A lot of sales teams with impeccable sales methods often record below-par results. It is not because of the lack of efforts they put in, but their strategies. For successful sales, the first and foremost thing you must do is, understand your customers, and prepare your sales strategy accordingly. To do that efficiently, you should conduct a thorough customer analysis.
With customer analysis, not only will you be able to understand your target audience better, but it also increases your team’s chances of getting more deals done.
Indeed, for analyzing your customers, a collective view of all their data is a valuable asset. However, gathering all customer data stored in different silos can be a chaotic task. For a handful of clients, you can manage it manually, but when the number of customers rises, you can employ technology to your benefit.
Think CRMs, sales automation software, marketing software, and so on. They form a strong core of any forward-thinking sales team. But it is still what it is – an important step out of many.
What matters most is if you’re selling your product or service to the right people. For this purpose, customer analysis enables you to get through the vagueness and act deliberately on the information available to people using your service.
Let’s look at some ways in which customer analysis can benefit your team in the long run.
What is Customer Analysis?
Customer analysis is the systematic process of gathering and evaluating data about customers. This data can come from a variety of sources, including surveys, website analytics, CRM systems, and customer service interactions. By using qualitative and quantitative data analytics, you can gain valuable insights into your customer’s behavior and preferences, including:
- Who are your customers: demographic factors like age, language, geography, and other
- How do they engage with your brand: Channels they use like social media, website, search, ads, or others that help them find out about your brand
- What do they like about your brand: Buying preferences, needs, and other patterns that help identify which product or services are the best fit for your customers
This knowledge helps you to make informed decisions regarding product development and marketing to sales strategies and customer service, making you a more customer-centric brand.
5 Ways Customer Analysis Can Increate Sales
1. Customer Analysis Exposes Customer Behaviour
When customers visit your website, for instance, they do so for a particular reason. Knowing why they do so gives you leverage in selling your product or service to them. On a larger scale, it helps you in your segmentation and, most importantly, your messaging.
This is because the needs of each customer vary. For example, if your team sells insurance policies, you most likely have more than one or two portfolios like car insurance, health insurance, and home insurance. As a result, you don’t want to push an email selling car insurance to someone who needs home insurance. Procedures like customer analysis help you to know what each person potentially wants by merely looking at the data available.
Additionally, with easily accessible data in one place, you can study all your interactions with the customers. This will help you to identify the methods to which your customer is highly receptive. So with this, you can revamp your operations and provide a remarkable customer experience.
2. Customer Analysis Helps You Target Customers Better
Marketing campaigns on platforms like Facebook, LinkedIn, Twitter, and Email can be hit or miss when it isn’t done correctly. Part of the benefits of customer analysis is the increased ability to get insights into what is working and what is not.
Since you have a warehouse of customer information sitting in your sales pipeline, you can quickly analyze this to get helpful information like where most of your customers are from, which sales copy brings the most traction, and the product in your portfolio generating the highest interest.
All of these come together to inform whatever sales and marketing campaign you’re launching next, as opposed to flying blind with no data to back you and your team.
3. Customer Analysis Shows Your Ideal Customers
With customer analysis, you have a clearer view of your demography, which is an important part of any marketing strategy. If you run a business in India for instance, there is a high probability that this is where most of your audience will be found. You can even dig deeper to see what category of audience fits the mold of your ideal customer.
For instance, a married person is more likely to purchase a life insurance policy than someone who is still in college. Having someone in the latter audience in your customer base might then be redundant if your niche is life insurance.
In essence, customer analysis tells you WHO you should be selling to. This way, your team members won’t spend time chasing a customer that would end up not contributing a dime to your ROI.
4. Customer Analysis Allows you to Forecast Better
Most successful teams are like that because they can predict what is going to happen in the business later. Through customer analysis, they look at the buying behavior of customers over time, their current status, location, etc. As a result, they’re able to make better decisions on marketing campaigns, sales strategy, tools, and everything else that can make these goals easier to achieve.
For you, this means taking great advantage of the data that is at your disposal. It can be a more efficient path to increasing your sales volume.
5. Customer Analysis helps you Retain More Customers
A lot of companies – about 82% – are now investing in resources to meet the changing demands of customers, hiring technical marketers to extract insights from raw customer data. This is to tell you how customer retention is just as important as getting new customers.
For instance, not personalizing communication with your customers can make them leave your company for the competition. According to the 2024 State of AI & Personalization in Marketing Report, 52% of marketers believe personalization tactics significantly improve the company’s ability to generate revenue.
This has also become increasingly important because only a handful of customers complain about issues like this instead of making that sudden switch. Customer analysis helps you to get out of this bubble. It can help you understand customers’ pain points, what interests them, as well as important information like their preferred means of communication.
