Creating customer profiles to better understand your customers.
A customer profile is a way to create a portrait of your customers to help make business decisions around products or services. If you understand who is buying your products and why, the ‘key triggers and motivators’, you can communicate and engage with them more effectively. Customers are not all the same, they will be different in socio demographic terms (age, life stage, affluence etc) but also have different reasons or motivations for purchasing.
If you can identify specific groups or traits within your customer base (customer profile), you can then develop communications, promotions, new product development or services that address their needs.
The key is understanding the specific traits of your customers broken down into manageable groups. In an ideal world, businesses would be able to factor communications to each individual. Today, with the advances in technology and insight, this is not too far away. However, in the meantime, for many businesses the ability to identify and understand different groups or types of customer in their database is a vital step to enable more relevant and targeted marketing. As end consumers, we all appreciate relevant communications that inform us of products and services we ARE interested in. This builds customer engagement and brand loyalty so why wouldn’t you as a business take advantage of this?
So, what do you need to know about your customers to create a customer profile?
Demographic Information – age, gender and race
Consider the age range of your customers and their gender. Is your customer split biased towards one sex or another?
Are you aiming to target a particular gender? Is your customer base mainly young, middle aged, elderly or evenly spread across age ranges?
Do you have an ethnic group that appears more frequently than others?
Socioeconomic information – occupation, income, life stage
These are attributes that relate to the person’s income, occupation, neighbourhood they live in and can be a key driver in terms of disposable income, lifestyle and buying patterns.
Customer’s income and household ‘disposable income’ will impact the prices they are prepared to pay for products and services and what they judge to be essentials versus indulgences or luxuries. The level of education, type of job, industry sector and job seniority will also have an influence on this.
The life stage of your customer influences what they buy and why, are your customers single, young and starting out on their careers. Are they settled, middle aged and with children? If they are elderly are they struggling on their pension or enjoying retired life with assets and savings behind them?
Psychographic – Customer interests and behaviour
Your customers interests and behaviour such as hobbies, leisure pursuits and pastimes will enable you to use marketing messaging (merchandise, promotions, advertising, POS) that resonate with your customers.
It also helps understand where your customers will be both physically and online – which sites they browse, where they go and spend their free-time. This provides insight in where to advertise and what messaging and subject matter to use which is more likely to pique their interest.
Transactional – previous spend and patterns of purchase.
Transactional behaviour can be a very useful additional variable to use in context of what they have spent with you before ‘purchasing behaviour’. Are they high purchase customers, frequent customers, brand loyal or only interested in one specific product type?
If you look at your customers in terms of who they are and what they spend you can start developing specific campaigns aimed at their value to the business, but also their potential future purchasing behaviour.
Once you have grouped your customers into different customer profiles or personas – you are armed with the information to understand how best to reach your customers. Indicators of why they are interested in specific products/services and the messaging that will appeal to them.
Using customer profiling to gain a competitive advantage
Customer Insight that drives brand loyalty