Should You Be Customer Profiling?

In casual conversation, the word “profiling” often has a  negative connotation, but in marketing, it is a driving force behind success. Building a customer profile
helps you understand your customers’ attitudes, interests and preferences, and tailor your marketing to these and other factors relevant to their buying behavior.

How does it work?

To create targeted campaigns, marketers typically do a basic select by some kind of relevant demographic. A travel agency might select consumers of retirement age, for example, because they tend to have more leisure time. Customer profiles take this a step further, layering on home ownership, median home value and other factors that provide insight into disposable income. It might include whether or not they have purchased a vacation in the past.

How do you develop a profile of your customers? Smaller marketers often have little data to work with, but tools for getting around this are exploding.

1. You can purchase data cuts of increased detail. For a few more dollars per thousand, you can purchase a more refined data select than a single cut. In the earlier example, this might be a list of consumers aged 65 or older who own homes worth at least $150,000 and have purchased at least one vacation in the past 12 months. The trick is to balance the increased cost of the data with the likelihood that it will bring a greater return. This is where testing becomes critical. The more you test, the more you know what brings additional value and what does not.

2. You can append your existing list with additional data. If you have an existing customer list, you can do what is called an “append,” or purchase additional data on those same customers that will create a relevant customer profile. You can do this even if you have nothing but an e-mail list. It’s called a “reverse append.”

3. You can purchase complete customer profiles from list companies like Accudata, Nielsen and Dun & Bradstreet. These companies are increasingly providing packaged solutions aimed at helping small and mid-sized business owners with an overall demographic overview of customers who spend the most money in their markets. These include both standard selects like median household income and business standard industrial classification (SIC), as well as proprietary categories like “wealth scores” and “super niches.”

Customer profiling sounds like a scary word, but even for smaller marketers, it doesn’t have to be. Talk to us about creating a customer profile and taking your targeted and personalized marketing to the next level.