What Is Customer Profiling? A Step-by-Step Guide on How to Do Itin Marketing
Many businesses fail in attracting customers and selling their products or services because they don’t know how they are addressing their goods. At the core of each digital marketing and business strategy is understanding who your customer is.
Over the years, customer behaviour has changed. They expect more from brands, and they don’t react anymore to general messages. They expect a personalized customer experience at each step of their journey that speaks to them alone. Therefore, businesses need to tailor their marketing activities based on an in-depth knowledge of their customer types.
In this article, we will give you all the information you need about customer profiling and a step-by-step guide on how to create one. Follow along if you want to switch your strategy from guesswork to data-driven marketing campaigns and customer-focused decision-making.
What Is Customer Profiling?
Customer profiling is organizing current customers into particular groups that hold similar goals and characteristics. Doing this will gather all the information needed to identify, segment, and define your target customers, target market, or target company profile (for B2B companies). A customer profile is usually based on several identifiers such as demographics, hobbies, online behaviour, likes, dislikes, buying patterns, social media channels preferences, financial income, etc.
Dividing your audience into profiles will allow you to better target your products, services and communication in a coherent manner that resonates with a group of people. Instead of reaching everyone in the hope of capturing the attention of potential customers, focus your attention to recognize who your buyers are so you can develop a rock-solid marketing strategy. This way, you will get a competitive edge, and you can tailor your products to have a better impact and attract more potential buyers.
Our advice for business owners is to go beyond the basic demographics and get as close as possible to their customers to capture their attention in the right way. An effective customer profile starts by cutting down the list of potential groupings. We recommend keeping only the ones that are deeply connected to your target customer base and your company’s product usage. This action implies quality insights and not broad research. Your customer profiling should create value based on your data gathered over time about your current consumers.
Ideal Customer Profiling vs. Buyer Persona
Customer profiling represents a depiction of your customers based on real insights such as buying behaviour and customer interaction. These touchpoints do not replace the traditional demographics, but they complete them.
Customer profiling is a tool that will give you an overview of the customer types that interact with your company, products or services. An ideal customer profile describes as precisely as possible a buyer group and not an individual or end-user. Understanding a group’s habits and characteristics will help you better reach them. Focus your marketing efforts to attract your target market with personalized communication as 72% of consumers only engage with personalized messaging. Keep in mind that customer profiling is also applicable for B2B companies. Instead of people, you analyze a business profile such as company size, job titles, etc. Everything is about metrics.
A buyer persona is focused on an individual rather than a group of people. The ideal buyer profiles are focused on the psychology and the needs of an individual that represents your ideal customer. To create a buyer persona profile, you should ask the following questions: What is their typical demographic? What is their job? What do they do in their everyday life? What hobbies do they have? What are their struggles and challenges in their daily work and their daily life? etc. The purpose of a buyer persona is to create the ideal customer for your business, products or services.
We want to underline that both are valuable tools that help you better reach your audience with targeted communication specific to every type of customer and get high-quality leads that will turn into profitable customers.
Why Is Customer Profiling Important?
Customer profiling is essential because it allows companies to meet the expectations of the quality leads they want to pursue and deliver products and services that are alluring to their audience. Orvel Ray Wilson said in 1984 something that still applies nowadays: “Customers buy for their reason, not yours”. It is essential to understand the reason that leads to a purchase. Marketing messages that work are customized based on the characteristics of your consumers, are adaptive and responsive to buyers’ needs.
Nowadays, your marketing team and business owners must realize that people are becoming more informed, assertive and confident about what they want from brands. More than that, they are split into diverse customer segments that extend across platforms, devices and communication channels. This makes the need for personalization even greater than before. Also, customized marketing does not mean only creating ads based on users purchase history and their customer journey on your website. Profiling your consumers based on valuable insight into their behaviours, attitudes, interests, and perceptions will aid you in creating a detailed image of your audience. Hence, you know what to say and how to communicate to reach them most effectively.
The CEO of Marketing Insider Group, Michael Brenner, says that consumers are less open to interruptive ads and promotional messages. The Advertising Research Foundation’s studies showed that sales start to decline after multiple messages from a business because nobody wants to see interruptive promotional messages. But when you create content that people want to see and are interested in, you will start getting relevant traffic and drive value.
Let’s say that you are newly launched on the market. When you start your market strategy and instruct your sales team, it is crucial to depict your target audience clearly. We recommend focusing on solving one problem that your audience has at the time. It is easier to target the right people and solve one problem for more people by narrowing your focus. When you want to solve multiple issues and target a broad audience, you will resolve fewer issues for fewer people. Also, because you spread your products and services so broadly, they will decrease in value.
