Customer profiling is the practice of identifying different consumers in the market and then grouping them based on their similarities. For example, you would look at geographics, demographics, psychographics, and behavioural characteristics. We’ll dive into each of these later in the blog.
I know what you’re thinking, that all sounds quite technical and a little bit dry…
Profiling and segmentation (which we’ll also touch upon) isn’t a very sexy subject I’m afraid. However, it’s crucial to your marketing strategy - if you want to be successful.
Maybe picture it a bit like Harry Potter. You know, the books/films about the boy wizard that engorged the minds of teens for a good 10 years in the early 2000s. Well, anyway, when the new witches and wizards arrived at Hogwarts School, they were placed into specific houses (groups) by a sorting hat.
A pointy hat that had a face and could talk…
It sorted the students depending on their qualities, such as bravery, cunning, chivalry, resourcefulness, etc. And then which house would help to both challenge and bring out the best in them.
You’re prospects and customers are trying to be the best ‘them’ they can be. You and your products/services are simply there to help them. So, you need to act as a sorting hat of your own. Use what you can learn about your audience to put them in the right place and then use that information to ‘speak their language’.
Why customer profiling is crucial to your marketing strategy
At the core of marketing lies communication, in all its wonderful forms. And, whether B2C, B2B, or B2G - you are communicating with people.
People, though seemingly complex, can be understood in a marketing sense. When you understand them, you can better cater to their needs, tailor your messaging, and provide an incredible level of service at each stage of the customer journey.
Great customer service is what will set you apart. Research shows that it’s becoming less about the product and pricing. After all, there are thousands of carbon-copy products and services available worldwide. What really sets you apart from the competition today, is the customer service you provide.
73% of customers agree that customer experience helps to drive their buying decision. (PWC)
86% of customers say that they are ready to pay more if it means getting a better customer experience. (Super Office)
49% of customers agree that they have made impulse purchases after an excellent, customized personal experience with a brand. (Dot Digital)
Businesses that prioritize customer experience have a revenue increase of 4-8% higher than their competitor. (Forbes)
It’s important to remember that the customer experience starts with the first touchpoint with your brand. Though many businesses focus solely on the sales relationship, or worse yet, what happens after a consumer has purchased. It shouldn’t all be down to post-purchase customer support; your marketing team is the instigator of a great customer experience.
Customer profiling & marketing automation
Before we move on, I just want want to highlight the relationship between these two. When you profile your customers, you can make better decisions on how you use your marketing automation.
And vice versa, marketing automation can support your profiling activities.
Your automation platform should come with segmentation options. When you use segmentation you learn more about your customers. Tracking how and what they interact with provides insights into their behaviour, psychographics, and even some geographic and demographic info. The former is the real powerful stuff, it’s what will bolster your marketing communication strategy more than anything else.
So, how do you know what to segment by in the first instance? This is where your customer profiling will come in.
You’ll have done the work to create groups and segments based on their similarities. With these, you can create specific tags to collate new leads and contacts in your mailing lists. Then, you’ll target accordingly.
Related content: What is Customer Segmentation?
Customer profiling supports more than just your marketing strategy
Having well-curated customer profiles can teach you who to target, the best ways to reach your ideal customers and what to address when you do (content). But, it can filter through to other areas of the business.
You are marketing either a product/s or service/s of sorts. So, how does your business know what its offering is what a market truly wants or needs?
Clearly, you have already identified a requirement, otherwise, your solution wouldn’t exist. But to ensure you continually meet consumer needs in regards to your products, you need to know your customers.
Sometimes it’s easy to become detached from consumers. Designing what you think they want or need, based on the opinions of your team around you. However, unless you really understand the end-user, then it’s basically just guesswork.
In 1984, Orvel Ray Wilson famously said: "Customers buy for their reasons, not yours."
The data is available, so use it. Make decisions based on your customers, not your business.
Other ways product and operations can benefit is by knowing how best to deliver the solution, and what support your customers are likely to need.
The 4 main types of customer profiling & segmentation
As I mentioned earlier in this blog, geographics, demographics, psychographics and behaviour are the four types of profiling we generally focus on when creating segments. Let’s dive into what comprises each of these.
Location can be important, if you can’t provide your products/services to a specific area, it’s important that you remove it from your communication. The same can be said for if you want to target a particular area. Perhaps you have a sale in-store (or similar), and you want those local to that store to be targeted about it.
