Understanding your customers is the secret of successful selling
Today’s marketplace is extremely competitive with businesses competing for market share, customer acquisition and customer retention. In order to gain this advantage, to find more customers and to increase customer loyalty, businesses need to target the right prospects with the right offering at the right time. And existing customers are important sources of information. The more you know about them, the easier it can be to increase their spending. You can use the information you gather to help you find new customers. Like never before we talk about improving the customer experience as the primary concern for businesses. But, to improve customer experience, knowing the customers is crucial.
How can businesses understand who might be most interested in their product or services? When consumers are ready to purchase and how to provide a service that makes the customer feel valued and engaged? Customer profiling is the key to gaining a competitive advantage and, if undertaken correctly, can help address all of the above criteria to increase sales and gain market share.
Use profiling to find and keep your customers
Customer or user profiling looks at customer’s characteristics including demographic (age, gender, life stage, etc.), geographic (location), as well past buying behaviour to understand who they are, and what motivates them. Profiling your customers in essence refers to identifying the characteristics that are needed to target sales and marketing campaigns. It helps you to understand what the ideal customer is looking for, what matters to them most and how best to speak to them. Customer profiling describes consumers based on different categories so they can be grouped for marketing and advertising purposes.
A well-prepared customer profile can come handy in various situations. It provides much needed structure to a marketing plan and is used for preparing an effective marketing strategy to attract and keep the right customers for your business. By targeting advertising to a specific market segment, companies and marketers can find more success in selling a particular product and increase profits. Consumer profiles allow you to define and describe these market segments. Without customer profiling, you might end up preparing a marketing plan which is not focused on a particular group of customers. There are chances that your marketing plans are either targeted to the wrong group of customers, or are targeted to a large customer segment. In both scenarios, you will end up wasting your marketing efforts, and your money. Your return on investment will be low.
No matter how targeted your product, there will be some variations in your ideal customers. For example:
– Your customers might all be the same age but live in different geographic regions.
– You offer products at different price points to allow you to reach customers at different income levels.
– You offer one product that can appeal to customers with different interests.
– Some of your customers watch network TV, while others are more likely to see advertising on social media.
Creating multiple consumer profiles allows you to segment your customers based on these differences. You can then use this market segmentation to create marketing communication that is more successful with different groups of customers. By gathering the correct data you can group together customer profiles based on similarities. It allows you to properly segment your target market, enabling you to communicate with the types of users who have the same interests or characteristics. By segmenting your users based on their profiles, it makes communication feel personalised but on a big scale. That’s how you get deeper customer interaction.
Customer profiling advantages
Profiling enables you to understand your customers, who they are by age, gender, life stage, location, interests, lifestyle, income, hobbies, educational attainment, occupation, voting behaviour, personality, opinion, and also past buying behaviour and purchasing preferences. You can understand who they are and what motivates them. Similar types of customers, those with shared traits, goals and motivations can then be grouped and targeted based on who they are and what they are interested in. With profiling you get an opportunity to know your web visitors’ and customers’ interests before they tell you what they want.
Think of a conversation with a long-time friend versus someone you have just met. It’s so much easier with a long-time friend, right? You have a relationship with them, you know what interests them and what makes them tick. It’s the same when you use profiling. By creating a user profile you can contact the user based on what they like, when they like it and how the user likes the best. It’s about the relevancy and ability to tailor communications based on customer’s specific interests which will enhance experience, engagement and ultimately sales.
Increasing response rates
The customer profile helps businesses in communicating with the right people at the right time. It drives better results from campaigns and sales. This insight also initiates a nurturing process to lead the potential prospects through the buying process. These are multi-layered benefits of customer profiling when it comes to boosting response rates.
Better customer experience
If you know your customers you can make them feel recognised and valued, increase the customer experience and therefore loyalty. By profiling customers, it is possible to guarantee them a pleasant and consistent customer experience. Improving the customer’s experience will lead to more efficient and effective marketing which, besides getting more loyal customers, leads to greater ROI. And who doesn`t want that?
Better customer acquisition
A customer profiling helps you understand your best customers, and this, in turn, can help you to look for prospects with the same characteristics. These prospects can turn out to be potential customers. Such customers will always have a higher propensity to be interested in your service and potentially purchase. Understanding who your most profitable customers are enables you to focus resources where it matters. Do a small percentage of your customers provide a higher proportion of your profit margin? Attracting more users is so much easier when you have insight on your current users. Profiling enables you to build a target list of potential customers or users who are more likely to be attracted to your product or service. There is no point reaching out to users that are not going to be attracted to what you offer.
Improve market penetration
When a customer profile is analyzed well, a lot of potential opportunities can be available to you. This can help you understand what is the percentage of the target market you are talking to and what is the market penetration level of your business. This is one of the most important benefits of customer profiling as it opens up the door for future growth and stability.
In the long term, it is a lot more cost effective to maintain a customer than it is to try and gain another one. On top of that, by planning ahead and using a marketing platform that allows dynamic profiling that automatically updates user profiles, you can save yourself time and money, getting a much higher return.
Maintaining strong relationships with users will help stop them being swayed by the competitive offers. By understanding their profile and what really matters to them (i.e. price, service, contact, etc.) you can keep them on your side.
Let’s be honest, nobody likes spam. However, customers are happy to receive brand marketing that helps or is applicable to them. Sending brand marketing that is applicable to the customer`s needs builds the customer’s trust in the brand. The customer will trust that any marketing contact will be specifically for them, making them feel valued. Having customers that feel valued means that they will hang around that little bit longer and engage with the content that you send them. This is always a good thing.
The benefits of profiling are difficult to ignore. Customer profiling is a powerful tool for marketers, providing the insight and knowledge to improve strategy and decisions. In a customer centric age, to overlook the value of customer intelligence or to base decisions on gut feel alone could be a costly mistake.