Customer Analysis Definition, Benefits, Types, with More.

Customer Analysis Definition, Benefits, Types, with More.

Building relationships with customers and effectively marketing products and goods are two challenges many businesses have in common. The only way to excel at both is to understand who your prospects, leads, and customers are.

Once you know their pain points, needs, preferences, and expectations, you can do wonders with your marketing and sales strategies. However, to do it, you need to carry out research commonly known as customer analysis.

Let’s see the customer analysis definition, why it’s essential to do it, and how to do it properly.

Customer analysis definition

The customer analysis definition is a straight one:

“Customer analysis encompasses quantitative and qualitative customer research techniques deployed to help you better understand your potential and current customers.”

A company can deploy different research methodologies to develop a unique customer analysis strategy. In either case, the goal is to generate reports a company can use to get actionable insights and use them to improve outreach and marketing efforts, services, products, and customer relationships.

The goal of customer analysis is to identify your customers’ pain points, needs, the best marketing channels to reach them, the optimal messaging, and what makes your product and services relevant. With that in mind, you should know that you have the option to use different customer analysis types.

Customer analysis types

While segmentation is one of the most common customer analytics techniques, companies can use two different customer analysis types. A customer analysis type stands for how you look at your customers.

You can choose to assess their behavior or collect their demographic information. Your choice will determine the types and scopes of insights you can get from the research report.

One of the customer analysis types is a so-called customer behavior analysis. You can do it two ways – understand your customers’ buying decisions or discover their purchasing patterns.

Understanding customers’ buying decisions includes:

●       Identifying the features of your products or service that your customers appreciate the most;

●       Your customers’ needs that currently lack adequate services in the given market;

●       The prices they expect to see on your products and services’ price tags.

Discovering your customers’ purchasing patterns is another way to analyze customer behavior. This time, you focus on finding the products and services they buy and how often they purchase.

Other relevant information that customer behavior analysis provides includes the average time between two purchases and how customers buy products (online, over the phone, or in-store).

The second type of customer analysis refers to creating a customer demographic profile. Demographic information includes age, gender, income, educational level, and location.

In B2B markets, this information is firmographic data, including company name, industry, number of employees, location, and growth trends.

Both customer behavior analysis and demographics can help you segment your customers by different criteria and succeed in customer analytics. Now’s a good time to discuss the benefits of customer analysis as they can help you understand the importance of doing it.

Benefits of customer analysis

Now that you understand the customer analysis definition and different types, it’s time to see what you have to gain by doing it.

The most notable benefit of customer analysis is improved marketing strategy. Once you segment your customers, you will have segments that share unique needs and preferences.

You can personalize your marketing strategies, including messaging, to communicate the relevant values of your products or services. As a result, you can improve marketing efficiency, enhance lead generation, and boost conversion rates.

Customer analysis can also help you improve customer retention. When you truly understand your customers, you can meaningfully address their needs, boost satisfaction rates, and prevent customer churn.

Since customer analysis empowers you to target particular segments with specific strategies, you can expect reduced marketing costs. More importantly, you will reduce customer acquisition costs, positively affecting your bottom line.

Informed product or service improvements is another benefit customer analysis delivers. You can find out which features and service perks your customers value the most, which you might need to improve, and which have no impact on purchasing decisions.

How to improve your customer analysis efforts

You can obtain the most valuable data for customer analysis through your marketing channels and CRM platform. Unfortunately, that is a too-small sample for business analytics and decision-making in most cases.

You need to collect more data to truly understand your customers and end up with segments that share the same characteristics and behavior patterns. You have two options for that.

First, you can extend your research to collect more valuable data through surveys, web scraping, and social media listening.

You can also enrich your database with customer data from a third-party company. If you decide to use data provider services, you can choose the relevant database that is accurate, up to date, and compliant with data privacy laws and regulations.


As you can see, the customer analysis definition is not too difficult to understand. The quality of insights and your ability to make intelligent business decisions depends on the quality and scope of data you have at your disposal. Whether you focus on demographics, customer behavior, or both, the more information you have, the better.

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Johnny is dedicated to providing useful information on commonly asked questions on the internet. He is thankful for your support ♥

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