Target Customer Analysis: Benefits/Uses of Target Customer Analysis.
The purpose of conducting customer analysis as part of a business plan is to thoroughly examine customers who can purchase your product or service. Brands can establish different groups of customers and the needs of those customers. By understanding what motivates them to buy, brands can build their businesses to meet those needs.
You can learn more about your customers in various ways and a combination of research methods will give you the most accurate results. It is better to collect as much information as possible and it is irrelevant not to get into the details of ideas.
Characters such as age, gender, location, demographics, and psychology are all important, but their interests, other brands, publications they read, etc. are also important.
What Data Do You Need for Customer Analysis?
Now that you know its overview, it’s time to move on to data that will help you analyze customers. There is a lot going on in the customer journey with your business, but here are some metrics that can help you shape your customer analytics – most of these are readily available on Aasa Technologies.
- Demographic data such as name, gender, age, income, geographical location, and lifestyle
- Best-Selling Channels – E-Commerce, Brick and Mortar or Both
- Successful interaction with email, social media, and advertising campaigns.
- The amount they spend for the life of your company/customer.
- Their average order value – how much they spend per purchase with you
- How they originally did their business
- Order Information – Products purchased, dates, how often they were purchased, and when they were last purchased
- Cart Disclaimer Notice – Total number of products and price drop
- Information about reward/loyalty events such as when they nominated and when / how they completed their awards
- What they prefer? discount codes or full-price items
These data points can come from many different sources – your e-commerce cart, your retail location, your marketing channels, customer loyalty, and support platforms, and more – so it’s important that all the data is easily in one place.
Benefits of Target Customer Analysis:
1. Target Cost Reduction:
Target costing is not just a method of cost determination, but a management technique in which prices are determined by market conditions, taking into account many factors, such as homogeneous product, level of competition, for the end customer. No / low switching cost etc.
The main objective of target costing is to enable management to use proactive cost planning, cost management, and cost reduction practices where costs are planned and calculated early in the design and development cycle rather than in product development and later stages of production are performed.
2. Save Money:
Understanding customer purchasing decisions is the key to increasing sales. Use customer analysis to identify factors that have both positive and negative effects on sales. This includes shipping time, how customer service interactions are handled, whether you have a minimum order or a bundle discount, or the customer’s location or income.
3. Customer Retention.
Getting customers is expensive, so it is important to understand what causes customers to leave. Customer analysis can help you identify a common denominator among lost customers and give you an early warning that existing customers may be in danger of leaving if you do not take corrective action.
4. Rate of Conversion.
Once you get to know your customer, tracking retention is a matter of determining the average duration between a customer’s first and last order and how many customers have not placed a second order. To improve your retention rates and time, you can mine the data to see trends that sustain different customers over the long term versus the short term.
The more you understand your customers, the better you will be able to predict and meet their needs, and an increase in sales will occur naturally.
5. Improve ROI:
Simple ROI is easy to do, but it is loaded with a very big assumption. This assumes that the overall month-to-month sales growth is directly due to the sales campaign.
For ROI to have any real meaning, it is important to compare. Monthly comparisons – sales from the business line, especially in the months before the campaign starts – can help show the impact more clearly.
However, to really get the effect, you can be a bit more critical. Using the sales campaign lead-up, you can calculate the current sales trend.
6. Building Trust:
According to a study by the consumer segment, consumers value a brand with openness, relevance, empathy, experience, and emotion.
Brand performance on these measures predicts loyalty outcomes and is clearly related to profit (ROI) and revenue growth.
Building trust depends on the quality of your customer service. Is it consistent and transparent with your customers?
Your customers are just like you. When we go out for dinner we are always looking for good service. You are going not only for the food, but also the taste, quality, and hospitality. This is what everyone wants when working with product support!
7. Customer Segmentation:
Customer segmentation is the process of dividing customers into groups based on common characteristics so that companies can market each group effectively and appropriately.
In business-to-business marketing, a company can segment customers according to a variety of factors, including:
- Number of Employees
- Products previously purchased from the company
In business-to-consumer marketing, companies often segment customers by demographics including:
- Marital Status
- Location (Urban, Suburban, Rural)
- Standard of living (single, married, divorced, retired, etc.)
Segmentation allows marketers to improve their marketing efforts for a subset of different audiences. These efforts may be related to communication and product development.