "first come, first serve" basis and will officially end the schemes once the funding has run out in September.
The help provided by councils has ranged from free cash payments, council tax discounts, and vouchers for supermarkets and energy providers.
Who is eligible?
Local authorities were instructed to target the funding at "vulnerable households in most need of support to help with significantly rising living costs" when it was first rolled out.
In particular, councils were guided to make priority considerations for those who:
- Are eligible but not claiming qualifying benefits;
- Became eligible for benefits after the relevant qualifying dates;
- Are receiving housing benefit only;
- Are normally eligible for benefits but who had a nil award in the qualifying period.
If you do not meet these criteria, you can still contact your local council , with many having broadened their criteria for eligibility.
By Daniel Binns, business reporter
Weapons maker BAE Systems is the big loser on the FTSE 100 this morning, with its shares down almost 3% in early trading.
It comes following reports over the weekend that the German government is planning to scale back aid to Ukraine in its war with Russia – in what would be a blow to the arms industry.
German media said ministers are set to slash support for Kyiv to 6% of current levels by 2027 in their upcoming budget.
However, the government there has rejected the reports and has denied it is "stopping support" to Ukraine.
Whatever the truth, the reports appear to have spooked traders.
Other companies involved in the defence sector, including Rolls-Royce Plc and Chemring Group, are also down more than 2% and 1% respectively on Monday.
It comes amid a slight slump in early trading, with the FTSE 100 down just over 0.2%, although the FTSE 250 is up 0.07%.
Gainers this morning include housebuilders Barratt Developments, up 1.5%, and Redrow Plc, which is up almost 3%.
Barratt said today it intends to push ahead with a planned £2.5bn merger with its rival despite concerns from the competition regulator.
Meanwhile, the price of oil is down amid concerns of weaker demand in China.
Ongoing ceasefire talks in the Israel-Hamas conflict have also raised hopes of cooling tensions in the Middle East, which would help ease supply risks and worries.
A barrel of the benchmark Brent Crude is currently priced at just over $79 (£61).
On the currency markets, this morning £1 buys $1.29 US or €1.17.
Winter energy bills are projected to rise by 9%, according to a closely watched forecast.
The price cap from October to December will go up to £1,714 a year for the average user, Cornwall Insight says.
It would be a £146 rise from the current cap, which is controlled by energy regulator Ofgem and aims to prevent households on variable tariffs being ripped off.
The cap doesn't represent a maximum bill. Instead it creates an average bill by limiting how much you pay per unit of gas and electricity, as well as setting a maximum daily standing charge (which all households must pay to stay connected to the grid).
Ofgem will announce the October cap this Friday.
"This is not the news households want to hear when moving into the colder months," said the principal consultant at Cornwall, Dr Craig Lowrey.
"Following two consecutive falls in the cap, I'm sure many hoped we were on a steady path back to pre-crisis prices.
"However, the lingering impact of the energy crisis has left us with a market that's still highly volatile and quick to react to any bad news on the supply front.
"Despite this, while we don't expect a return to the extreme prices of recent years, it's unlikely that bills will return to what was once considered normal. Without significant intervention, this may well be the new normal."
Cornwall Insight warned that the highly volatile energy market and unexpected global events, such as the recent escalating tensions in the Russia-Ukraine war, could see prices rise further at the start of the new year.
To avoid this vulnerability, Cornwall Insight said domestic renewable energy production should increase and Britain should wean itself off energy imports.
Kellogg's appears to have shrunk its packets of Corn Flakes.
Two of its four different pack sizes have reduced in weight by 50g, according to The Sun.
What used to be 720g boxes are now 670g, while 500g boxes have become 450g.
The newspaper says the 670g boxes are being sold for £3.20 in Tesco - the same price customers were paying for the larger box back in May.
The 450g boxes are being sold for £2.19, only slightly less than the previous price of £2.25.
Other supermarkets have similar pricing, although in Morrisons the price has gone down in proportion to the size reduction.
The 250g and 1kg pack sizes remain unchanged.
Kellogg's has said it is up to shops to choose what they charge, but Tesco said the manufacturer should comment on pricing.
