The Customer Analysis section of the business plan assesses the customer segments that the company serves. In it, the company must 1) identify its target customers, 2) convey the needs of these customers, and 3) show how its products and services satisfy these needs.
The first step of the Customer Analysis is to define exactly which customers the company is serving. This requires specificity. It is not adequate to say the company is targeting small businesses, for example, because there are several million of these types of customers. Rather, the plan must identify precisely the customers it is serving, such as small businesses with 10 to 50 employees based in large metropolitan cities on the West Coast.
Once the plan has clearly identified and defined the company's target customers, it is necessary to explain the demographics of these customers. Questions to be answered include: 1) how many potential customers fit the given definition? is this customer base growing or decreasing? 2) what is the average revenues/income of these customers? and 3) where are these customers geographically based?
After explaining customer demographics, the plan must detail the needs of these customers. Conveying customer needs could take the form of past actions (X% have purchased a similar product in the past), future projections (when interviewed, X% said that they would purchase product/service Y) and/or implications (because X% use a product/service which our product/service enhances/replaces, then X% need our product/service).
The business plan must also detail the drivers of customer decision-making. Sample questions to answer include: 1) Do customers find price to be more important than the quality of the product or service? and 2) are customers looking for the highest level of reliability, or will they have their own support and just seek a basic level of service?
There is one last critical step in the Customer Analysis -- showing an understanding of the actual decision-making process. Examples of questions to be answered here include: 1) will the customer consult others in their organization/family before making a decision?, 2) will the customer seek multiple bids? and 3) will the product/service require significant operational changes (e.g., will the customer have to invest time to learn new technologies? will the product/service cause other members within the organization to lose their jobs? etc.).
It is essential to truly understand customers to develop a successful business and marketing strategy. As such, sophisticated investors require comprehensive profiles of a company's target customers. By spending the time to research and analyze your target customers, you will develop both enhance your business strategy and funding success.
As President of Growthink Business Plans, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.
One of the biggest fears people have about starting a... Read More
TRUTH IN THE LAWN MOWING INDUSTRYWe do not wish to... Read More
Get maximum results with minimum effort. Sounds great doesn't it?... Read More
"What do you do?" It just might be one of... Read More
If you are a franchisee of a large franchise system;... Read More
How far away is the person you need to meet?We... Read More
Why should you do informative talks to smaller groups?Informative talks... Read More
One of the first things you will need to set... Read More
If you're starting your own business or currently work for... Read More
As long as you eat and breathe you will stay... Read More
Running a small business requires many skills. However, to do... Read More
While there are few career paths that some would call... Read More
It's just like a marriageTo expect a bank manager or... Read More
Cash is King... That is what everyone tells us and... Read More
Large corporations use employee manuals to both educate employees about... Read More
Over the years I heard the best way to learn... Read More
Remember the cleaning business is all about time ratio to... Read More
Sometimes when you run a business you feel as lonely... Read More
When do annoyances in a relationship become too much to... Read More
Owning a business is a challenging endeavor. If you're like... Read More
Small business owners can relieve a lot of their own... Read More
Why does a good business relationship rely on having some... Read More
What's your job profitability? Do you know?Many business owners are... Read More
Doesn't it frustrate you when you've given good service, sometimes... Read More
"So what?" is a lovely question.It can lead to a... Read More
When pressure washing heavy equipment each piece of equipment has... Read More
This year, some 700,000 American businesses will be sold. Most... Read More
We have all seen the mobile washing units cruising our... Read More
Debt collection letters--an overview"Debt collection letter" in the singular may... Read More
Setting priorities in your business? Your first job is to... Read More
How is your pipeline structured?I assume most of you have... Read More
What is Business Valuation? The term business valuation is the... Read More
A Private Investigator is a professional trained in the art... Read More
How do you find the best business partners?Finding a good... Read More
Would it help you as a real estate investor to... Read More
Many auto detailers fall short in their sales presentations. I... Read More
Many small businesses do quite well due to the blood,... Read More
Why does research and education play an important part of... Read More
One of the first things you will need to set... Read More
As an entrepreneur you can learn a lot by following... Read More
If you really want to earn more money with your... Read More
If you're looking for start-up capital for your business, but... Read More
Have you ever heard the phrase, 'PREPONDERANCE OF PROOF'?I recently... Read More
Pardon my enthusiasm, but a large part of your small... Read More
I've got good news and bad news. The good news... Read More
1. Everyone Makes A Difference ? Despite not letting him... Read More
You'd like to go into business for yourself, and believe... Read More
You know your prospects need what you sell. You know... Read More
When starting a business, you have to determine the method... Read More
Remember those drawings from science class of how a lever... Read More
Business card size works well for invitations to special events.What... Read More
Ok, you have successfully accomplished your dream of being the... Read More
What is the satisfaction & expectation review of the business... Read More
Most doctors never distinguish the difference between customers and patients.... Read More
Multimedia is everywhere on the Internet, whether in the form... Read More
Don't you find that there are so many decisions you... Read More
You are probably hard at work promoting your business (and... Read More
$elling $elling $ellingWhat makes a great sales person? Well, the... Read More
Hi, Charles...here, Your Cap and t-shirt guy From Texas. How... Read More
1. Have A Strong Constitution ? Justices deliver decisions by... Read More
Everything starts with a business plan: If you don't have... Read More
If you have a busy private practice, chances are you... Read More
Writing a business plan for your Solo Entrepreneur business doesn't... Read More
The Operations Plan is a critical component of any business... Read More
Q: A friend told me that as a woman of... Read More
Large corporations use employee manuals to both educate employees about... Read More
Small Business |