Another essential factor that we consider extremely important is that customer profiling is valuable for all your business team members. For example, product managers can develop new products that better fit consumers’ needs. The marketing team can create a better brand position strategy. The sales team has a better grasp of how to search for potential customers.
Benefits of Customer Profiling
When you want to grow your business, you create customer profiles as they are a powerful tool fit for every business model. Take advantage of this process because it will impact multiple areas of your business, from the sales department to the service organization.
Now let’s dive deeper into the benefits of customer profiling:
- Eliminate irrelevant leads – by already knowing who you address your products and services, your teams can find relevant prospects and increase the close rate. When you reach a person interested in your product or service, it becomes a happy customer. In time, satisfied customers become loyal customers.
- Decrease your customer acquisition costs – this cost includes the total amount of money you spend on marketing campaigns and sales efforts to attract and convert a single individual. When you know who your audience is, targeting your campaigns is becoming more specific. Therefore, you will increase the click-through rates and conversion rates. The more you know your audience, the cheaper it will be to attract and convert them.
- You will better meet customer expectations – customers are the ones that make or break a business’s success and growth. The key to customer loyalty is to serve your buyers exactly how they expect. By knowing the pain points, characteristics and attributes your users gave, you can deliver a first-hand customer service experience, anticipating their needs. Also, you can predict future issues and solve them before they become a problem. You can better align your service team with users’ needs.
- Reduce customer churn – .customer churn is when you lose customers over a given timeframe. Having complete and strong customer profiles from the beginning, you can attract, satisfy and convert people interested in your products and services.
Types of Customer Profiling
Creating multiple types of customer profiles will help you better depict the conventional users of your product or services. These profiles are used to aid the project team in taking customer-centred decisions without letting their personal opinion influence the project’s goal.
Customer profiling gives you a better understanding of the typical audience. Traditional market segmentation based on demographics, income, status, etc., do not split customers into accurate groups. When focusing on creating a profile, you should take into consideration the goals of the users. What goals do they have in mind, and what scenarios they might encounter when interacting with specific business platforms, channels and materials (website, social media profiles, catalogues, brochures, emails, etc.). Answering the following questions will help you create a more accurate and complete customer profile:
- Why are they interacting with the business platforms, communication channels, materials, etc.?
- What are they doing when interacting with the business platforms, communication channels, materials, etc.?
- What are your goals when people interact with the business platforms, communication channels, materials, etc.?
By considering more than the traditional way of segmenting your audience, you can help your business deliver more compelling features, reach and attract more consumers, build a stronger relationship with your customers and place yourself in a higher position against your competition.
We recommend grouping your customers based on clearly defined segments or types. These types will give you valuable information about trends in satisfaction, churn, and customer value which will help you better understand your ideal customer profiles.
- Start with a demographic profile. This will give you factual details about customers and help you understand their behaviour. The demographic profile should include age, gender, job title, income, education level, family status, etc.
- The next step is the psychographic profile to understand when, why, and how people decide to buy. The psychographic profile gives more sense to the attitudes and psychological traits of a customer. This profile includes details about lifestyle, goals, habits, hobbies, likes, dislikes, values and interests.
- The behavioural profile analyzes the way a customer manifests when interacting with your business. For creating a behavioural profile, you should take into consideration the following aspects: user engagement, eagerness to buy, purchasing history, product usage, customer satisfaction, customer loyalty, account age, the attention required from your part. The behavioural profile brings the most value to your customer support team as they can find actionable insights based on customer interaction.
- The geographic profile is essential when the location of your customers can interfere with the way the people interact with your brand or receive your products. The geographic profile includes the following factors: country, region, area, and city.
A Step-by-Step Guide on How to Create a Customer Profile
Now that you have all the needed details on what a customer profile is, why it is essential, the advantages of customer profiling and what types of profiles you should focus on, we would like to teach you how to create an accurate customer profile step-by-step.
1. Define the issue or problem your business wants to solve
When you are a new business or want to launch a new product or service, we strongly recommend you focus on the issue or problem you want to solve. Next, you should identify the category of people that will benefit from your product or service. If you already have a client database, examine your current consumers and what their behaviour manifests.
Don’t be discouraged if you don’t have thousands of customers. It’s not the quantity that matters. It’s the quality. What you should understand is who your current and future customers are, how they use your products or services and why they are using them.
2. Take a closer inspection of your customer journey map
The customer journey map is a document that pinpoints every decisive step a user should go through to convert. This process tells you a story. You will learn how your customers move through each interaction phase that you guide them around and their experience at each step.
