To Know Thy Customer is to Love Thy Customer...
I’ve had the good fortune to work with a lot of really smart marketers over the years and I’m frequently amazed at how many of them don’t really know their customers. I mean really know their customers. Oh sure, over the years they’ve developed generalized, anecdotal depictions of “the” customer. For B2C companies, these intuitive descriptions often include approximate ranges for age and income, a few likely lifestyles, and perhaps the average amount they spend and how frequently they buy every year. They’ve used these customer guesstimates to drive dozens or even hundreds of marketing campaigns and to their credit they’ve had some degree of success.
So what’s wrong with that? Well, several things actually.
First, all customers are not the same. Your business likely has many different types of customers, each with their own unique characteristics, interests, needs, and reasons for buying relative to your company.
Second, customers don’t stay the same. Over time their needs and interests evolve and change, sometimes quite rapidly. Keeping abreast of those changes will enable you to continue to appeal to them with relevant content and products and ultimately retain them as customers.
Finally, customers interact with your company in a real-time, multi-channel world. Your understanding of customers must be multi-dimensional and consider all possible touch points along their journey - not only what they’re buying but what they’re saying, what they’re doing, and what they’re liking.
Customer profiling is a way to create a detailed portrait of your customers to help you make informed decisions not only about your marketing, but also about your company’s products and services. Developing a truly holistic and timely view of each of your customer groups is a key part of successful data-driven marketing and can provide your company with some great benefits:
- Enables you to use factual knowledge of customers to more effectively push relevant content and experiences to customers. By understanding more precisely who/what each of your ideal customer groups are, you can engage them with more personalized and compelling interactions when, where, and how they want them.
- Helps you increase customer lifetime value. Staying informed about your customers over time helps increase lifetime value of customers because you are better able to engage them over the long term.
- Allows you to identify new business opportunities. Improved understanding of customers reveals opportunities to develop and sell new products, services, marketing strategies, etc.
- Profiling your best customers makes it easier to find new ones. Knowing the who, what, where, and why of your ideal customer groups will also help you find similar prospects and sell to them in a similar way. Profiling can also provide the building blocks for more advanced methods for targeting and personalization such as predictive modeling and segmentation strategies.
In summary, customer profiling can provide your business with not only a more precise view of its best customers, but will also offer insight into what sets your company apart from the competition in the eyes of your customers. Armed with customer profiles, your company will be able to define more effective communications strategies and identify new opportunities for selling products and increasing sales.