Sky News has contacted Kellogg's for comment.
A spokesperson is quoted by The Sun: "Kellogg's Corn Flakes are available in four different box sizes to suit different shopper preferences and needs.
"As the cost of ingredients and production processes increase, it costs us more to make our products than it used to.
"This can impact the recommended retail price. It's the grocer's absolute discretion and decision what price to charge shoppers."
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Writing a customer analysis includes extensive research and collecting data from various sources. This data consists of qualitative and quantitative aspects which help you write an accurate customer analysis for your business plan. Let's now understand a step-by-step process to write your customer analysis. 1. Identify your customers
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.
Components of a Customer Analysis. A complete customer analysis contains 3 primary sections: Identify your target customers. Convey the needs of these customers. Show how your products and/or services satisfy these needs. Download our Ultimate Business Plan Template here.
In short, the purpose of customer analysis in a business plan is to align your business strategy with the needs and behaviors of your target market. 6 steps to write customer analysis in a business plan. Now, that you understand why the customer analysis section is important, let's move forward with how to actually write one in 6 simple steps: 1.
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 ...
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 ...
Incorporate Insights into Your Business Plan: Integrate your customer analysis findings into your business plan, including your marketing strategy, product development, and sales approach. By ...
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.
Five steps to running successful target customer analysis. 1. Leverage existing customer data. Existing customers should be the starting point for your research when performing customer analysis. This data source is likely to be your CRM (Client Relationship Management) system, and segmenting it or grouping it by customer characteristics can ...
To write an analysis in a business plan, define your target market, gather relevant data through research, analyze this data to identify trends and insights, and present it using structured ...
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.
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 ...
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
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 ...
A customer analysis provides business owners with in-depth information about their current and prospective customers. This information is crucial as it helps the business people plan and determine the future direction of their businesses. While writing a customer analysis, one is often required to reflect upon the business through customer ...
Step 4: Calculate market value. You can use either top-down analysis or bottom-up analysis to calculate an estimate of your market value. A top-down analysis tends to be the easier option of the ...
2. Recognize your potential target market segment & valuable customers. The second step is to identify your important customers. The customers that are most likely to get attracted to your products should be your focus. Through analyzing customer behavior patterns, you can find your target customers.
How to write a Customer analysis section in your business plan?A customer analysis is an essential section of your business plan, It provides a comprehensive...
Here are six steps you can use to conduct a consumer analysis: 1. Review your industry. This can include a brief historical background of your industry, trends, patterns, an overview of your competitors and the factors that influence the industry. Doing this can help you guide your business or marketing plan. Researching your industry can help ...
Renewal rate = 1 / useful life of a desk. Volume of transactions = total number of desks x renewal rate. Value of one transaction = average price of a desk. Market value = volume of transactions x value of one transaction. You should be able to find most of the information for free in this example.
Sections of your market analysis should include: Industry Description and Outlook. Target Market. Market Research Results. Competitive Analysis. Remember to properly cite your sources of information within the body of your market analysis as you write it. You and other readers of your business plan, such as potential investors, will need to ...
Jennifer Simonson draws on two decades as a journalist covering everything from local economic developement to small business marketing. Beyond writing, she tested entrepreneurial waters by ...
Tips for writing effective AI prompts; Top 33 AI prompts for sales teams; ... With the right AI tools, you can improve your sales processes, benefitting your business and its customers and prospects. Here are some of the best AI prompt ideas to help your sales team excel in various areas, from sales process optimization to competitor analysis ...
Welcome to the Money blog, your place for personal finance and consumer news and tips. Today's posts include a Money Problem on the benefits or otherwise of topping up your national insurance.
Professional Resume Writing Services. Find the plan to land your next job faster. Our services have helped over 1 million professionals land more interviews and get hired faster. 9700+ 5 star reviews. ... We're committed to helping our customers succeed. If you don't get called for an interview in 60-days, your rewrite is on us. ...
Illumina Inc.'s shares fell the most in 10 months after its plan to increase sales through easier DNA sequencing and improved data analysis failed to excite investors, with targets short of ...
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