Understanding the Customer Analysis Section
Business Plan Research

The customer analysis part of your business plan is used to assess the customer aspects that your business serves. In your customer analysis, make sure you address these THREE key areas:

  1. Identify your target customers
  2. Convey the needs of your customers
  3. Demonstrate how your services and products satisfy your customers’ needs

The first thing you should consider when writing your customer analysis is to define which customers your business is serving. You need to be very specific. It is not a good idea to be too broad and say that you are targeting small business owners, for example, because there are millions of small business owners. To make your business plan more professional, identify exactly which customers you are serving. For instance, you might say you're targeting "small business owners with less than 30 employees in large metropolitan cities on the East Coast".

Once your business plan has clearly defined your company’s target customers, you should explain the demographics of your customers. Answer the following questions:

  1. How many potential clients or customers fit within the definition? Is this particular client or customer base increasing or decreasing?
  2. What is the average income or revenue of these customers?
  3. Where are these clients located geographically?

Once you explain these customer demographics, your business plan should detail the needs of your customers. You can demonstrate this by using past actions, future projections, or implications.

Your business plan should also detail the key drivers of customer decision-making. Questions you should answer include:

  1. Do your customers find the price of your product to be more important than the quality of your product?
  2. Are your customers seeking the highest level of reliability? Will your customers have their own support and seek a basic level of service?

The final aspect of the customer analysis is showing that you understand the actual decision-making process. A few questions you should answer include:

  1. Will your customer consult others before making a decision?
  2. Will your customer seek multiple bids?
  3. Will your product or service need significant operational changes? Will your customer need to invest time to learn any new technologies that you implement?

A successful marketing strategy relies on your total understanding of the customer analysis. Sophisticated lenders and investors require complete profiles of your company’s clients and target customers. Spend the necessary time researching and analyzing your target customers. This way, you will develop and enhance your company’s strategy as well as your funding success.

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