Harvard business review presents a study of 30,000 new product launches, and evaluated that 85% of the new products fail (Harvard Business Review, 2018). Surprisingly, the main reason for this was not down to the product itself. It was because these businesses were unable to get the right message to the right people.
This demonstrates the ultimate importance of profiling your customers. This is because every business needs to get the right message to the right customer.
Customer Profiling Definition – Customer profiling is the process of getting to know your customers. By this I mean understand their opinions and characteristics. You then collect this information and form into easily manageable structure called customer profiles.
In this article, we highlight what customer profiling is, and why everyone needs it.
What Is Customer Profiling?
Customer profiling is the process to create a picture of your customers, behaviours and their characteristics.
This picture of the customer captures everything about them from what they look like, their desires, failures and goals in life.
Obviously, not everyone has the exact same looks, desires and goals in life. Therefore, it becomes the marketer’s job to outline similarities people share, and find a coherent way to deliver to the wants and needs of these people.
After doing your market research you will group of people by their similarities.
A photo, a name, and a description represent each group. These are the essentials used to create a persona. A persona is a single profile that depicts the group of people.
The customer profiles are the groups of personas that represent each group.
2. Why Is Customer Profiling Important?
Customer profiling is one of the most important activities your business can undertake. This is because by knowing whom your customers are informs the strategic direction.
2.1 Knowing Your Customers Informs Your Strategy
Customers are most important to any business, and marketing should be the central component as this is our communication point to those people.
Therefore, it is essential to understand the people we are speaking to.
To do this we need to find the answers to TWO questions.
- Who are the types of people that purchase your products?
- More importantly, how rigorously do these different people purchase?
By answering these questions, we can begin to understand which people really matter to our business.
If you have identified a group of people that consistently buy your products, then you should be speaking whenever possible to these people.
2.2 Why Do You Need An Informed Strategy?
By knowing which people matter the most, you can begin to position your message to them.
By knowing your customer and where they hangout, you can then start to make yourself more competitive in that market.
This is because you can take a generic marketing message and tailor it more specifically on a personal level.
This will not only enhance engagement but make customer feel a stronger connect towards your brand. Whether you are launching a new venture or are running an existing one, knowing what kind of people you are targeting and how to reach them is necessary for success.
You may have an extraordinary product or service, but if you are not getting it directly in front of the people who need it your venture will struggle.The alternative to a strategy is mass marketing
The default technique without segmentation is called mass marketing. This includes throwing out a general message that is trying to attain all of the customers. There is a famous saying:
By trying to please everyone you end up pleasing no one.
This statement is so true on so many levels – and as a marketer you need to leverage this in accordance to ones phycology. Michael Cirillo, marketing guru states: “Great marketing should attract the right audience and repel the wrong one”
This is the polarising effect, which is all about how to position your message based on the target audiences outlined from the segmentation process.
3. The Customer Profiling [#5 step Process]
Having a process driven strategy is massively important and is makes the objective clear.
When we are performing a customer profiling exercise, it is boiled down to a five-step process.
The process for customer profiling is highlighted in the below image.
- The first step starts by forming a picture of the industry. This is outlining the competitor landscape and the products they sell and trying to identify who they sell them to.
- The second step is to create segments of all the customers in the market.
- The third step is to identify which customers are worth targeting for our organisation.
- The fourth step is to identify the process by which our target audience go through to make a purchase in the customer journey.
- The final stage is analysing the positioning of our key messages in relation to the stage of their journey. In the below process the customer journey is laid out as new leads, qualified leads, opportunities and won.
4. Customer Profiling Process Model
I have set the customer journey out from news leads to won. This is because this consensus captures the most generic customer journeys at its simplistic form.
4.1 Market research
This is the process of collecting and gathering as much information in the market as possible.
4.2 Customer segments
This is the process of dividing the market into meaningful groups of people.
4.3 Target customer
Performing a market segment analysis is the key to focus your marketing efforts on the most promising groups of likely customers and clients.
This stage we are selecting the most preferred segments.
This is the process of evaluating, from justified variables, which segments are most meaningful.
4.4 Customer journey mapping
Overall, the end goal should be to have a tailored message for each segment and each phase in the purchasing cycle.
By outlining where they are in their purchasing journey we have provide a message specific to their needs at that point.
This speed up the purchasing process and reduce chases of churn.
This is the process of designing a unique marketing mix for the target segments.
In this article, we discussed customer profiling and we have broken down the five stages of conducting a customer profiling exercise.
Also known as personas, customer profiles are created from an understanding of the typical audience generated from market research.
It is essential to educate yourself in the markets you plan to concur and clearly define your segments in that market.
Getting this information down to its most microscopic level is no easy task. It used to take months or even years of analysis and market research. But, with the use of Google analytics and social media you can build profiles relatively quickly.
If you are able to build, new segments your competitors do not know will give you an edge.
This is because you are able to target these people in new and creative ways to grab their attention.
Bizjournals.com. (2018). [online] Available at: https://www.bizjournals.com/bizjournals/how-to/marketing/2017/03/why-so-many-new-products-fail-and-it-s-not-the.html [Accessed 28 Jun. 2018].
Harvard Business Review. (2018). Why Most Product Launches Fail. [online] Available at: https://hbr.org/2011/04/why-most-product-launches-fail [Accessed 28 Jun. 2018].