What is customer analysis?

What is customer analysis?

Hello there my name is Martin Henley, this is the what the series and in this episode number 14 we’re answering the question what is customer analysis and is it customer analysis that holds the keys to all the mysteries of marketing so?

How are we going to effectively define customer analysis?

In addressing the question what is customer analysis there are six things we’ll be sharing with you. We are going to give you two definitions of customer analysis; we’re going to think about what a customer is; we’re going to think about why customer analysis is so important; we’re going to think about what you will learn from your customer analysis and what you do with the results of your customer analysis.

Let’s go Ricky.

Did we find a definition of customer analysis?

As always to address the question what is customer analysis we went looking for a definition and to be fair we struggled to find one. The closest reliable definition that we found is actually a definition of customer analytics from Wikipedia, what they tell us is that “customer analytics is a process by which data from customer behaviour is used to make key business decisions through market segmentation and predictive analytics.” If we change the word analytics for analysis I am perfectly happy with this definition. Customer analysis is the process by which you look at customer behaviour to make key business decisions and we’ll be telling you more about what those key business decisions are later in this article. 

So we were still looking for a definition of customer analysis and we found one at CMGPartners.com. They tell us is that “when you analyse your customers you define who your target market is and decide how you will reach them.” The reason that we’ve lead with the less-good definition from Wikipedia is because I don’t agree entirely with this definition. Certainly you will get important information from your customer analysis but this is a process of discovery this isn’t a process of defining or deciding. Customer analysis is a process of discovering who your target market is, not deciding, but discovering how you will reach others in your target market. What I’m saying here is that you are not deciding anything you’re, not defining anything – you are discovering. We are going to go on to how customer analysis solves the mysteries of marketing but at this point I want to be clear; customer analysis is a process of discovery rather than a process of defining or deciding.

What is a customer?

That brings us to point number three which is what is a customer? The issue I have with this definition from CMG is that they’re saying that we’re defining and we are deciding who our customers are going to be. This sounds a little bit to me like targeting, it sounds a little bit to me like market research – there’s wishful thinking going on here . We actually know a lot about our customers and in our customer analysis we are discovering more about them, who they are and how they behave.

So what is a customer? We went to the Oxford English Dictionary and they tell us that a customer is “a person or organisation that buys goods or services from a store or business.” A customer, and this sounds too obvious for me to be saying it but I am saying it because its important – a customer is somebody who has actually bought products or services from your business. I know that occasionally there’s a grey area, sometimes people buy data from us and then all of a sudden they think they are leads, if somebody makes an inquiry then people might think that they are a customer, even if they’ve had a free taster of your products and services that doesn’t make them a customer. What makes them a customer is having spent actual money with you and what we’re interested in in customer analysis is discovering exactly how that happens.

Why is customer analysis important?

Which brings us then to the question why is customer analysis so important? I can give you three very good reasons. 

The first reason is that we’re dealing with customer analysis here is because it is real. Not like when you do your marketing analysis and you are hoping a certain type of person might buy from you, we are dealing here with people who have actually put their hands in their pockets and given you money for the products and services you provide. This is a real thing that we’re talking about when we are dealing with our customers and conducting customer analysis.

The second reason is customer analysis is important is about accessibility. That works on two levels. Firstly, you have access to these people – if they bought your products and services you will probably have their email address you, might have their social media tags, you might have their telephone number, you have access to these people like you don’t have access to the other people who might be in your market.

The second accessibility is about data. If they have been buying from you you will have a record of their behaviour on your systems. Your customers are doubly accessible, you can access your customers and information about their behaviour much more easily than you might be able to access somebody who isn’t yet a customer.

The third good reason for investing in customer analysis is that it is customer analysis that holds the keys to the mysteries in your business. If you start marketing from scratch and you don’t have customers then you have no idea who might buy from you, why they might buy from you, where they might buy from you. It is customer analysis that will give you the answers to those really important questions and will be the key to your future marketing success.

What will you discover through customer analysis?

So hopefully you’re hearing me and you’re thinking yep, customer analysis sounds like a really exciting opportunity for me and my business but what exactly am I going to learn from conducting customer analysis?

Customer analysis is going to give you the answers to some really important questions for your marketing. Questions like who buys from you; who do they know who could also be buying from you; who else do they buy from; what is it that they need; what is it that they buy; what else is it that they could be buying; where do they buy; when do they buy – is there a cycle to how they buy; how do they buy – are they happy to buy online; do they need some kind of demonstration; do they need to come and find somebody in a retail outlet and the most important question of all is why do they but. If you can understand the motivation of your existing customers and what motivated them to buy from you then you just need to form that into messages and land those messages on people like them and your marketing will be so much more effective.

What do you with the results of your customer analysis?

Which brings us then to point number six which is the question what do you do with the results of your customer analysis? 

You will remember at the beginning I was upset that CMG Partners were telling us that what customer analysis enables us to do is define who our target market is and decide how you will reach them. What is actually going on with customer analysis is that you are discovering the answers to all of these questions. When you ask the question who is it that buys from you then you can start to build up a picture, or a profile, of the sort of people who benefit from your products and services so. Customer analysis isn’t about deciding who your target market is, customer analysis is about discovering who your target market is. For example, when you find out the question to where and how they buy that will inform where you are going to position your products. What this information does is this informs you of who you should be targeting, how you should be pricing, where you should be putting your products and services and which products you should be developing in the future. 

Rather than a process of defining and deciding, customer analysis is a process of discovery – this is a process of understanding the mysteries of your business and your marketing. The mystery of your marketing is who the hell is going to buy from me, how the hell again are they going to buy for me, what are they going to be prepared to pay, when are they going to buy from me and how happy are they going to be. 

Now, the only question we haven’t answered in this video is how you do customer analysis and that will be the subject of video number 15 What is customer satisfaction?

Did we define customer analysis effectively?


If you are still with us well done. You now know what customer analytics is and you know what customer analysis is, we’ve had half a definition from Wikipedia and half a definition from CMG Partners; you understand exactly what a customer is – there’s no mystery there; you know exactly why customer analysis is so important; you know what you are going to learn from your customer analysis and you know what you are going to do with the results of your customer analysis.

What should you do if you found this interesting or useful?

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We are done here Ricky.

Martin Henley

Martin Henley

Martin has built a reputation for having a no nonsense approach to sales and marketing and for motivating audiences with his wit, energy, enthusiasm and his own brand of audience participation.

Martin’s original content is based on his very current experience of running effective marketing initiatives for his customers and the feedback from Effective Marketing’s successful and popular marketing workshops.



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