The phrase “customer profiling” has an unmistakable detective/crime scene connotation to it. As it turns out, detecting customers and creating actual profiles for them isn’t that far from the truth. Customer profiling can be an invaluable way to target your ideal customers, whether you’re marketing the next smartphone or fine-tuning your artisan foods delivery aesthetic.
Below is a complete description of customer profiling, with notes on its key advantages, disadvantages and ways to help you rake in your best and most loyal customers. If you’ve never targeted customers before, consider investing in this top-rated course on how to get, test and optimize customer development techniques.
Customer Profiling Summary
Customer profiling is the process businesses use to create a “verifiable” profile of a group of customers. This is accomplished primarily through demographics. For example, geographic location, spending habits, income, gender, age and other similar characteristics would all be valuable metrics. B2B businesses conduct the same kind of research, but of course they would things such as size, budget, sector, partners, etc.
When you join an online community, create log-in credentials, enter your billing information, etc., you are providing a business with key demographics. It might only be your gender and location, but any info you give them is assuredly entered into a customer profiling database. One of the fundamentals of customer profiling is to create the largest, most detailed and up-to-date database of customer information. Any poll you fill out, questionnaire you answer, even the links you click on can easily be traced to your geographic location (as well as any other details included in your profile; at least, if you’re “signed in”).
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- Fishing In The Dark vs. Fishing With Dynamite
The better you know your customers, the easier it is to figure out why they are buying from you. Naturally, your product will target certain obvious audiences. If you design app-based video games, for example, you would not expect your population to be senior citizens. But you might be surprised to find out that a large percentage of your customers are upper-middle-class middle-aged professionals of both genders. I don’t need to spell out the advantage here, but customer profiling can reveal opportunities for new products, marketing campaigns, etc. In this way, you aren’t fishing in the dark and betting on luck; you’re dropping a stick of explosive marketing into the part of the pond that has the highest concentration of fish.
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- Up-Selling And Cutting Through The B.S.
Whether you need to sell an idea to your team or your customer base, customer profiling helps you cut through the b.s. faster than ever. If your creative team is sitting around trying to think of the perfect product (of which there are millions), then it might be a while before everyone agrees on one idea. Profiling can help narrow down your options and the strongest arguments are going to be those based on fact. Profiling also allows you to up-sell to certain groups and to completely justify this decision. Similarly, it allows you to create custom products, options, designs and services based on where you are selling geographically (or based on any other metric, of course).
Customer profiling can back-fire (for lack of a better word) in cases where the targeted group does not need to be scientifically precise. Profiling is not really employed in broader or macro-marketing situations, and this is definitely something most companies would not want to forget. While this isn’t necessarily a disadvantage of customer profiling, it does reveal a limitation to its uses. But at the same time, this makes sense. What is the point of collecting detailed information on customers if you are only going to market or sell to the general population anyway?
Many companies fail at attracting their target audience and turn to the general population out of desperation, thinking they’ll have better luck with bigger numbers. But this is any easy way to melt into oblivion. You need to be able to turn complete strangers into customers and customers into long-term clients; in other words, you need a system to execute your targeted plan. Learn this small business marketing system and other advice for building a customer platform with this great class on how to build a customer factory.
Customer Profiling: How To
The customer profiling process is relatively straight forward, but the hard part is organization and analyses. How are you going to make sense of your data? What do certain, unexpected trends indicate? As you might have expected, there are a number of software programs to help you with this, including FastStats by Apteco. If you’re good with Excel, you can probably accomplish some of the same features, but it will certainly be more time consuming. You should also consider Google Analytics, which might be your best option (customizable, easy to use and mind-blowing to anyone who has never used it before). But enough talk about automation, which really can only take you so far. Let’s look at what you can do to get the most out of customer profiling.
Your Ideal Customer(s)
Yes, customer profiling is going to help you figure this out, but you need to go out on a limb and figure out who your ideal customers are. Unless you’re producing cardboard boxes, you’re probably going to have someone in mind. You don’t need to know specifics; geographical locations and gender aren’t important yet. You just need to figure out who, in your company’s opinion, would be the best people to do business with and what kinds of things these people find important. Those are your ideal customers.
For example, you should know whether you want people who value personalized customer service over price, or collaboration over productivity, etc. You don’t want to create just one customer profile. That’s not what customer profiling is about. You should have several profiles at least, which detail certain kinds of customers who each have certain interests, tendencies, etc. More than one type of person or business will be purchasing your products, so before you move forward with the process you need to hammer out your target profiles.
Your Most Important Features
Figuring out who your ideal customers are will help you design your most important features moving forward. Each profile of an ideal customer will help you figure out what will ultimately make that customer prioritize your company over the competition. Get tips and another opinion on the matter from this blog post on clever business development strategies to help grow your business today.
Let’s take the example I used in “Your Ideal Customer.” If you have someone who prioritizes personalized customer service over most other things, then how do you answer the following questions:
- If you already have personalized customer service, then why would this customer resist giving you their business?
- If you know why they would resist, then what would attract this customer? What would you have to say or do to get their attention?
- Once you have their attention, do you have an ace in the hole? In other words, can you solve one of their problems?
Now let’s say that the customer who wants help with personalized customer service has had no luck training or finding resources for his/her sales and customer service reps. If this is a target customer, then, for example, you might devote a portion of your website to addressing small business customer service training. Speaking of which, take some initiative and learn the basics of customer service and its practical applications with this five-star customer service training course.
Connecting With Current And Future Customers
A new or young company may start with their own customer profile, but ultimately it is a mashing of what the company wants and what the customer wants. Obviously a company cannot cater itself to every customer desire. A company has its own goals, expectations and vision. The key is to keep your morals, so to speak, while keeping your company relevant through the accumulation of current customer information.
This is where the aforementioned software and analytics comes into play. You want to combine the company vision with your current customer base to create the best, ultimate and most targeted experience to attract the most, new customers. You don’t want to keep fishing in the dark, but you do want to drop a new product into a demographic that’s eager to have it. When customer profiling is wielded intelligently and seriously, that is what it can accomplish.
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