You should know that it is not necessary to complete a customer journey map in order to achieve a customer profile. What you can do is understand what are the user’s needs, goals and challenges they face. This way, you will have an enhanced understanding of what your consumers want from your business.
You can conduct in-depth customer interviews regarding each touchpoint on your journey map. This way, you can find out what users think about the experience you offer, how their perception changes in each stage of your journey map, etc. Customer feedback is essential when you want to improve your business because you accurately depict what you do right and what you can correct.
3. Start outlining customer types
Start answering the demographic questions. Start from general and then get into specific user needs. Finally, see where your business offerings fit. We recommend starting by positioning your product as accurately as possible, from broad to narrow. First, think about which market you will find your target audience in? Narrow it down to the niche or vertical your audience is. Ask yourself what their annual income is, where are they located, etc. Take all the customer types attributes presented in the chapter above and start contouring a complete customer profile.
4. Ask for customer feedback
While drafting your profile, rely on the data different departments give you. To know your customers better, you should interact with them. Find what they like and dislike, their overall opinion about your business interaction, your products or services, etc. Customer interviews are the best tool to identify your strong points and your pain points. You can conduct these interviews face-to-face, via chat, phone calls, video calls, online forms, etc.
5. Identify patterns
Use your gathered data to identify repeating patterns. When the same respondents meet at the same position or have the same attributes at least five times, it means that you have some customer profiling data to work with. Also, unique patterns can be compiled into another customer profile that is important for your business. To complete your customer profile, we recommend you turn your focus internally and identify your company, product, or service providers’ values to these customers. Can you solve their problems? What elements differentiate you from the competition, and is your business, product or service a long-term solution or a short-term solution?
6. Know your industry
You are most likely to fail when you don’t know your industry, your competition, and the specific traits that customers expect from your brand. You should understand how customers perceive your brand because you will know what type of audience you strive to attract and convert.
Another significant benefit of understanding your industry is that you can define your brand identity. To stand out from the crowd, you should differentiate your business, products and services from your competition. Keep in mind that you don’t want to create controversy or adverse reactions. By knowing your consumers’ behaviours, feelings, beliefs, and preferences, you know how to plan your marketing strategy that your audience responds to. See what your competition does, what you can mirror and adapt for your business.
7. Build buyer personas
You don’t promote your business to robots. You are trying to reach actual human beings with feelings, personalities and needs. After you have identified the nature of your customer profile, it is time to identify the individuals you want to attract. This will help you build a relationship with your buyers and understand their decision-making process and external influences.
8. Analyze your customer persona and keep your customer profiles up to date
Building an accurate profile is the main factor in helping your business grow. Your customer persona profile is acting as a guideline for your market strategy. It will help you identify the products, services or features to develop in the future, what channels to use for your marketing campaigns, how to phrase the content for your marketing emails, etc.
Without knowing your audience, you will start spending money in vain without attracting potential customers. More than that, you can end up putting yourself in front of prospects that do not resonate with you in any way and your products and services cannot solve their problems and satisfy their needs.
Whenever we take on a project, even if we talk about digital marketing strategies or custom development solutions, we always start by understanding the industry, the product we are working with and the target audience.
When we create a customer profile, we carry out a target market analysis and a competitive assessment. Then, we carefully plan, in detail, how to reach these people, how we should advertise the products or services, what channels we use, what type of content is the most attractive, etc. When we strat segmenting the profile, every customer type is split into demographics, preferred communication channels, used devices, core values, etc.
Customer profiling is not based on guesswork. It requires
- understand your products or services in the way your consumers use them;
- ask for feedback;
- understand all the profile types and use them to create the ideal group of people that will buy your products or services;
- identify patterns;
- be observant of changes and new trends in societal surroundings and behavioural tendencies;
- survey your customers to get more insights;
- keep your customer profiles up to date.
If you have trouble understanding your target audience or cannot reach the right audience through your digital marketing efforts, let us know by dropping us a message. To get an idea about our work, you can check out our portfolio and read our reviews. Don’t miss out on the opportunity to grow your business and make it more successful every day!
Frequently Asked Questions
Because it is easier to get to people that are actually interested in your products instead of spending a lot of money and not getting the return of investment you desire.
Look for patterns. They can be common or unique.
An ideal customer profile describes as accurately as possible a group of people, while a buyer persona describes as accurately as possible an individual.
Find relevant leads easier, increase customer satisfaction, increased customer loyalty, better conversion rates, higher ROI.