How to Write a Customer Analysis

You’ve conducted market research into potential customers—developing a deep understanding of industry dynamics and the size of your market.

Hopefully, you’ve also interviewed potential customers—learning about their behaviors and needs, and digging into publicly available data to support your research.

But you still need to document these findings in a way that gives you an actionable road map to grow your customer base.

A well-written customer analysis can be extremely useful.

Including a customer analysis in your business plan identifies your target customers, their needs, and how your product or service addresses these needs.

Customer analysis vs market analysis

A market analysis explores the market and potential customers. A customer analysis zooms in on the specific characteristics of individual customer segments in your target market.

The market analysis includes details like the number of customers you hope to serve and the types of competitors you must contend with.

By contrast, the customer analysis looks at the attributes of your potential customers – their habits, values, beliefs, and other characteristics that might affect their purchasing decisions.

What should a customer analysis include?

Demographics

Some early information you’ve collected about your customers includes:

  • Age range
  • Gender/ethnicity
  • Income level
  • Geographic area
  • Education level
  • Employment

Example: Suppose you own a business that creates an environmentally friendly cleaning product. Your customer demographics might include:

  • Age range: 30-60 (old enough to have used a variety of cleaning products in their homes)
  • Income: Above average (more likely to buy a higher-priced alternative to discount cleaning products)
  • Education level: college degree or equivalent (high enough education level to understand the product’s societal benefits)
  • Employment: full-time employee

Values and beliefs

This section captures the psychological and emotional factors that influence customer behavior.

  • Lifestyles
  • Cultural backgrounds
  • Ethical values

Let’s return to the environmentally friendly cleaning product example. You are more likely to attract customers who prioritize sustainability and are willing to pay more for products that match their values.

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Buying behaviors

Analyzing buying behaviors involves understanding how, when, and why customers purchase. These behaviors impact:

  • The channels customers prefer for shopping
  • Price sensitivity
  • Factors that trigger a buying decision

Example: Suppose you’re running an environmentally friendly cleaning products business. In that case, you might discover that most of your customers buy their products from a magazine for homeowners or that they typically buy multiple products simultaneously.

Technology use

Nearly three-quarters of small businesses have a website. Your customers are, without a doubt, browsing the internet.

So it’s critical to understand how your target customers interact with technology and to set up an online presence for your business if you aren’t already active.

Key questions about customers’ technology habits include:

  • Are they active on social media? If so, which platforms?
  • Do they prefer online shopping or in-store visits?
  • Are they more likely to respond to email marketing, blog content, or social media campaigns?

Example: Let’s say you discover that significantly more of your target customers visit websites like yours on a smartphone than a desktop. In that case, it would be important to optimize your website for mobile viewing or develop a user-friendly app.

5 steps to write a customer analysis for your business plan

Now that we understand the individual pieces of a customer analysis, we’ll examine how to write a customer analysis for your business plan.

1. Use existing data

There are likely numerous sources of data published by government agencies, private industry, or educational institutions that could be relevant to your business.

Finding existing data is the best starting point for your customer analysis. It’s easy to find, regularly updated, and immensely valuable for providing context for your research.

For instance, if your target demographic is people between 30 and 60, Census data can help you determine the number of residents in your selling area within that age range.

We’ll look at some examples of publicly available data for businesses operating in the United States.

U.S. Census Bureau

The Census Bureau publishes official population counts for the country, states, and local communities. Census data includes useful data for businesses, such as the total number of businesses, employment counts, and average incomes in local communities across the country.

Bureau of Labor Statistics

Data from the Bureau of Labor Statistics tracks changes in the U.S. workforce and the overall state of the labor market. The BLS publishes the Consumer Price Index, tracks consumer spending, and gauges overall consumer confidence.

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Examining this data can give you insights into the willingness of consumers to pay for your product or service.

Bureau of Economic Analysis

The BEA takes a broader look at the performance of the U.S. Economy. You can use BEA data to find personal income and corporate profit data by industry.

If you make a product or service used by other businesses, these figures can help you understand the financial health of the broad customer base you’re targeting.

Federal Reserve

The Federal Reserve publishes various financial reports, such as consumer credit and spending statistics, as well as the health of banks.

This data can give you important context about the financial health of your customers, which could help you determine pricing strategies—like whether you should offer flexible payment plans.

Industry associations

Thousands of private sector industry associations exist in the United States alone. These organizations not only advocate for businesses in their field but also provide members with helpful information, such as “state of the industry” reports and business surveys.

You should leverage customer data from these peer organizations as a business owner.

Academic institutions

Many university business schools make their research publicly available online. Scholars make a career out of researching market and industry trends, and much of their work is available through online searches.

2. Review customer feedback

Reviewing customer feedback directly shows an understanding of your customers in your analysis. If you’re a new business without direct customer feedback, look around at what people are saying about your competitors. You might find common complaints from customers in your industry about the products available.

You can then reach out and interview potential customers to better understand their needs.

3. Use third-party data

So far, we’ve discussed free, publicly available sources to find information about your customers.

But for those willing to dig deeper, third-party data providers can help you uncover unique information about your business and customers.

Google Analytics

Third-party data providers like Google track the activity of users across numerous websites. Google Analytics, for example, provides demographic and geographic breakdowns of your visitors, as well as insights into how they interact with your site.

Google Trends is a powerful tool to discover what people are searching for online.

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Social media metrics

Social media companies make their data available to businesses. Platforms like Facebook Audience Insights give insights into the types of people who engage with your business.

Third-party tools like Hootsuite, Sprout Social, and Buffer track metrics across social media platforms.

Adding social media metrics to your customer analysis provides instant feedback about how customers interact with your business.

Specialty tools

Software companies have created tools that collect and analyze customer data from various online sources. These tools provide insights that would be time-consuming to get directly from customers.

Audience research tools like SparkToro and FullStory analyze large amounts of data online and spot trends relevant to your business.

4. Create a customer persona

After gathering and analyzing all this data, create a customer persona—a semi-fictional representation of your ideal customer based on your collected data.

For example, a customer persona for an environmentally friendly cleaning products business reflects that audience’s demographics, behaviors, and needs.

How to Write a Customer Analysis for Your Busines Plan

Creating a persona can focus your marketing efforts and help determine your customer base and how to prioritize your resources. It also shows potential investors that you understand your target audience.

Including a problem and solution statement in your business plan is a good way to start, as successful businesses identify a problem and provide a solution.

As you conduct your customer analysis, ensure it is grounded in the problems they’re experiencing. This will validate your product or service as the solution they need.

A customer analysis is a crucial part of any business plan. offers a free business planning template to help you create a lender-ready plan faster. You can also find over 550 free sample business plans for inspiration and guidance in your industry.

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