Building a customer profile

It seems an obvious question – but do you know who your customers really are? Developing an accurate customer profile and picture of your customer is a fundamental basic for developing a successful direct marketing programme. The ability to describe your typical customer in a few short sentences is a valuable skill.

Four key reasons for building a customer profile

1) Having an accurate picture of your customer helps you determine how to market your offer to them effectively – from creating relevant messages to knowing how to reach them and when it’s a good time to talk.
2) Knowing who buys your product or service can help you to make informed product decisions – such as introducing a new product line, new customer service hours, enhancing an existing product offer or being aware of what features are important to which customers.
3) Understanding which customers are the most profitable and the level of servicing required to retain each piece of business.
4) Knowing which customer types are the most loyal and who will switch to competitors because of a price or benefit promotion.

Customer profiling can provide a range of insights to a business willing to invest time into this process.

Building a customer profile

When building up your profiles the “whowherewhat” questions are likely to vary depending on whether you are targeting consumers or other businesses. You may be surprised by the level of existing information you already have about your customers and how they interact with the business.

Consumers:

1. Is the decision-maker for your product male or female?
2. How old are they?
3. Where do you they live – urban, semi-urban, rural or remote? Are your customers in NZ, other international countries or are they global?
4. What is their average income?
5. What is their family size – single, married, children, grandchildren?
6. What other products do they buy? – this could provide insights on a joint promotion opportunity.
7. What lifestyle and purchasing insights do you know about your customers – such as their hobbies, where do they holiday, are they health-conscious, are they environmentally friendly, are they price-sensitive?
8. How do they like being communicated to – post, e-mail, telephone, SMS?
9. When is a good time to talk to them?

Businesses customers:

1. Who is the decision maker?
2. What industry or industries is the business in?
3. What size business – SMEs or corporate?
4. Where are they located? Are your customers in NZ, other international countries or are they global? – this information can help you with geographically based targeting and resourcing
5. What is their procurement process for this type of purchase?
6. What other products/brands/companies do they use? Identify bundling opportunities, joint promotions opportunities and likely price comparisons.
7. What other insights do you have relating to their purchasing decisions – are they price sensitive, service conscious, do they consider total cost etc.
8. What are the current business objectives – customer acquisition, retention, new product launch etc.
9. How do they like being communicated to – post, e-mail, telephone, site visit?
10. When is a good time to talk to them?

The ideal profitable customer

When you analyse your current customers you may realise that they are far from your ideal customer. Your customers may be costly to serve or have a high cost per acquisition. In the same way as you profile your existing customers, it’s important to develop a profile of the ‘ideal customer’ for your business.

A useful example that was relayed to me was of a large accounting firm reducing the number of clients they served from 1300 to 30. This new strategic decision was based on an insight gained from auditing the cost of servicing each customer. The reduction in customer base increased their profitability and allowed them to define their ideal customer for future acquisition.