If you don’t, you’re losing lots of business
Hopefully you know which of your customers spends the most money. And you might have some additional anecdotal evidence about them, but you probably haven’t dug deep enough.
“Customer Profiling is the process of using relevant and available information to describe the characteristics of a group of customers and to identify their discriminators from other customers or ordinary consumers and drivers for their purchasing decisions.” (source)
In layman’s terms, customer profiling is about segmenting and defining customers into groups, to better understand them. Questions you’ll want to answer, include:
- What are the major demographic attributes of your customers?
- How do they spend money inside the household?
- What do they buy?
- Why do they purchase your goods and services?
- Where would you find more prospects similar to your most valuable customers?
These are all very valuable data points. You should have answers to all of these questions.
Factors in Customer Profiling
Lots of factors go into a deep customer profile, including affinity profiling, demographic and psychographic data, lifestyle coding, mapping, cluster coding and survey data.
You can also take a simpler, less data-intensive approach, which Pandecta Magazine suggests:
- Read any and all customer feedback attentively. How are customers defining things?
- Subscribe to newsletters that target your audience. Understand the lingo used and why it’s used.
- Attend conferences & trade shows whenever possible for the face-to-face connections.
The issue with customer profiling is that it can still leave you with a fairly impersonal view of your best customers.
Customer personas are a way of further elaborating on a customer profile. They help tell a story of an individual customer – as deep and thorough as you can possibly go.
Think of it like customer storytelling. “These are prototypical, but fundamentally real, stories of the multidimensional lives of specific customers.”
Customer personas go so far as to give your customer a name and a picture. This fascinates me. I would have never thought to take it so far, but I know companies that do so successfully, including Montreal-based Ice.com. They have a complete image of what their target customer looks like.
Are Customer Profiles and Personas Necessary?
Yes. And they can be applied in so many cases.
- Customer decision-making processes online – How do customers purchase from your website? How do they use your website?
- B2B marketing – Who is the decision-maker? What are customers expecting the product to do?
- Customer service – How do you recognize different types of customers? How do you tailor specific services to customers?
Startups Have a Bigger Challenge
Startups have a bigger challenge than non-startups because they don’t have any customers yet. So there’s much less data to rely on. And they may be moving at breakneck speed towards launching their product/service without even knowing the customer at all. It’s a risky proposition but not that uncommon. “Build it and they will come…” Who exactly? Um, good question…
And when a startup does figure out who the customer is, or they make a decision to go after a specific market, the next challenge is how to move from there. What’s the next target market? What’s the next customer look like? A lot of startups never get to that point, their growth stumbles and they run into trouble trying to be everything to everyone.
You Need to Know Your Best Customers
Your best customers are the key to unlock other customers like them. But it’s not enough to say, “Our customers are large financial institutions in the Midwest.” That may be true, but it’s too generic, too bland and unspecific. You haven’t figured out the customer’s personality.
Your customer is a person. Not a company, entity, corporation, department or thing. Your customer is a person. He or she has a name, a face, a position, goals, dreams, hobbies, an income, family, traditions, beliefs, buying power, likes, dislikes, etc. Know thy customer. Define them. Create a persona. Then find everyone else that’s similar and sell like crazy.