3 Steps to Conduct an Effective Customer Analysis
Customer analysis helps you gain several insights into your customer’s behavior and preferences, but what truly matters is how well you are able to harness this data. Since customer data is often collected from multiple data points and is used in different areas, you need to have it all in one place to gain accurate insights. So, the 3-step process that we recommend for effective customer analysis is as follows:
Step 1: Gather your Customer Data
The first step is to gather as much information as you can about your customers. This can go beyond simple market research or generating sights from direct surveys. Instead, you can explore passive data collection mechanisms like:
- Website Analytics: Use tools like Google Analytics, Hubspot, or others to gain insights into customer behavior on your website, such as browsing patterns and conversion rates. You can identify which products or pages are most popular, where customers drop off in the buying journey, and how they interact with your website.
- Social Media Listening: The power of social media is immense! By monitoring brand mentions and customer conversations on platforms like X ( formerly Twitter) and Facebook, you can tap into a wealth of customer sentiment. This helps you identify emerging trends and gain valuable insights into what people are saying about your brand. Your role in understanding and shaping customer sentiment is crucial for the success of your products and services.
- Customer Reviews: Analyzing online reviews and feedback left on your website, review platforms, or social media is like uncovering a treasure trove of information. This wealth of data provides insights into customer satisfaction, product pain points, and areas for improvement.
Step 2: Segment Your Customers
Once you have gained insights into your customer data, you have to segregate using multiple parameters. The idea is to ensure that you can segregate your entire customer base using multiple factors, so that you can build more personalized and relevant communciations or campaigns for each target group.
The segmentation of your customers can be based on factors like:
- Demographics: Age, location, and income can reveal buying habits and preferences.
- Purchase Behavior: Analyze the frequency of purchases, the amount spent, and product preferences to identify high-value customers or those ripe for upselling.
- Needs & Interests: Surveys or website behavior can reveal customer motivations and interests, allowing you to tailor messaging accordingly.
- Customer Lifecycle Stage: Are they new customers, loyal repeat buyers, or at risk of churn? Understanding their stage allows you to personalize the customer journey.
Step 3: Connect Customer Needs to Your Brand
After segmenting your customers, you need to make sure that you have proper insights into what can appeal to them. For example, if you are an apparel brand, the kind of clothes that a milennial audience will buy is very different from one that will appeal to Gen-Z or other segments. Knowing the preference and unique requirements of each audience is key to making appropriate suggestions and creating outreach campaigns that appeal to them.
For this, you need to use advanced tools to help you analyze custom information, such as:
- Data Visualization Tools: Charts and graphs make complex customer data easily digestible. They allow you to identify correlations, buying patterns, and areas for further exploration.
- Statistical Analysis Tools: For larger datasets, consider advanced statistical analysis tools to reveal more complex relationships within your customer data.
- Customer Relationship Management (CRM) Software: Ultimately, CRMs can be your best bet for gaining detailed insights into their preferences, wants, and trends. Many CRMs offer built-in analytics features to generate reports, segment customer data, and uncover hidden insights. This can be valuable to help you build relevant campaigns and target each customer based on select factors, which has a higher chance of conversion.
Customer Analysis Using A CRM
As a tool that helps you manage the relationship with your customers and leads, CRMs are one of the essential tools any sales team can have.
We have listed a couple of ways customer analysis benefits your team. However, executing this can be easier with the use of a CRM. If you already have one, check if your CRM has this feature. Most platforms enable you to categorize your leads based on how they’ve interacted with your digital assets. This way, you can also personalize your communication with customers and leads without mixing things up.
Ultimately, the ideal CRM also comes with a customer analysis feature that helps you perform an in-depth analysis of your lead sources, site visits, customers, demographics, etc. This information is often presented in an easy to read dashboard, ensuring that you have everything you need about your prospects and current users.
Do it with LeadSquared
Now that we’ve established the importance of customer analysis to potentially increase your sales volume and how CRMs can help you do that efficiently, look no further than LeadSqaured’s CRM software. Built with the peculiar needs of different industries in mind, the platform can help you understand and serve your customers better than ever before.
FAQs
Customer analysis is essentially the art of understanding your customers better. It involves gathering data about their demographics, buying habits, and preferences and then analyzing that data to uncover valuable insights.
Yes, By understanding your customers’ needs and wants, you can tailor your sales approach to resonate better with them. This can involve personalizing your marketing messages, identifying upselling opportunities, and optimizing your product offerings based on customer feedback.
There are several data points that can help you with customer analysis. This includes – demographic information, purchase history, website behavior (through website analytics), social media preferences, customer feedback (surveys, reviews), and other customer acquisition channels.
Absolutely! Even basic data like website traffic or feedback from a short survey can provide valuable starting points. You can always expand your data collection efforts as you go.
The answer depends on your specific requirements and industry. For example, if you are a company that has multiple products with a diverse audience, you should ideally conduct customer analysis on a quarterly or monthly basis to understand which products or services are getting the maximum attention or gauge changing audience preferences. For others, with a fixed target market, a quarterly or annual customer analysis can also work.
