When creating your marketing and sales strategy, which basically includes engaging with customers at some point, it’s important to have a clear picture on who these customers ideally may be, what problems they may be encountering and what they may need to solve those problems. By focussing on creating customer profiles first, you can make better informed decisions for your business later.
In order to create your ideal customer profiles, or customer personas, three possible approaches are typically used by marketing departments: the psychographic, the consumer typology, and the consumer characteristics. These customer profiling methods will help you design your business around who your customers are, and help you make better, customer centric decisions.
What is Customer Profiling?
Customer profiling is a way of describing your customers, based on factual information, such as their subject interests, buying behaviours or customer service interactions. These then serve as marketing and sales touch points for reaching out to ideal customers. Customer profiling is the process that will allow you to portrait the customer types that will actually interact with your product or service.
Customer profiling can tailor products or services for more specific groups of people, rather than going broadly and hoping to capture more market share. In knowing exactly who your customer is, you can develop an edge over competitors since you can tailor your products or service to have more impactful features and attract more people who are likely to buy it.
The Different Approaches to Customer Profiling
Customer profiling is done by dividing customers into groups with similar characteristics and goals. E.g., if the goal is to purchase a computer online, there might not be too much of a difference in how an unmarried professional buys it, and a married ICT teacher.
Both would know how to use e.g. the apple store, and will understand the laptop characteristics in choosing an exact model that fits their needs. They would also have more purchasing power compared to someone like a high school student.
Depending on your strategy, there are three methods of profiling customers based on their decision-making styles:
The psychographic method takes a look at a customer’s lifestyles to define market segments. Many components plays a role in using the psychographic customer profiling method, such as interests, activities, social class and general values.
- Activities, interests, and opinions are a subset of lifestyle, focusing on your customers’ activities, interests, and opinions. It’s not a problem if customer A enjoys romance books while customer B prefers fantasy novels – both of them are readers, and that is how you profile them.
- Lifestyle and demographics are factors that include location, gender and age. E.g., a customer’s lifestyle determines how your product will fit into the needs of school-going, college-going, and office-going customers’ buying habits respectively.
- Values, attitudes, and social class reflect the way people were brought up. These affect how prospect customers spend money and what they choose to spend their money on. Social class is especially important, as income determines buying power.
2) Consumer Typology
The customer profiling typology approach segregates consumers based on their motivations, their mindsets, and how to engage them. Marketing usually defines four types of consumers: loyal consumers, discount consumers, impulsive consumers, and need-based consumers.
- Loyal consumers are rare, but valuable. They tend to remain loyal to a brand and promote these brands through word-of-mouth.
- Discount consumers, on the other hand, don’t prefer one brand over another. They will only make a purchase if there is a discount or a sale.
- Impulsive consumers do not shop with anything specific in mind. Unlike either loyal or discount consumers, they aren’t looking for a product, service, or brand, and spend their money capriciously. They are more emotionally driven rather than logically driven when making decisions.
- Need-based consumers are the opposite of impulsive ones, as they will only purchase a product or service to fulfil a need. They are the type who would enter a store quickly, make a purchase, then leave.
3) Consumer Characteristics
The consumer characteristics method asks what traits influence buying decisions. There are a variety of consumer characteristics, but there are three common ones that define modern consumers.
- Convenience-driven is one trait that characterizes a modern consumer. These are the customers who may not have much time on their hands, so they order products or services online so these arrive faster. For them, everything should be fast, simple, and easy to use.
- Connectivity-driven consumers want to feel part of a community; they feel connected to someone else if both purchase the same product. Connectivity-driven consumers also tend to listen to other people for their opinion on products, services, and brands. If one person says the product is good, then these consumers would be more inclined to make the same purchase.
- Personalization-driven consumers would prefer a customer experience that is customized for them specifically. These consumers value making the choice of how a product will look, or how a service will be attuned to their needs exactly.
Creating Your Customer Profiles
Creating a customer profile begins by having your marketing team gather information on existing, satisfied customers, then trying to target new prospects with matching profiles of your target group. You can begin customer profiling by:
- Collecting feedback from your customers: Survey your existing customers to get their feedback on what you are offering and how they perceive your business. It’s important to do this especially when your business launches something new. You would know what works, what doesn’t work, and what can be improved. Include incentives that will induce them to complete your survey, such as discounts on the next purchase.
- Keeping your customer profiles consistent and up to date: Documentation is naturally a part of consumer profiling. Keep your findings in a database that is easy for you to read and familiarise yourself with. The template of the profiles should be the same for every customer type and should include information, such as their name, email address, demographics, behaviours, habits, psychographics and societal surroundings.
- Surveying your customers on their interests and preferences: A customer profile will change based on customer experiences and trends, which is why it is recommended to conduct surveys quarterly. Identify their gender, job role, location, habits, interests, and preferences and include these in the profile.
Using Customer Profiles to Find Best Customers
In the end, the whole exercise of making customer profiles is to tailor your campaigns to find best possible customers. If they reveal not to convert well, within your marketing campaigns, your customer profile must be wrong.
- Here’s an example of how a quick-service restaurant chain used people analytics to create a profile for their frontline employees to understand how they can play a part in growing the business. They created a profile for each employee and categorised them into four different archetypes. Using each profile they gathered, the business tried to achieve consumer profiling by finding out which variables corresponded most closely to store success and found that certain employee archetypes achieved more due to their demographics and personalities.
The reverse can be done to find an ideal customer for your business as well. In gathering customer data of your ideal customer, your sales team will be able to better identify similar customers who are a better fit for your business. You can match the customer profile of each successful sale to understand who your business should be looking for.
If you can assign typical ads and content to certain customer profiles; and you measure all interactions from incoming leads; by association, you can tell which lead is meeting which customer profiles.
Monitoring Behavior to Profile Customers
Another indirect yet important use case in marketing is to know how to communicate with target customer profiles, or personas, in order to maximize conversions. Or for sales, knowing which leads meets a certain profile, means knowing how best to talk with him to best convert him into a paying customer. Customer feedback can help at some point, but that’s only possible after identification.
In order to create your ideal customer profiles, or customer personas, three possible approaches are typically used by marketing departments: al social ads, campaigns, web-, blog- and help pages, events and even seemingly random customer data to certain customer profiles; and you measure all interactions from incoming leads; by association, you can tell which lead is meeting which customer profiles, allowing you to tailor your conversations towards maximizing conversions.
Invest in Customer Profiling
Customer profiling systems have greatly evolved over time, so there is no longer any need for marketing to conduct manual research to create and segment profiles. These profiles are however often based on professional email addresses or IP addresses, none of them related to your specific business and for which no GDPR/CCPA consent was given!
journy.io analyses lead and customer behavior on social ads, on website and on platforms and attributes the most-likely profile to meet that behavior. And that, on user and account level, so you can now also perform customer segmentation in function of how their buyer personas interacted. Our software will show you a simple clear-cut customer profile at a glance, so you can make every interaction count. Build and nurture meaningful relationships with your target audience, rather than just using a generic message for each lead or customer.