We’re past the point of companies creating whatever marketing they wanted and sending it out into the void, hoping it sticks to any number of people. For maximum effectiveness, a more systematic approach is required.
Customer profiling is a useful technique to target audiences more personally. People expect more from brands today, and with the wealth of data available to companies, there’s little excuse not to satisfy that need.
What is customer profiling?
Customer profiling is a marketing tool that involves identifying, analyzing, and developing symbolic portraits of consumers. This allows businesses to tailor products and marketing accordingly and improve customer service.
Customer profiling is a critical first step in creating effective customer experiences. It helps you to:
- Understand what motivates your customers to buy your offerings
- How they use your products and services
- How they feel about your brand
This type of profiling is also valuable for developing new sales channels or expanding into new regions. It allows you to identify which types of customers would be most likely to respond well to different channels or locations.
Customer profiling is frequently used synonymously with customer segmentation, but the former goes further by examining each segment in detail.
4 main types of customer profiling
Customer profiling can be generally divided into four main types, depending on the characteristics you choose to segregate. There can be some overlap among them, but we’ve outlined each for simplicity.
Geographic
This type of customer profiling tells you where your customers are located and where they spend their time. This is useful if you want your business accessible to a specific area.
Business decisions resulting from this type can guide where to locate stores and customize your marketing communications to appeal to local culture and lifestyle.
Demographic
Demographic customer profiling groups customers based on demographic characteristics.
These can include:
- Age, sex, and marital status
- Occupation and income level
- Ethnicity and nationality
- Education level and family size
It is one of the most common types of customer profiling, grouping people with similar characteristics.
This method is easy to carry out but isn’t always accurate. If a business directs its marketing towards a particular demographic group, it risks alienating other groups who don’t fit that profile.
Psychographic
Psychographic customer profiling studies consumer behavior based on psychological traits such as attitudes, values, and interests.
This type looks at how people think instead of just what they buy. A psychographic profile informs lifestyle habits, personality traits, spiritual beliefs, and opinions on current events.
The goal is to discover what people think and what influences them. This information can then be used by businesses to develop strategies that resonate.
Behavioral
Behavioral customer profiling looks at how consumers interact with products or services.
This method is done through surveys, emails, phone calls, and focus groups. The data collected helps companies identify patterns in customer behavior to improve products.
Most commonly, past purchase behavior is used to inform customer preferences.
4 stages of customer profiling
Customer profiling can be roughly divided into four distinct stages.
Segmentation
Segmentation divides a market or population into smaller groups. This process helps businesses understand their customers and what they want, tailoring their products to meet specific needs.
Segments can be based on different factors, heavily influenced by the four main types of customer profiling. Each segment will allow companies to develop products for each group’s unique requirements. Doing so also diversifies your marketing objectives.
Segmentation is frequently misused synonymously with customer profiling. In truth, it is only the first step.
Messaging
The messaging stage of customer profiling involves creating an overall message behind your campaign that will resonate with your audience segments.
This involves leveraging the stores of customer data brands have and converting that information into meaningful insights. These insights will then drive business actions.
Begin by analyzing your products’ perceptions and how you want to shift them. Make sure that you have data that will validate this. Map these findings into business opportunities and creative ideas.
This stage of customer profiling involves discovering how the various segments view your brand. How you craft your messaging will inform everything from your tone of voice to format and style.
Engagement
The next step of customer profiling is knowing where to place the messaging. Customer profiling also considers your customers’ actions and where you can reach them.
This is different from typing them by geography or demographics. You’ll instead mostly be looking at their behavior across platforms, devices, channels, and social media.
Engaging with your customers means understanding that they are influenced by trends that themselves constantly change. Staying relevant is key, so keep an eye on what’s currently relevant.
Knowing these trends will also allow you to predict future customer profiling behavior, moving your brand strategy in the right direction.
This is one of the more analytical portions of customer profiling. Your analytics and survey data will work together to give an accurate picture of what consumers are doing and what you can leverage.
Personalization is also a crucial approach when customer profiling. Ideally, your customers will feel like your marketing speaks to them directly.
Measurement
Finally, measure your customer profiling and campaign effectiveness with robust analytics to track your marketing performance.
Continually measuring the impact of your endeavors is essential to creating effective marketing and customer satisfaction.
Identify the key metrics and narrow your KPIs to reflect business objectives closely. Sometimes you’ll need to specify these per customer profiling segment.
No campaign should be set in stone. Use these new insights to tweak and optimize your strategy to ensure a better return on investment and prove your marketing is worth spending on.
The advantage of customer profiling
The main advantage of customer profiling is it helps you determine how to tailor your marketing message to reach every group. You can strategize by creating specific ads targeting particular groups or single ads encompassing all.
The main benefits of customer profiling also include the following:
- Improved customer satisfaction – customers will be happier with their experience if it’s tailored to their needs. This leads to increased loyalty, repeat purchases, and referrals.
- Increased sales – personalized offers increase conversion rates, leading to higher sales.
- Improved customer service – knowing what type of customers you have allows you to predict when they’ll need help. You can then respond quickly and efficiently when these situations arise.
