Mass marketing no longer works in a world where consumers have come to expect personalizations. If brands want to stand out from their competitors, they have to craft tailored experiences and messages for their customers.
The demand for a personalized marketing experience has soared over the years. Brands have evolved their marketing strategy and now rely on unique profiles that take into consideration demographics and buyer perception. Communication is personalized based on their audience segments’ shared traits and purchasing habits. This process of identifying the ideal customer based on various factors is called ‘customer profiling.’
So what exactly is customer profiling? How can brands benefit from carefully targeting prospects? And how can you build customer profiles successfully for your business?
What is a Customer Profile?
Though customers and their buying choices might seem complicated, in-depth analysis from a marketing perspective can help break down the complexity. Customer profiling is one key way to fine-tune your marketing efforts. It’s a strategic practice used by businesses to identify the ideal customer type that will buy their products or services.
Unlike buyer personas that look at an individual, their hobbies, or interests, a customer profile in a B2B space looks at the ideal target company the buyer might belong to and what their characteristics are such as location, size, revenue, etc. For example, if your company serves only customers in the Americas or in Europe, this is the location attribute of your customer profile. If you offer a premium product or service, you must ideally target customers with higher buying power.
Customer profiles, therefore, are data-driven tools or documents that define and clearly illustrate the ideal customer that your company creates products or services for.
Benefits Of Customer Profiles
Customer profiling can be a great way to revamp your marketing campaigns to reach a solid ROI. However, the benefits of consumer insights go beyond just a well-structured marketing plan.
Some of these advantages include:
1. Expansion Opportunities
While mass marketing creates awareness, businesses that thrive consistently focus on understanding their customers better. A solid customer profiling system lets you do just that. Data-driven insights backed by real-time customer behavior trends also enable organizations to strategize expansion opportunities and improve market penetration.
2. Customer Experience
Customer profiles enable organizations to gain insights into the likes, interests, and pain points of their target audience. With an improved understanding of their target audience, brands can use the insights to inform their marketing and communications strategy, creating tailored messaging and content for their customers. Real-time insights on changing consumer preferences also help brands stay ahead of trends and adapt by adding new product features or improving existing services, leading to improved customer retention and acquisition.
3. Product-Market Fit
Whether a small-scale enterprise or a multinational corporation, every company has a target market with multiple consumer groups, each with varying preferences. Dividing customers into different segments and offering custom features within your products/services for each segment can help you cater to the requirements of varying consumer groups within your target market. This also helps companies and product marketers/managers find and better estimate the product-market fit of their service or product.
5 Steps to Create a Customer Profile
Often, companies that get started with customer profiling tend to look at the buyer persona as the sole highlight of the document. Buyer personas are important to understand the different types of individuals who may buy the product, whereas custom profiles describe the ideal customer that the product was created for. Having a customer profile helps companies decide on their audience segments and buyer personas.
Here are five tried-and-tested steps to creating customer profiles:
1. Define your WHY?
Every organization must be aware of the end goal of their marketing efforts. You need to answer the following questions right at the start to inform the next steps.
- What are the outcomes you expect from this buyer persona?
- How often does your target customer fundamentally change their buying preferences?
- What are the core aspects that influence your customers’ shopping patterns?
Answering these questions ensures you have a clear picture of your target audience and the expected outcomes of this project.
2. Extract your Data
Your marketing team can glean customer insights and inform customer profiling directly from data from marketing channels and other first-party touchpoints. Chances are you’ve got a stellar website, solid email marketing strategy along with diverse social media handles. While you share much information with your customers through these channels, it’s also possible to use these channels to collect a good amount of data about their behavioral patterns and real-time activities.
Here’s how you can extract data from a few of these channels :
- Email – From subscription preferences to click-through rates, analyzing your varied marketing efforts in newsletters or recommendations can provide valuable insights on factors that keep your customers loyal to your business.
- Website – When customers visit your website, you can track their behaviors to draw insights. On which pages did they spend the most time? Record their initial actions and triggers for bounce rates. You can use session analysis tools to gain insights and segment the audience into tailored profiles.
- Offline stores – If your company runs stores, use the available data from the registers. What are they buying? How often do they visit your stores? Are they inclined to generic products or just a specific range? Use this information to personalize your marketing campaigns.
Connecting a single user’s behavior across these different channels can help you get a deeper understanding of the customer and enable better customer profiling.
3. Dig into Demographics and Psychographics
From social status and value systems to demographics and financial position, psychographics is a qualitative methodology that provides insights into almost everything there is to know about a person. For example, while demographics give insights on traits like age, gender, profession, and HHI, psychographic traits such as perspective and morals help introduce custom products/services that align with the customer’s value systems.
Personalized data segmentation through psychographics and demographics gives an accurate list of preferences and lifestyle choices. It also helps better understand the purchase journey, inform when and how to target consumers, and identify opportunities for product innovation.
4. Analyze the data
Take the time to understand your data fully. What does the behavioral history say about the customer? What drove the sudden shift in shopping patterns? How can you introduce an innovative product or service to customers within a specific age group?
Study the data. There will always be untapped pain points for you to address as a business, innovative means to introduce a personalized shopping experience, or underrated events through the customer’s journey that could transform into potential business opportunities.
5. Update and Iterate
Customer profiles can be a kickstarting mechanism to help identify the scope and potential of market penetration for your products or services. While these profiles are crucial to validate your services with your customer’s requirements, merely creating customer profiles doesn’t always mean that your marketing efforts will resonate with their needs.
Customers have complex preferences that evolve over time. Businesses should constantly create, test, and change their marketing tactics to stay on par with customer intent that fluctuates.
The customer profiling database should be regularly updated and iterated to ensure you are working with an accurate set of data that works well with the segmented set of customers.
No matter the kind of business, gaining new users has always been more expensive than retaining the existing ones. But repeat customers don’t just happen all of a sudden. It’s a combined result of real-time customer insights and data-driven business decisions that align the segmented profiles closer to the brand through top-tier customer experience.Audience segmentation fills in the gaps by revealing the target customers and their purchasing attributes. A concrete audience segmentation plan is not only a step on the right path for your company, but could also be a game-changer.