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 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 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.
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 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.
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.