What is a customer profile? From the name, you might think that a customer profile records the traits of a single person who buys from you. While you might apply the term in that way, it can be much more than that. In this context, a customer profile represents everything you can discover about your ideal customer.
The Pareto, or 80/20, principle holds true for most businesses. In short, it says that 80 percent of your sales come from 20 percent of your customers. Naturally, these would be the customers you’d most like to attract and retain.
Since the other 80 percent of customers will likely have at least some things in common with your top 20 percent, you won’t necessarily lose them when you focus energy and resources on the ideal customer group. Plus, you’ll sell more to high-value customers and satisfy their needs better. Your customer profile contains the information you need to do this effectively.
The Types of Data Used to Create Customer Profiles
To begin customer profiling, identify one group of ideal customers. Later, you can drill down to finer details, creating several profiles that represent great customers. You need not use your imagination. The information you need is in your data, and you can fill any gaps by looking at external data and by conducting market research. The information you need includes:
- Demographics: Here, you’ll investigate factors like age, gender, income, family composition, and preferred sales channels.
- Market insights: Using external data, you can uncover details showing what products and services your profiled customer enjoys. Although you may not be competing in these niches, market insights give you a more holistic view of where your product or service fits into customers’ lives.
- Customer behaviour and buying journeys: Find out how customers interact with your business. How would they typically find out about your products? What do they do next? How do they prefer to communicate? What prompts them to engage? Along with the other information you’ve gathered, this data helps you to understand customer needs more clearly.
B2B vs B2C Customer Profiles
In a sense, B2B and B2C customer profiles are very similar. Both types of businesses profile the ideal customer. However, the data you use when developing B2B customer profiles will look somewhat different. For example, instead of capturing demographics, you would classify business clients according to factors like business size and industry. However, every business’s buying decisions are made by people, so although their focus is different, human factors are still of interest.
Benefits of Customer Profiling
Summing up the benefits of customer profiling, having a deep understanding of your ideal customers helps you to attract, serve, and sell to them. This has multiple ramifications. For example, you can:
- Develop new products they’ll love.
- Optimise communications for relevance and engagement.
- Gain more precise insights into market share and business performance.
- Optimise your marketing investment while targeting highly relevant, “ideal” market segments and enhancing returns.
- Upsell and cross-sell more effectively thanks to a better understanding of customer needs and motivations.
- Foster greater customer loyalty, reduce attrition, and enhance lifetime value by promoting customer satisfaction.
Examples of Customer Profiles
There are several approaches to customer profiling you can consider. You need not choose only one of them. Different approaches may be useful for different functions. For example, some profiling methods are great for sales teams, while others have more appeal to marketing professionals. Examples include:
Scorecards
Using key commonalities that signal an ideal customer, sales teams can use customer profiles to target outbound sales. Scorecard elements in B2B selling might include Budget, Authority, Need, and Timeline (BANT). For each of these, you can specify an ideal fit, a potential fit, and a poor fit. Identify combinations of elements that would prompt outreach.
Segmented Profiles
Your ideal customers could match more than one profile. In that case, a segmented profile that provides tips for salespeople and marketers on how best to communicate can prove useful. Beware of identifying too many segments – it can dilute your focus and become too complex to be useful.
A Basic Customer Profile
Sometimes, simplicity pays off. A very basic customer profile can be hugely effective, provided you identify your ideal customers correctly. An example could begin with basic demographic information and answer key questions like:
- How do your best customers discover you, research your products, and what encourages them to choose you over competitors?
- Which products do they choose, why, and how often do they use them?
- What are their possible pain points when dealing with your company or using your products?
- What are their goals, and how does your product support them?
Buyer Personas
Although buyer personas are slightly different from customer profiles, using profiling data to construct them can make them very effective tools. Use your data to create a “person” or series of people who represent ideal customers and make them relatable. Understanding their goals, motivations, and challenges can bring a greater sense of warmth, humanity, and understanding to marketing messaging and sales strategies.
Steps to Build Effective Customer Profiles
Develop a template detailing all the things you need to know so that you can better serve your ideal customers. Don’t assume you know who they are just yet. You will find this out as you use your profiling tools. These will include sales histories and information gathered in the customer service and sales process.
Check metrics and analytics, for example, website analytics and social media analytics, to discover what engages ideal customers. Remember, not all engagement comes from your top customers. Choose quality over quantity. Throughout, refer to or adjust customer journey mapping to identify the routes ideal customers follow.
The good news is that most businesses do not need to invest in new tools. They already have a wealth of data. All they need to do is make sense of it. However, don’t get so technology-focused that you don’t take opinions from customer-facing employees on board, even if not all of it is palatable or agrees with your preconceptions.
Their opinions may point toward data you should examine more closely. For example, customer service employees can likely identify customer pain points easily. You can investigate their impact by looking at analytics, customer feedback reports, reviews, and CRM reports.
Your Customers Have The Answers: Are You Listening?
Nowadays, we often become so data-focused that we forget the importance of human contact. While you will find valuable data from self-service interactions, the in-person ones have far greater depth. In short, customer profiling is about customers, so it makes sense to listen to them.
Using your records of interactions, you can find out what people are saying, how they feel, what they like, and what they struggle with. Who is the best fit for your products? Let real customers provide the answers.
Whether you’d like to canvas customers for opinions directly or hope to gather information through sales and support calls, getting the intelligence you need can be easier and more cost-effective than you may have believed.
Make it easy for them to get in touch, and let RSVP respond and gather data. It’s scalable, effective, and you can get a wealth of actionable data from our customer service analytics. Contact us today to find out more about our customer service outsourcing solutions. We do the listening, and you and your customers get the benefits.