Customer Profiling- The Magic Of Simplification

Customer Profiling

Let’s assume you are the owner of a bakery. In a bid to increase your sales, you decide to come up with a new range of baked goods. But, that’s only a tiny part of the work done. There are quite a lot of questions that need to be answered before launching any product. Questions like- Do you know who your customers are? What they like? What they buy? These are all important points, the answers to which can make a massive difference when it comes to maximising the potential of your business. In this situation it would be of great help to have a mug shot line-up of customers, wouldn’t it? Alas, that’s against the law. Fret not, there is something that solves just the purpose and is a lot more innocent. What we are talking about here is ‘Customer Profiling’.

What is ‘Customer Profiling’?

First of all, let us focus our attention to the question of what customer profiling actually means. The most basic aspect of it is all about building up a picture of who your customers are. For example, this can include information such as how your customers interact with your business and what they buy. Another important bit of information is also the demographic information like- age, gender, education, occupation, income and so on. Geographic details like region and city are also facts to be considered. You can use this data to build up information about the people who use your business, in order to get a better understanding of your customer base.

Although this much information does provide immensely valuable insights into your customer base, it’s not enough. Unlike typical demographics or segmentation, differences in geography, income, status, etc. do not necessarily divide customers into different groups. For better understanding let’s take the example of two unrelated people looking to gift the latest Metallica CD to a nephew. One happens to a be 30-year-old mother of two living in Kolkata and the other is a 60-year-old retired gentleman living in Bangalore. Both will use Amazon to buy the CD following the same steps. Their goal is the same, to buy a specific CD online- quickly and easily.

This gives rise to an important question-

What should your profiling strategy be?

When you are developing a strategy for customer profiling, there are a few things you should consider. For instance, what details are you going to focus on? For example, you could choose to focus on customers who generate good revenue for your business. This might be either because they make large purchases sparingly or because they buy from you quite frequently. You might decide to categorise people according to the types of products they have bought before- like, which is your most popular product type? What sorts of people tend to buy from that range?

Let’s take the earlier example of the mother of two looking to buy a CD.The critical information needed for the user is the goal. Why is she interacting with the touchpoint? – to buy a CD. The tasks, as in what will she be doing when she interacts with the touchpoint – browse for The Metallica CDs, purchase the latest CD, probably arrange delivery to a different address because it is a gift. The touchpoint goals are also paramount. The goal here would be to sell a CD, very clearly show which Metallica CD is the latest, sell, etc. For this example, above, in a very loose manner you might create a profile called Sarah, who is 30, married, has two young children, doesn’t have the luxury of time on her hands, and needs to buy the Metallica CD online. But she doesn’t know who Metallica are or what their latest CD is called. Sarah will represent all the users who want to buy avery specific product but are really not aware of all the details.

This brings us to the next important step.

The implementation of your strategy.

Once you have accumulated all the data and have built your customer profiles, it is time to make use of this information. What you need now is a CRM software.It can be used in order to keep track of all these details and make sure you have all the information you need at hand. Most CRM systems come with a lot of handy marketing and business tools. It can be used to put your information to the best possible use. Say, you want to run a marketing campaign for your top-end customers. The customer data stored in your CRM software will target all the customer profiles which fall under the top-end category. This can be done by selecting your top-end customers based on the data of their previous purchases, searches, etc. What’s more is that with the data in the software, you can create marketing templates which further increase productivity.

All in all, customer profiling is a great way of gaining greater insight into your customer base. It can help you build more robust CRM practices and enable you to identify sources of potential development within your business, and so it is definitely an avenue worth exploring.

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