Customer profiles: definition and best practices to build them

Knowing what makes their customers truly tick is something every business wants, but few manage. And capturing what the customer preferences that separate those few from the pack can feel like trying to solve a Rubix cube with too many colors and not enough sides.

At its core, customer profiling helps you create detailed portraits of your target audience, synthesizing data from various sources. This allows you to better understand their behaviors and needs, which enables you to tailor your marketing efforts more effectively. But not all customer profiles are created equal. A comprehensive customer profile is a strategic compass that helps guide your decision-making.

In this piece we’ll look at how to build an effective customer profile. We’ll look at how to overcome common challenges so you can enjoy the benefits that come from understanding your customers inside and out.

What you’ll learn:

• What is a customer profile?
• What is a unified customer profile?
• How to create an effective customer profile?
• What are the key components of a customer profile?
• What are some examples of a successful customer profile?
• What are the challenges and benefits of customer profiling

A customer profile is a document that is housed in your marketing tech. It represents an individual or group of individuals who comprise your target audience. It includes the details of demographic, psychographic, and behavioral information gathered through data collection and analysis. Think of the customer profile as a comprehensive snapshot that can give you insights into your customers' preferences, needs, and behaviors. This data is typically sourced from website interactions, purchase history, social media engagement, and customer surveys.

When what you have is an accurate customer profile, you are that much closer to tailoring your marketing strategies, products, and services to better meet the specific needs of your audience. This leads to customer satisfaction, increased engagement, and ultimately, improved business performance. Having well-defined customer profiles makes it easier to create personalized marketing campaigns, which work to strengthen your relationships with your customers. When our customers feel understood and valued by our brand, they’re more likely to become brand enthusiasts, and stay with us for the long haul.

A unified customer profile is when the data we obtain from different sources and channels and centralized them into a single, cohesive view. In today’s digital marketplace, we are often faced with managing dozens or even hundreds of disparate data streams, including data from online interactions, purchases, social media, customer support, and more. These streams may come from different systems, platforms, or departments within the organization, resulting in siloed data and fragmented insights. This fragmentation makes it hard to get a holistic view of the customer. It also creates inconsistencies in data quality and formats, and increases the likelihood of creating duplicate or inaccurate customer profiles.

Consider a retail company that gathers data from its e-commerce website, mobile app, in-store transactions, and social media interactions. Each of these channels may collect different pieces of information about the same customer, such as their name, email address, purchase history, and product preferences. Without a unified approach to data management, the company may end up with multiple profiles for the same customer across these different channels, leading to redundancy, confusion, and missed opportunities for personalized marketing or customer service.

By consolidating information from multiple sources, you create a comprehensive understanding of each customer. This unified approach enables more accurate, consistent, and actionable insights. As a result, you can begin to deliver personalized experiences and targeted marketing campaigns.

The easiest way to establish a unified customer profile is to adopt a Customer Data Platform (CDP), which is a software platform that helps to centralize customer data from multiple sources into a single customer database. A CDP is unlike traditional data management systems. It’s built specifically with marketers in mind. It collects, integrates, and organizes data from various channels and touchpoints, such as websites, mobile apps, email campaigns, CRM systems, and more.

Some CDPs even offer functionalities for data collection, data cleansing, identity resolution, and segmentation, allowing you to create detailed and accurate customer profiles. They often include capabilities for analytics, reporting, and activation. A good CDP helps you use customer insights to optimize your marketing strategies and improve the customer journey.

You have your CDP. Now what? To get started, you must gather and consolidate relevant data points. This will help paint a comprehensive picture of your target audience. Include demographic information such as age, gender, location, and income level, as well as psychographic details like interests, preferences, values, and lifestyle. Behavioral data such as purchase history, browsing habits, and engagement with marketing campaigns is also crucial. Incorporating contextual information such as the customer's stage in the buyer's journey, their pain points, and motivations are key.

Next, identify your target markets and characteristics through market research and segmentation analysis. Work to understand the data you’ve gathered about your customers’ demographics, psychographics, and socio-economic factors.

Analyzing your customer journeys will help you figure out the different touchpoints and interactions they've had with your brand. This involves mapping stages – everything from awareness to purchase and beyond – to identify exact moments of the decision to browse or buy.

Incorporate behavioral data such as browsing history, purchase patterns, and interaction with marketing campaigns to gain insights into customers' preferences, interests, and motivations. By combining these elements, you’re on your way to developing detailed customer profiles that will enable tailored marketing efforts, improved customer experiences, and business growth.

The big picture information you want to have are age, gender, location, and income. Details like interests, hobbies, and lifestyle choices are important, too. A customer’s purchase history, browsing habits, and engagement with marketing campaigns can likewise show you how customers interact with your brand.

Let’s break down the relevant components in a bit more detail.