Geographics can also provide more than just location data. For example, knowing the climate could be key - you wouldn’t attempt to market warm woolly jumpers to someone living in 30+ degrees celsius.
Here are some of the categories that make up geographics:
Another one of the more straightforward segments of customer profiling is the who. Demographic information is often easily accessible through census data, analytics software, consumer insights, and more. It’s a simple way to begin grouping your customers into smaller market segments.
It’s a good starting point to decipher possible common interests based on market similarities. For example, a group of 18-25-year-olds will likely be interested in something different than 45-55-year-olds. Their income and living circumstances will likely be different too. For B2B, a smaller company might have a smaller budget or less staff involved.
All that data will help you paint a picture of our audience, and to tailor your messaging appropriately.
For demographics, you’ll be looking at:
(The last two being important for B2B marketing.)
Psychographics (What & Why)
This is where things start to dive deep into personas, personalities and character traits.
Psychographics are the puzzle pieces that provide all the details on a person. What they are interested in, what they value and believe in. Why they are looking for a solution; the problems, motivations and desires.
This is gold dust. It is information that will allow to you create a story that can capture an audience, put them at the heart of it and take them on a journey that feels relevant and compelling.
You really need to bring psychographics into the equation. If you focus solely on demographics and geographics, your marketing efforts won’t be as effective. I’ll introduce the ‘Princes Parable’ in just a moment, which will explain exactly why.
So, psychographics is made up of:
Behaviour (When & How)
Tracking the behaviour of your audience provides useful insights for when and how you should target them.
You can also measure how current customers interact with your solution. This will help you to intervene if things aren’t going so well, to provide a brilliant level of customer service and support.
It will also offer information that can help you with marketing to prospects. We all know how well testimonials and case studies perform in converting new customers!
Here are some of the metrics you can track:
Loyalty/time as a customer
The Princes Parable
Right, time to make things a touch clearer. You may have come across The Princes Parable in one of our other blogs, but just in case here’s the juice.
Say a luxury car company has a new model to sell, and they want to determine a specific group of people to target their advertising. This is a group that is most likely to buy - the ideal customer. So, they work hard to create the right buyer persona:
Seems pretty bulletproof, right? It provides a good point of reference for an agency to pull a robust communication plan and target adverts accordingly.
And that’s exactly what happens.
On paper, it looks great. But in reality, there’s a problem...
The ads and messaging need to differ more than you might think. In this instance, there are two gentlemen that fit the persona. However, they are actually poles apart. What attracts one of them to this new car model is entirely different than what attracts the other...
And that’s because one is Prince Charles:
And the other is the Prince of Darkness, Ozzy Ozbourne:
This is the Princes Parable.
The profiling exercise fails because the persona they have built doesn’t take into consideration the human side of things. All the stuff that makes us like or dislike products. The character traits, beliefs, motivations, influences, and interests.
What we call psychographics.
If you don’t take your profiling further than simply geographics or demographics, your messaging won’t be effective. You’ll cast a net so narrow that you’re guaranteed to reel in a small catch.
How to profile your customers
First up, consolidate your current data. If you have been tracking customer engagement, or you can identify your customer's different profile traits, you can create a picture of the type (or types) of customer you already supply.
If you do have customers, ask them. It's the best way to truly know your customers. Don't feel awkward about it, make it clear that you care, so the information they provide will help you better serve them, and others. You could always offer an incentive to get their cooperation - it will be worth the investment. Plus, those who engage, are likely your most loyal customers, and that's always good to know!
Make sure to ask the right questions. There's no point gather data that won't be useful.
Think about the questions your audience would be asking on Google. See what comes up - look for forums and get stuck in talking and listening to those people.
Through research, gathering data, and reaching out, you’ll start to paint a picture of the types of people looking for the solution you can provide.
Another important thing to remember is that people change, as do their interests and habits. Therefore, it’s important to move with them, refresh your profiles, lookout for new trends to track. But, reinvent the wheel only if it will be beneficial to you.
Remember, don't chase after or record data that isn't beneficial to your business or your marketing strategy. Make a clear list of what you will actually use, then plan the best way to obtain that information.
The Princes Parable will most likely cause a problem, which is why psychographics are an incredibly important part of your profiling exercise. Marketing is so much more about the why we buy than the what and how. By collecting psychographic data, and focusing on those things in your messaging, personalisation and targeting will become that much more effective.
Use everything you learn about your audience to provide the best customer experience possible.
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