Optimize Customer Profiling: Best Practices for Utilizing Segments

What is customer profiling?

The customer profile definition is the act of taking consumer information and placing them into groups that have distinct and/or similar consumer characteristics. A customer profile consists of different identifiers that are considered desirable by the business that's looking for its ideal customer.

In turn, a business can better target an audience by delivering information, promotions, services, and anything else it wants its ideal customer to know about.

This results in the customer receiving communications from the business that aligns with their interests and makes them more likely to spend money with the business.

It can also improve customer loyalty by making the customer feel that the business understands the customer and wants to serve their needs.

Is customer profiling different from segmentation?

Yes, customer profiling is different from segmentation, although the two overlap each other in terms of their purposes.

Customer or audience segmentation is the act of grouping customers together under characteristics and behavior in a more general fashion.

In contrast, customer profiling is more refined in that it uses multiple consumer characteristics for each person in order to better understand their motivations to buy.

Importance of customer profiling for businesses

Making customer profiles gives a company insight into its target market and makes better decisions when it comes to targeting them.

The customer profile delivers vital information that's used to determine what the customer is most likely to buy, helps improve sales of a particular product, provides a solution to a customer's problem, and improves customer loyalty.

A customer profile shows a business what makes its target audience tick.

In other words, the customer profile helps the business understand their customer's behavior, why they're likely to buy a particular product, the circumstances and conditions that motivate the customer to purchase, and how they use their budgets and discretionary funds.

Identifying customer segments

Customer segments consist of the different aspects that go into a consumer's way of thinking, behavior, and life.

Each of the segments make up a part of the customer profile, and when combined together, helps create a definitive picture of the customer.

Demographics

Demographics deliver an overview of the ideal customer in that the age, sex, race, income, residence, education and other details are clearly laid out.

However, demographics only give hard basic demographic data and aren't nuanced in that it doesn't reveal what drives a person to make their decisions.

Psychographics

Psychographics show how people think about and view their lives in a more nuanced fashion than demographics.

This category reveals how people think about a topic or issue, their past mental struggles with a given topic, and what they're seeking to help them solve the problem in a way that makes it stick.

Behavioral characteristics

This gives insight as to how a customer might think about a product, how much-existing knowledge they have, their response to seeing it on the shelf, and their overall opinion about a product and/or a brand.

Behavioral characteristics are frequently in alignment with demographics.

Geographic characteristics

Geographic characteristics categorize new and current customers according to where they live.

Regional attributes such as climate, general income of the area, and density all influence how people spend their money. This can help predict customer behavior when it comes to what they buy most and are likely to buy outside of predictable behaviors.

Firmographic characteristics

Firmographics refers to the characteristics of a business and are used for B2B marketing.

This segment contains information including industry, revenues on a quarterly and annual basis, and where the company is headquartered. This information is used to better target the company with informed sales and marketing campaigns to improve the potential for a sale.

Gather the right information

A user persona is a fictional character that represents the target audience you'd like to target.

In order to create a user persona, you need to collect data that helps you engage in behavioral targeting as part of your marketing strategies.

Customer surveys

A survey asks a customer for their opinion or how they would respond to a given question.

This information shows their interest in an existing product, changes to that product, and what they would consider as an alternative. The questions can be written to elicit a specific response or to get an opinion.

Social media monitoring

Tracking what the target audience has to say about a product on social media helps you collect data on their preferences.

There's no need to engage with the customer, but learning about their opinion in an unfiltered forum can provide invaluable information as to how to market to them.

Customer feedback

Customer feedback provides invaluable information as to how your existing customers feel about your product or service. It indicates how likely they are to frequent your business going forward and tells you how to modify your operations to provide the customer service they're seeking.

Web analytics

Website data shows you where your customers are going after they land on the main page. You can use their browsing and purchasing information to inform you of who's most likely to buy the products you're selling.

Sales data

Completed sales show you who's buying the product, its success among your ideal buyer, and how you can position the product to attract buyers with similar customer profiles.

How to analyze customer data

After you've collected the data, it needs to be organized into datasets that you can apply to your ideal user persona.

Recognize patterns and trends

Customer data reveals customer habits and when they're most likely to try something new. It can also show their buying patterns, enabling a business to increase its targeted marketing efforts in response to increases and decreases in a specific activity.

Create customer personas

Using a buyer persona template enables you to create an ideal fictional customer that aids you in your marketing efforts.

The customer persona can answer questions as to how likely they are to buy a product in the future, what draws them into the store or land on a website, and the types of products that are most likely to appeal to their sensibilities.

Asses customer value

All customers have value, but some are more valuable than others. Knowing which customers have the value you're seeking makes it easier to target your marketing in relation to the cost of the item you're selling.

Identify customer needs and pain points

Understanding the needs and pain points of a customer means you can offer them a product or service that provides a solution they're in search of. It can also help them overcome a reluctance to buy.

Improve the customer journey

An in-depth understanding of your customer helps you deliver a pleasurable buying experience for the customer. This makes the customer feel heard, that their needs are met, and the business is interested in helping the customer.

Benefits of customer profiling in business

As a business, using customer profiles for your marketing and sales team improves the perception of your business among the general public.

It also helps a business save time and effort on acquiring new customers and retaining current customers.

Targeted marketing efforts

Targeted marketing efforts make it easier for a business to streamline its marketing, spend less money on acquiring a new customer or encouraging an existing one to return, and deliver a marketing message in an effective fashion.

Improved customer service

Customers like it when a business notices them and is interested in taking care of their needs. They're more likely to feel favorably towards a business when they get promotional materials that closely align with who they are as an individual.

Personalized customer experience

Customer data can be used to track a customer's personal likes and used for personalized marketing efforts.

Marketing directly to the customer and making them feel as if their needs have been anticipated goes a long way towards engendering customer loyalty as well as creating positive word of mouth between your ideal customers.

Optimized product development

Knowing and understanding the ideal customer profile definition means you can create a product that meets the needs of your entire customer base. It can also reach similar customer profiles that may not have considered the product in the past.

Enhanced cross-selling and upselling efforts

Understanding what your customer has an interest in buying makes it easier to determine their interest in a similar product, or buying an enhanced version of their regular purchase. You know who is most likely to spend more money on your offerings.

Reap the rewards of robust customer profiles

Creating customer profiles for marketing is worth making the effort to do. It makes it easier to identify your ideal customer, makes your marketing materials more effective, and helps you with your customer retention strategies.

In turn, your customers feel that your business is interested in providing them with quality customer service and that they're more than a dollar sign.

At Mailchimp, we have the tools and materials you need to build your customer relationship management (CRM) campaigns. We understand the importance of customer profiling and what goes into the creation of a buyer persona for marketing purposes.

Check out our resource library today and get started on learning more about the customer profile definition so you can get the best results from your marketing efforts.