Customer Profiling

Customer Profiling, What’s my business with it?

custCustomer Profiling, What’s really my business with it?

In our previous post, Customer Profiling; What is it? What’s my business with it? , we learned about what customer profiling is and gave the one-an-only, legendary beer-diaper decision (again, legendary in its own rights) as a perfect example of customer profiling; and how customer profiling cannot be achieved apart from data mining and analysis.

In this post, I’m going to tell you what your business is with customer profiling as someone who runs a business or who plans to run a business someday.

As a Business owner (Start-up, SME or Large Enterprise), What’s my business with Customer Profiling?

As a business owner, customer profiling should be number one on your ICT strategy. (watch out for my write-up on ICT strategies and its advantages). You should have every bit of business with customer profiling. We’ll discuss a few benefits of customer profiling in the three sizes of business mentioned in this post, i.e Start-ups, SMEs and Large Enterprises.

As a Large Enterprise, What’s my business with Customer Profiling?

A large enterprise is defined as an organization with at least 250 employees. We’ll discuss two benefits (these benefits are not limited to large enterprises but would be fitted more into large enterprises because of certain characteristics of a large enterprise) of customer profiling for a large enterprise:

  • Target Marketing: A large enterprise is expected to have an already existing customer database, hence, making customer profiling in general, a lot easier to achieve. When this existing customer database is profiled into different customer profiles (based on similar characteristics and product / service preferences), Target Marketing becomes more effective. For example, a profile of Video Gamers — that might consist of young male / female customers who, most of the time, purchase or would purchase (since customer profiling is also about profiling potential customers) video games or video game accessories – this customer profile of Video Gamers would  have little or no interest in cooking equipment. Therefore, it would be very ineffective sending cooking equipment promo deals and adverts to your customers that are grouped in this profile. But with customer profiling, you can target particular customer profiles with products more suitable to them. Let’s take the Video Gamers for example, as much as one out of a hundred would respond to your cooking equipment promo deals, on the other hand, you might get a higher response rate to furniture promo deals and an even higher response rate to tv / sound equipment deals.
  • Product Roll-Out Strategies: This is one benefit that can create new customer profiles. Let’s just go straight to an example of this benefit. Assuming you want to include anew product / service into your product line; but you are still skeptical or not certain what the response would be like from your customers. Well, there are two ways you can go about it, by:
    • Targeting all customer via advert and / or other product roll-out tactics and wait to see which customer profiles respond to this new product / service or,
    • Doing a survey by targeting at least 5 customers from different customer profiles you or your team thinks would respond to the new product / service. Involving them in the decision-making and making them active partners –  so to say – of this new product / service. I, personally, believe this is a way better option because involving your customers in some of your organization’s decision making could birth customer loyalty – making the customer feel part of the organization.

Whichever option you go with; a new customer profile can be achieved, depending on how influential this new product / service is as a preferential product/ service.

As mentioned earlier, these benefits are not limited to large enterprises and vice versa, large enterprises are not limited to these two particular benefits.

As an SME, What’s my business with Customer Profiling?

An SME is defined as an organization with an employee size of 250 or less. We’ll discuss two benefits of customer profiling for SMEs (again, these benefits are not limited to SMEs and vice versa). These two benefits are:

  • Customer Loyalty: As an SME, you’re either looking to grow your customer database or comfortable with the existing size of it. Either way, every organization needs customer loyalty (SMEs, more than others); and customer profiling is one way to achieve this. How can this be? We need to understand that our customers are real human beings and not money dispensing machines; and as human beings, we each have our different and unique “love language
    Joanne’s “love language”

    Now, this “love language” is dependent on what the recipient loves or likes and not what the sender loves or likes to do. In other words, you buying flowers for your beautiful wife every now and then is dependent on if she loves or likes to receive flowers, hence, her “love language”. Customer profiling can help SMEs understand and discover their customer’s love language because you get to understand more about your customers in the process of profiling them. Don’t get me wrong, I’m not saying you can discover this love language for every customer; but for the few that it can be discovered and acted upon will be made loyal customers for life. We also need to understand that “loyalty is not a phase, it’s a journey“. Rebecca Otis, a Salesforce Marketing Consultant has a great post on customer loyalty, here’s the link Customer Loyalty Programs.

  • Customer Retention: This term, customer retention is, sometimes, used interchangeably with customer loyalty but I believe loyalty speaks more of long-term whereas retention, short term. Your customer profiles can also be multi-dimensional. I’m not talking about spaceships and Star Wars here; what I mean by multi-dimensional is this. Using the example of the Video Gamers customer profile. One dimension of this customer profile could display the similarity in characteristics of the customers, while another dimension displays the similarity in product / service preference, another displays the similarity in finance spending, while another, similarity in times of purchasing, you get my point now? Correct! (Good in Nigerian pidgin). Taking any of these dimensions of your customer profile, you can come up with customer retention tactics. For example, let me emphasize on finance spending dimension. Pricing is a key factor in customer retention, especially here in Nigeria. You can segment Customer profiles into smaller profiles and make your pricing decisions based on how much the different smaller profiles spend on an average. A great example of this is when purchasing airline tickets online, the prices differ depending on a number of factors, including the type of device used during the purchase – if you didn’t know this happens, well, now you know.  It’s commonly referred to as “Price Discrimination”, I know right, I don’t like the term either but it does the job!

As a Start-up, What’s my business with Customer Profiling?

As a start-up business, I’m assuming, and I’m hoping I’m assuming correctly, that you do not intend to remain a start-up company. Start-ups should not wait till they become SMEs before they begin to profile their customers. As the parable of the ten talents teaches us “if you are faithful with the little, more will be given to you”.

Start-ups usually do not have an existing customer database but are in desperate need of one. I advise start-ups to cultivate a habit of profiling customer. Get to know your customers early enough and plan to see them grow with you. Research on customer profiles from larger enterprises in the same line of business with you and learn their customers’ “love language”.

Customers do not usually have high expectations (use the Kano model) from start-ups and this makes it a lot easier to ‘blow their minds’ with basic customer profiling decision making.maxresdefault

Send them a birthday card, begin to use customer retention tactics like discounting and do not, I repeat, DO NOT flood their e-mails with useless adverts; use customer profiling to achieve great target marketing.

I trust this series of posts on Customer Profiling has given you a great desire to begin to profile your customers. It’s never too late to do so and it’s never too early to do so! Start profiling your customers! The benefits are incredible. Everybody loves to feel known and loved, your customers are no different; Customer Profiling can help you achieve this.

For more advice and tips on today’s post, you can contact us via the contact us page.

You can also contact us regarding questions about any other ICT in Business related problems.

We are Ya’ats Advisory Services and we’re here to bring customer satisfaction your way.


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