By CommenceCRM

What are the Advantages of Customer Profiling?

two older people consulting with someone with papers on a table

Customer profiling is a strategy that looks into the characteristics of existing and potential customers to create tailored advertisements. It aims to know more about a certain target audience and evaluate the similarities and differences among them. There are many benefits of this strategy that all help businesses grow and develop in the long run, like increasing profit and engaging more customers.  

So how can you grow a business through customer profiling? After identifying the importance of customer profiling, you should learn how to create the ideal customer profile template then analyze the different methods of how to create better customer profiles. 

Importance of Customer Profiling

To have a better grasp about customer profiling, it’s important to first understand its importance for a business. Customer profiling helps create more structured marketing plans and has other benefits including the following: 

1. Increases Profit

When a marketing strategist or advertiser identifies a customer’s profile, they’re able to create ads that are suited to a specific target audience. Better ads that appeal to your customers are able to attract more people to buy a business products and services. This increase in sales eventually leads to an increase in profit in the long run. 

Customer profiling also helps determine the customer’s satisfaction about a certain product or service. Given this information, a marketing strategist or advertiser can determine which product does better than others and create specific advertisements around the item. 

2. Engages More Customers

Knowing more about certain customers allows advertisers to create more engaging advertisements for specific groups of people. As a business owner, customer profiles make it easier to communicate with the intended target audience. 

For example, when advertising a new product, you would want to determine the age group that’s most likely to purchase the product. Afterwards, you can create marketing campaigns about the product that are more relevant to the audience’s generation. 

3. Makes Marketing Easier 

Profiling customers helps marketing strategists be more strategic and creative when creating marketing campaigns. You wouldn’t want to advertise a certain product or service to people who are not interested in it — that would simply be inefficient. 

Instead, it’s better to study the people who have shown interest in what your business has to offer and tailor specific advertisements to appeal to that audience. This makes marketing easier since you’re not wasting time and effort on coming up with useless marketing campaigns.  

One of the best ways to make more interesting and engaging marketing campaigns is to look at the data you have and treat it like characters in a book or story. Get into the minds of potential and existing customers and understand who they are as people by merging the qualitative and quantitative data available about them. 

4. Helps Understand Your Customers Better

Customer profiling helps business owners make more objective decisions because it helps analyze who their customers are, what they do, where they live, and how they spend their money. This is also helpful in creating new products since it provides a baseline about what certain customers are already interested in buying. 

The Ideal Customer Profile Template

Having a customer profile template makes it easier for business owners to determine their target audience. Gathering this information can consume a lot of time, but it is extremely helpful for future marketing strategies and business decisions. Some data to you want to gather about your customers are the following: 

1. Demographics

Demographics is the most basic information about your customers, but it’s the most important out of all. Here are some helpful demographic data to collect:

  • Age
  • Gender
  • Marital status
  • Educational attainment
  • Ethnicity
  • Job

2. Geographics

Geographics refer to the place where customers are located. Some categories that geographics cover are the following: 

  • Towns or villages
  • Cities
  • States
  • Countries
  • Postal code or ZIP code

3. Psychographics

Psychographics talk about the beliefs and values of a person and ask why customers buy certain products and services. It focuses more on their personalities rather than outward attributes. This can be influenced by one’s socioeconomic status and usually includes:

  • Interests
  • Opinions
  • Priorities
  • Habits
  • Lifestyles

4. Behavior

Identifying a customer’s behavior typically includes what they feel and how they react when they buy certain products. Here are the 4 types of consumer behavior that describes your audience:

  • Complex buying behavior: This kind of behavior usually happens when a customer wants to buy something expensive and doesn’t normally purchase. Before buying this certain item, a customer will do their research and consult with their peers. This person will first develop some opinion or feelings before committing to the product. 
  • Dissonance-reducing buying behavior: Dissonance-reducing buying behavior happens when a customer doesn’t have a lot of options and has a difficulty in determining which brand to buy from. This usually leaves customers with limited decision making since they have certain restrictions like availability, time limitation, and budget.   
  • Habitual buying behavior: A habitual buying behavior is when a person doesn’t perceive a lot of differences between brands and there is little to no research exerted when purchasing items. Habitual buying behavior is best exhibited when a customer goes to the grocery store and picks items that they are already familiar with and uses regularly.  
  • Variety seeking behavior: Variety seeking behavior is when a customer often tries out different brands. When a person buys a new product, it’s not because the previous one they bought was unsatisfactory, rather, they buy new products out of curiosity. This behavior is usually seen when there is a low cost of switching between certain products.

5. Buying Patterns

Buying patterns indicate when customers tend to buy certain products or services. Some customers may regularly purchase specific products and services, while others may only do so on certain holidays. To better identify buying patterns, look at how often a customer goes grocery shopping and what they usually buy when they go to the grocery store.    

This category is also influenced by the groups of people who usually surround an audience. For example, a customer’s family, friends, or neighbors can all influence what they normally purchase. 

Tips on Creating Better Customer Profiles

two people sitting in a meeting signing a deal

Having an ideal customer profile template is not enough to help a business grow — you have to dig deeper and know how to create better customer profiles. Here are some tips on how to create better customer profiles: 

1. Analyze Web Traffic

Analyzing web traffic doesn’t solely include people who have bought items from your shop. Marketers can also create better customer profiles by looking at their social media followers, people who frequently visit their site, or people who have profiles on their website. There are also a variety of tools online that can help determine and analyze your web traffic.  

2. Keep Profiles Up to Date

It’s very important to be consistent with keeping customer profiles up to date because information about customers can change over time. Doing this regularly can help you monitor the changing wants of certain customers based on their specific needs and market trends. 

Customer profiles should also be consistent, meaning they should all be kept in the same format. Dealing with inconsistent profiles can be exhausting and may even do more harm than good for your business. 

3. Survey Your Customers

One of the best tips to create better customer profiles is to survey customers and directly ask them what they think about specific products and services. This also helps determine if any preferences of your customers have changed over time. When surveying your customers, factor in specific information like their age, gender and location. 

Here are some common questions to ask your customers during a survey are the following:

  • How satisfied are you with our product or service?
  • What did you like about our product or service?
  • What do you think our product or service can improve on? 
  • What kinds of products or services do you want to see more from our business? 

For better customer participation in customer profiling surveys, you may choose to include incentives like giving them discounts or free products. 

4. Understand Your Industry

The last tip on creating better customer profiles is to understand your industry and what your business can contribute. It’s also best to look into how customers view your brand and what they think its advantage is over others. This includes determining which specific products customers value more and how they tend to use a certain product. 

For example, when releasing a new product, you want that certain product to stand out from your competitors, but you also don’t want your existing customers to react badly to it. To navigate through this issue, you may want to look at your existing competitors and analyze how they were able to penetrate the market. 

Customer Profiling with Commence

Customer profiling can be a tedious process since it involves gathering several data from a large number of people. Luckily, technology has made it easier to collect this information to help grow your business. Here at Commence Cloud CRM, we provide businesses with a customer profile software so they can build better relationships with their customers. 

Our software is built for small to medium-size businesses, assisting you in crafting more personalized messages for your audiences. Commence Cloud CRM guarantees our clients a customer profile software that helps them generate more revenue. Get started today to know more about how our products and services can benefit your business.