Introduction to Customer Analysis

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Management Consulting Training
Introduction to Customer
Analysis
Get Customer
Data
Segment
Customers
and Derive
Insight
Evaluate
Customer
Relationship
Strategy and
Customer
Value
Develop
Value
Proposition
Build
Appropriate
Customer
Experience
Technology

2This document is an exclusive document available to Flevy Pro members - http://flevy.com/pro
The objectives of this deck are to give an introduction to our consulting
approach to customer analysis
Presentation Overview
In this deck, we introduce a 5-phase approach to Customer Analysis:
Get Customer Data
Segment Customers and Derive Insight
Evaluate Customer Relationship Strategy and Customer Value
Develop Value Proposition
Build Approach Customer Experience
This presentation will focus on the first phase: Get Customer Data. Topics
include the types of data (primary vs. secondary), data collection tools, and
segmentation types.
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Customer analysis is a key part of the data gathering and analysis phase
of problem solving
Management Consulting Problem Solving Process
Form
Hypotheses
Find Insights
Develop
Conclusions and
Make
Recommendations
Define the
Issues
So what?—aha,
new thought
What the client
should do
What are the
questions
keeping the
client awake at
night?
Statements that
provide
direction and
structure for the
analysis
Gather Data Analyse Data
Factual
information
gathered to prove
or disprove
hypotheses
Analyse what the
data tells us
1. Market & Industry Analysis
2. Company Analysis
3. Customer Analysis

Our approach to customer analysis focuses on creative analysis and
technology to add value
Customer Analysis Approach
Get Customer
Data
Segment
Customers
and Derive
Insight
Evaluate
Customer
Relationship
Strategy and
Customer
Value
Develop
Value
Proposition
Build
Appropriate
Customer
Experience
Technology

There are a number of options for gathering primary customer data
Data Collection
SURVEY
What does it involve?
• Collecting standardised data
from a population or a sample
drawn from that population
What is it used for?
• To study attitudes, feelings,
facts, beliefs, perceptions,
behaviours, needs (past,
current or future)
Self-administered QuestionnairesObservational
(e.g. work sampling, diaries)
Telephone InterviewsPersonal Interviews
Focus Groups

Secondary data is also useful to give a rapid insight
Secondary Data – Advantages & Limitations
LimitationsAdvantages
Provides a rapid insight into
markets: useful when conducting in-
depth interviews
If available, can provide a cost-
effective insight into markets and
companies
Not always accurate:
− Can be out of date
− Not always based on full understanding
of market

Different techniques are often combined to gain a more robust
understanding of needs
Types of Segmentation
Needs Database
Update
database
Reduce
variables in
database
Reduce
variables
Validate
variables
Validate
segments
Validate
variables
Reduce
variables
Reduce
variables
Conduct
Day-in-the-
Life of a
customer
studies
Conduct
focus group
interviews
Generate
hypothesis
about markets
and reduce
variables
Develop
and pre-
test
phone
surveys
Identify
segments
based on
needs
Conduct
phone
surveys
Develop
segments
based on
needs
• What is the customers
value to the end user?
• What is the customers
value delivery system?
• What is the company’s
value to the customer?
• What is the company
value delivery system?
Conduct market
focus workshops
Example of Process Followed to Deliver Needs Based Segmentation

Financial analysis consists of understanding a company’s financial
performance, over time and against its peers
Primary Data Collection Tools – Advantages and
Disadvantages
QUESTIONNAIRES
Advantages:
• Low cost of data collection
• Low cost of processing
• Anonymity
• Can get at feelings/attitudes/beliefs
• Avoid interview bias
• Ability to reach respondents in wide
geographic locations
• Can get a large number of
respondents
Disadvantages:
• Low response rate and consequent
biases
• May not be answered by right
person
• May skip difficult questions
• Cannot probe, correct
misunderstandings, offer
explanations
• Unsuitable for certain respondents
(e.g. with poor literacy, language
problems)
INTERVIEWS
Advantages:
• Good for motivating respondent and
building rapport
• Follow-up
• Can adapt interview to situation
• Good for handling complex topics
• Can use probes
Disadvantages:
• Expensive and time-consuming to
administer
• Social desirability bias (i.e.
respondent may not express
extreme or socially unacceptable
views)
• Interviewer bias
• Difficulties with sensitive topics
OBSERVATIONS
Advantages:
• Can observe real behavior rather
than perception of behavior
Disadvantages:
• Cannot observe perceptions,
feelings, etc.
• Observer may be biased, assume
the reason for actions that he
observed
• Resource intensive
• Subjects may disagree to being
observed

A good questionnaire is extremely difficult to develop… and takes several
drafts
Validity
Reliability
Ethical
Does the questionnaire measure what it is supposed to
measure?
− e.g. Is the relationship between variables genuine, or could there be
another explanation (internal validity)?
A measure of consistency—will the same measure yield the
same results on different occasions?
− e.g. Does the questionnaire obtain the same results with the same
person on different occasions?
− e.g. Is your sample size large enough?
Does the research protect the welfare of the subjects?
− e.g. Do the questions asked, methods used to obtain answers,
procedures used to choose subjects, the way subjects are treated, or
uses to which the data is put generate any cause for concern?

Selecting your sample population is an important step which must be
discussed with the client
You do not want your client to reject your final recommendations because they were based
on an “unrepresentative” sample!
Lower HigherLevel of Accuracy
Lower HigherLevel of Cost
Smaller, more
general
sample
Smaller, or
more specific
sample

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1
Flevy (www.flevy.com) is the marketplace
for premium documents. These
documents can range from Business
Frameworks to Financial Models to
PowerPoint Templates.
Flevy was founded under the principle that
companies waste a lot of time and money
recreating the same foundational business
documents. Our vision is for Flevy to
become a comprehensive knowledge base
of business documents. All organizations,
from startups to large enterprises, can use
Flevy— whether it's to jumpstart projects, to
find reference or comparison materials, or
just to learn.
Contact Us
Please contact us with any questions you may have
about our company.
• General Inquiries
support@flevy.com
• Media/PR
press@flevy.com
• Billing
billing@flevy.com

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