Analyzing your customers: Marketing Foundations

[Reyed Mia (Apprentice, DIU)]

Analyzing your customers: Marketing Foundations

Marketing is about acquiring and retaining customers. So, you absolutely have to have a thorough understanding of who they are, where they are, what they believe about your products and services, and how they go about purchasing them. Good customer analysis starts with deciding on exactly what is as customer. How you define a customer will have a big impact on how you go about reaching them. You can define them very broadly or you can make the definition very narrow and specific.

For example, let's look at the market for wallets. A broad definition of a customer would be anyone who has a need to carry money or credit cards. In that case, just about anyone is a potential customer. You could be more specific and define it around purchase behavior. A customer is anyone who's going to replace their wallet within a year. You can even be more specific and define a customer around their attitudes and brand loyalty.

In that case, you might say a customer is anyone who uses a specific brand of wallet and would recommend it to others. With this definition, we have fewer total customers, but now we have a very focused and identifiable group of people to market to. Once you define a customer, you need to understand what's going on in their minds in terms of what's important to them and what perceptions they have about your products and services versus the competition. Customers buy things for a variety of reasons.

But some are more important than others. If you know what's most important to them, you can appeal to that need when trying to get them to buy, or you can try to raise the sense of importance they place on another factor. You also need to measure how they rate your product versus others and how it delivers each benefit. They may have misperceptions that you need to change. You may be able to emphasize a key feature of your product that is better than the competition.

This analysis would be critical later when you begin segmenting customers. For our wallet example, let's imagine we did some marketing research and created this customer analysis. We ask customers to rate the importance of each buying factor on a scale of one to ten, where ten is the highest. We also ask them to rate their perception of each brand of wallet and how it delivers on that buying factor on a scale of one to ten. Let's find out what we can learn from this analysis.

First, the buying factor of slimness is rated the highest and that's good news for a manufacturer of wallets that are slim. Because they're perceived by customers as being the best at making slim wallets. But notice, this hypothetical company is not rated the highest in every buying factor. For example, with capacity, the competition's wallet is perceived as holding more stuff, and having more color choices. Prices also rated higher for the competition.

Meaning, they're perceived to have a lower priced wallet. What this means for our hypothetical company is, they need to stick to their primary claim of slim. And avoid making comparisons to the competitors where they're not as well rated. In many ways, great marketers understand their customers better than they understand themselves. A solid customer analysis prepares you to develop solid marketing strategy.

https://www.linkedin.com/learning/marketing-foundations/analyzing-your-customers