In today’s highly competitive business environment, it is essential to know your customers in order to succeed. Customer profiling is a critical factor for any organisation that intends to understand and market to their customers appropriately. Consumer profiling can help update the marketing methodologies, customer experience, and eventually increase the revenue.
This article covers the basics of consumer profiling, its steps, advantages and provides ideas on how it can take your marketing to the next level.
“A customer profile refers to a summary of the characteristics, conduct and demographics of a typical customer in a segment of a market.”
It is a type of a customer which helps business organisations not only visualise, but also develop a sense of empathy for the intended customers. Customer profile examples may include demographic information, perceptual, behavioural and psychographic information including age, income, spending behaviour, interest and attitude.
“Customer profiling can be described as evaluating and grouping the customers based on similarity factors.”
It involves developing profiles of typical supergroups of clients or target consumers to whom diverse companies can appeal with the help of various marketing strategies.
Compared to more conventional demographic variables, consumer profiling encompasses not only a range of quantifiable factors but also purchasing behaviour, preferences, and behaviour patterns in order to create a more comprehensive picture of the consumer.
Customer profiling and segmentation are not exactly the same but are two processes that are intertwined when giving insights into the target market of a business organisation.
Market segmentation splits up the customers according to certain criteria which are homogeneous in terms of demographic or purchasing behaviour traits.
Customer profiling, on the other hand, develops a portrait of these segments in a very comprehensive way, which leads to a clear understanding of the segments.
Consumer profiling is used in conjunction with customer segmentation hence allowing businesses to target and communicate with their customers in a way that will resonate with the segments based on product offerings.
In general, constructing a rich and effective customer profile entails the systematic approach to data collection and processing. Here are the key steps involved:
Start by defining the aims of profiling customers. Figure out whether you want to change your marketing strategies for the better, improve customers’ loyalty, or boost your product design. When profiling is done, it is achieved to have a set objective that guides the process to ensure that it is well done.
In profiling, data collection plays a significant role. Use customer surveys, focus group interviews, social media analysis and data capturing on customer’s buying patterns and characteristics. Collect different types of data with the help of customer feedback, website data and past purchase data.
After data has been gathered, divide the audience into distinctive groups on the basis of characteristics they share. Demographic, behavioural, or psychographic are ways of segmenting depending on the goal and objectives.
A detailed profile for each segment should be created. Some details must pertain to the customers’ demographics, interests, motives for purchasing goods, and buying behaviour. Present each as if you are referring to a customer who requires them and highlight certain attributes of customer needs in them.
Always revise the customers’ data saved in a program in view of new data incoming or changing market conditions. Customer personas should change as your knowledge increases about your audience so that you do not end up with ineffective marketing strategies.
Here are some effective Consumer profiling strategies:
This method aims at identifying various customer psychic characteristics including values, interests or lifestyle. It enables the organisations to address other needs that people have that prompt them to buy products, thus enhancing the possibility of highly targeted marketing.
This method groups consumers into particular kinds based on their activities and traits. On determining consumer typologies, it becomes easier for a business to group its customers and thus market communication becomes well focused.
This strategy identifies other aspects related to the consumer such as personality and lifestyle preferences. These are noticeable characteristics that when known by the businesses, help in developing appropriate marketing strategies that would touch the heart of the targeted individuals.
Effective customer profiling brings numerous benefits to businesses, including:
Enhanced Personalisation:
It is only possible to develop unique marketing messages for each targeted category by knowing the specifics of customers.
Improved Customer Retention:
Profiling assists the company in identifying its loyal customers and discovering the best ways to retain those clients. This way, companies are able to create customised solutions that enable them to establish customers’ loyalty and minimise churn rates.
Optimised Marketing Spend:
On the basis of customer needs, strategic customer segments can be identified and targeted in an effort to maximise chances of conversion and hence enhance the returns on investment (ROI) and reduce wasteful expenditure.
Competitive Advantage:
Companies that know or understand their customers better than rivals would be more likely to thrive. Consumer profiling enables companies to better segment their products and services and connect with their clients.
Informed Product Development:
Customer requirements profiles are quite informative when it comes to what product or feature customers are interested in. This information is useful in helping a business come up with better products that may actually stand a chance in the market.
Consumer profiling is a crucial element of marketing because marketing communications needs to be targeted at specific groups of customers. Thus, marketing the meaningfully targeted content that matches the customers’ profiles increases the conversion rate.
The marketing consumer profile enables the creation of messages that are suitable to the consumer hence making advertising and promotion meaningful.
Through horizon scanning of profiles and adopting the customer profiling strategies, the marketers can achieve improved marketing and boost customer loyalty as well as gain competitive advantages within the business competition.
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What are the four types of customer profiling?
The four types of consumer profiling include demographic profiling, psychographic profiling, behavioural profiling and geographic profiling.
What is a customer profile example?
An example of giving a customer profile may be as follows: It may define a 30-year-old female, living in London, and interested in environment friendly products especially in clothes and she shops for such products once in three months.
What is ideal customer profiling?
Consumer profiling is the process in which a company forms a picture of the perfect customer that would be most benefited by your company’s product or service based on demographic, behavioural and need factors.