What is a Customer profile?
Customer profiles make up the integral part of a CRM system in order to be effective and efficient. A customer profile describes a particular class of a customer. The customer profiles within the CRM software will be highly helpful in tracking and monitoring existing and potential customers. Customer profile in CRM will capture what is happening inside the CRM software that lets you know of the connections and communications between you and your customers based on plausible events and history.
Customer profiling does not replace the traditional demographics, but then they are used as a means to complement your workflow as you communicate with the customer touchpoints.
Customer profiling is an excellent way that helps to visualize the types of customers you actually interact with. You can analyze the customer types in order to solve their expectations and pain points in an outstanding way. You can also personalize the messages and tailor the products & services for a specific group of customers in order to develop a competitive edge and attract more audience towards your offerings.
Definition of customer profiling
Elements of a customer profile
There are some essential elements that need to be included in the customer profile.
Demographics: You can segment the customers based on name, age, gender, race and ethnicity.
Socio economics: Socio economics includes the customer’s education, income level, occupation, marital status and so on.
Geographic: The Geographic location includes the hometown of the customers, their current location and characteristics of the neighborhood.
Psychographic: You can analyze the customer behavior and beliefs such as personality traits, attitude, behavior, interest, values and lifestyle.
Behavioral: It influences the buying behavior of the customers and what motivation is required in order to make them purchase the company’s offerings.
RFM: Recency – How recently a purchase has been made by the customer.
Frequency – How often the customer made the purchases.
Monetary value – How much money a customer spends on a particular purchase.
Importance of customer profiling
Customer profiling paves the way to plan a structured approach to marketing and employing customer profiling is vital for the success of the organization.
1.Escalate the profit numbers
When a marketer gets a good understanding of the customer profile, they are likely to create ads that are suited to that segment of audience. Ads curated specifically for different segments will bring in more response and will result in purchases. This will expedite the sales growth that results in long term profitability of the company.
With customer profiling, you can have prompt communication with the target audience. By creating engaging ads, you can attract attention from the customers. Thus you can tailor the marketing campaigns to tap in more customers which will thereby increase the engagement rate.
3.Marketing made easier
Customer profiling has helped marketers devise superior marketing strategies. Knowing who you are going to target is very important in order to create marketing campaigns that would suit their needs and preferences. This will end up in saving a lot of time and effort for your business and rather result in maximum productivity and profitability.
4.Help understand the customers
You can make objective decisions based on the customer profiles, as you have a complete overview of who your customers are, what their preferences are and how they spend their time and money. You can curate your offerings based on their behaviors and preferences. Knowing your customers plays a pivotal role in the growth of your business.
How to create a better customer profile?
Having a customer profile is important, what is more important is you need to create a better one. Here are some tips for creating a better customer profile that will be useful for your business.
1.Keep customer profiles to date
You need to build a consistent format on customer profiles. You have to update each and every information up to date. The reason behind this is customers are changing, their needs and preferences changes, their attitude and behavior change with time. Hence it is very important to keep the customer profiles up to date. If you keep irrelevant data in your customer profiles, it might cause harm to your plans and decisions.
2.Analyze website traffic
You need to check up on the leads and analyze the traffic that your website receives. Also, you have to know about your social media followers, how are they reacting to your posts online. You need to make a note of who is interested in your website content. Tapping those visitors will help increase your conversion rate. There are many tools available online to analyze the website traffic and you can use one in order to keep track of the visitors.
This is one of the proven methods of understanding your customers. You can take up a survey and ask customer related questions in order to know their requirements and preferences. You can also ask ways to improve your product offering, which will in turn build more attachment towards the brand. When you are concerned about their likes, wants and preferences the customers are likely to be inclined towards the brand which will increase brand loyalty and trust.
4.Understand your Industry type
You need to have a clear understanding of the type of the industry your business serves. This will include having a precise outlook on the products or services you offer, how it is better than the competitors, how it can improve better, will it fit to the needs of the customers and how are we going to acquire the market share. All these factors are to be taken into consideration which will help you develop a competitive advantage against the rivals in your industry.
B2B VS B2C Customer profiles – What is the difference?
B2C customer profile
B2C refers to any transaction in which the business directly sells it to the customers. In such customer profiles you can address the customer’s needs, preferences, pain points, frustrations. All such information will help you analyze how your offering is going to help the lives of the customers.
Customer profile elements for B2C business model
1.Customer’s Demographics – This section includes the age, their sex and their current geographical location.
2.Customer’s educational background – This section includes their educational information, it helps to create a segment among well educated and uneducated customer groups.
3.Customer’s socio economic status – This section helps to understand the annual income, their status and their affordability.
4.Job role and position – This section includes the current job description, the role and title of the customer.
B2B Customer profile
B2B refers to doing business with professionals and higher level executives. The customer profiles include profiles of business owners and other policy makers who influence and make decisions in their business. They have their own set of objectives and perspectives for the business.
Customer profile elements for B2B business model
1.Value proposition: How does your offering add value to their business, what problem you are trying to solve through your products or services.
2.Nature and business size: Which business you are currently serving, to which industry they belong to and how big or small is the size of their business.
3.The unique selling proposition: What is their USP for their customers, and what is your USP for these businesses.
Benefits of Customer profiling for your business
Customer profiling helps businesses to optimize their business processes in a big way. Some of the benefits of charting out the customer profiles are given below:
1.Target the audiences
You can pinpoint and target the audiences by using the customer profiles. You will have the ability to tailor the messages and communications based on the interests and preferences of the customers. This will increase the engagement and drive more sales.
2.Increase the response rates
With customer profiling, you can communicate with the right set of audience at the right time with the right message. Knowing the customers well, will be helpful in nurturing them in a better way and turning them from prospects to customers. You can boost the response rates with the help of the customer profiles.
3.Enhance customer acquisition
A customer profile will help you understand the customers and also attract the prospects into the funnel. You can acquire more customers if you make use of the information present in the customer profiles. Acquiring customers is one important way to build your business in an effective way.
4.Make data driven plans and decisions
A customer profile will help you understand the current market trend and the probable market potential. You can make data driven plans and decisions in order to improve the customer lifetime value and acquire market share. Customer profiling favors growth and stability for the organization.
5.Improve operational efficiency
You can better analyze the demands, the sourcing and manufacturing techniques which will help in removing the bottlenecks. Customer profiles improve the operational efficiency of the business by predicting and responding to the customer issues.
6.Build brand loyalty and maximize profitability
Customer profiling will help the business understand the A-Z of the customer which will enhance and smooth their connection in a better way. You can solve the problems of the customers which will help you build the brand image, create loyalty and thereby maximize the profitability of the firm.
Customer profiling is a tedious method as it involves a lot of information which needs to be gathered from various sources. But technology makes it easier for you to break down the tedious and difficult tasks. With CRM, you can create better customer profiles which helps in collecting information from varied sources and further helps in optimizing superior customer relationships.
A CRM system provides a centralized platform where businesses can organize and store customer and prospect information. You can track customer interactions and share useful information across multiple teams. With CRM in place, you can build and manage effective customer relationships.
Customer profiling helps you gather insights about the customers which helps you to tailor messages and deliver products in favor of their needs and preferences. You can also provide superior customer service by understanding the customers in a better way. Providing prompt customer service increases trust and builds loyalty.
There are three basic types of customer profiles. We can chart the profiles based on demographics, psychographics and behavioral segmentation.
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