Customer profiling is the practice of organizing customers into specific groups possessing similar goals or characteristics. A customer profile can be based on a number of identifiers including demographics, location, hobbies, preferred social media channels, likes/dislikes, buying patterns, psychographics and credit background. Assigning every customer a profile allows organizations to target products, services and communications in a consistent manner that resonates to a group of customers.
The key to customer profiling is to narrow down the list of potential groupings to those that are relevant to the targeted customer base and the organization's product offerings. Ideally, customer profiles will describe a group of consumers rather than individual buyers or end users. Customer profiles can then be used to identify the best products or services to pursue, create relevant messaging or marketing campaigns and attract a target market.
Customer profiling is important because it forces an organization to focus on the specific consumers they want to pursue and create products and services that are more attractive to that audience while also realizing economies of scale. The practice of customer profiling is similar to the practice of customer segmentation.
Benefits of customer profiling
- The ability to tailor marketing efforts to relevant audiences.
- Personalization of customer experiences to increase brand loyalty.
- Can provide a more holistic view of market potential.
- Improved customer satisfaction
- Increased response, click or open rates.
- More potential customers, prospects and customer types are identified.
- Increased sales and revenue.