• Data collection and harmonization: The process of organizing and integrating the customer data you’ve collected is crucial. That’s because it provides a foundation for building accurate customer profiles - you don’t want any profile duplicates or inconsistencies. Example: A company collects data on customer purchases from both its online store and physical retail locations. By harmonizing this data, they can create a complete view of each customer's buying behavior, regardless of the channel they use.
• Customer preferences and behavior: Making data analysis a priority helps you uncover patterns and trends. How do your customers engage with certain products or services? How do they browse the internet or interact with marketing campaigns? Do they respond to your personalized recommendations for them? By incorporating this information into customer profiles, your businesses can anticipate and meet your customer needs. Example: An e-commerce company may notice that a segment of its customers frequently purchases running shoes and activewear. By recognizing this preference, they can tailor their marketing campaigns to promote relevant products and discounts, increasing the likelihood of conversion.
• Segmentation: Segmentation is when you divide customers into distinct groups based on shared attributes. This allows you to target customers with tailored offers. By combining demographic, psychographic, and behavioral data, you can create more precise messages that resonate with specific audiences. Example: A subscription-based meal kit service might segment its customers based on dietary preferences, such as vegetarian, gluten-free, or paleo.
• Personalization: Personalization takes segmentation a step further. With your segmentation data in hand, you can deliver targeted content and product recommendations at the individual level – including the times that are relevant for each person. We’ve all been hit with this via our streaming services. They analyze our viewing habits and make personal recommendations for movies and TV shows they think we’ll like. When they get our tastes right, it keeps us engaged and coming back for more.

All of these elements enhance the effectiveness of marketing efforts and improve the overall customer experience. And I’ll tell you why they should be used in combination with each other, not as disparate strategies. I feel like a special customer when my favorite retailer uses my data to personalize messages based products I love. And when they send me an exclusive offer based on what I’ve purchased in the past, I am more likely to use that offer. I appreciate that they’ve taken the time to understand that I prefer to receive an email in the morning – not a text! I love that they know I love a particular brand of jeans, and that I’m interested in seeing the latest collection. I also love that they know I don’t care for surveys or phone calls. Their savvy, targeted approach worked to create a stronger connection, establishing my loyalty and, ultimately, driving revenue growth.

The differences and commonalities between B2B and B2C profiles are worth examining, as they are both so nuanced.

In B2B marketing, the focus is often on targeting accounts rather than individual consumers, with an emphasis on building long-term relationships and addressing the needs of multiple stakeholders within an organization. Contrast that with B2C marketing, which is more concerned with targeting individual consumers, often leveraging emotional appeals and quick purchasing decisions.

Let’s find out what effective targeting, engagement, and personalized experiences for businesses and individual consumers look like in some fictional profiles.

Consider this fictional B2B example:

TechSolutions Inc. is a mid-size enterprise in the information technology industry located in the United States. Their annual revenue is between $10 - $50 million, and their key decision-makers are their Chief Technology Officer (CTO), Chief Information Officer (CIO), and IT Managers. Their primary pain points include their need for scalable IT solutions, cybersecurity concerns, efficiency in operations, and cost-effectiveness. For communication, they use email, phone calls, industry conferences, and professional networking platforms. Their buying cycle is typically longer due to complex decision-making processes. Employees are tech-savvy, data-driven, and focused on innovation and efficiency.

Understanding TechSolutions Inc.’s industry, size, revenue, and key decision-makers is key for tailoring marketing messages and sales pitches. Identifying their pain points allows vendors to position their solutions as addressing specific business needs. The preferred communication channels help in reaching out effectively, while the knowledge of the buying cycle informs the timing and approach of sales efforts.

Now, let's look at an example of a B2C customer profile:

Sarah Johnson is a 32-year-old marketing manager with a salary of $80,000 a year. She lives in an urban area and is married with two young children. We know she enjoys fitness, healthy cooking, fashion, and travel. Her favorite brands are Lululemon, HelloFresh, Nordstrom, and Airbnb. For communication, she prefers Instagram, email newsletters, and online reviews. Her buying behavior shows us that she prefers convenience and quality, and values products and services that align with her lifestyle.

Understanding Sarah's profile enables brands to tailor marketing messages and product offerings to resonate with her preferences. Knowledge of her preferred brands and communication channels enables targeted advertising and engagement efforts. Understanding her buying behavior and key attributes helps in providing personalized recommendations and experiences, fostering brand loyalty and repeat purchases.

While B2B profiles focus on company attributes, decision-making processes, and pain points, B2C profiles center around individual demographics, interests, and buying behavior.

B2B profiles often involve multiple stakeholders and longer buying cycles, whereas B2C profiles typically target individual consumers with shorter decision-making timelines.

B2B communication channels may include professional networking platforms and industry conferences, while B2C channels often include social media and online reviews.

Both B2B and B2C profiles require a deep understanding of customer needs, preferences, and behaviors. With both, personalization is crucial. Reaching and engaging the target audience, regardless of whether it's a business or individual consumer, requires targeted marketing efforts.