As any business owner knows, understanding your customers will play a crucial role in your company’s success. After all, if you don’t know key information such as what they are looking for from your company, it will be much harder to give them what they want – and they’ll be more likely to look elsewhere for their goods and services.
Having a good understanding of your customers can also teach you things such as who your business is reaching, giving you vital information to analyse so you can determine the success of your business plan. This is one of the reasons customer profiling is so important.
What is customer profiling?
Customer profiling refers to the practice of working out who your customers are. This generally includes important demographic information, such as their gender, profession, age, and level of educational attainment. By building up a picture of your customers’ demographics, you can identify the groups who are more likely to use your company.
You can also profile information such as what they have bought from your business, the length of their relationship with your business, how regularly they buy from you and how much revenue they contribute. This can be important for businesses who are looking to find out who their most profitable and loyal customers are – this data can be particularly useful when it comes to creating targeted marketing campaigns, for example.
CRM – the benefits of tailored marketing
CRM software is something that can help businesses looking to profile their customers. Let us take targeted marketing as an example. First of all, why is targeted marketing important? Essentially, it is because if you are taking the time to create a campaign, you will naturally want to get the best ROI you possibly can. If you were to just send out a general campaign to your entire contact list, this might not be very productive as most of the people you sent it to would be unlikely to be interested.
By contrast, if you have a good customer profile for a particular type of product or service that you have generated using demographic and purchase information, you will be able to create a campaign aimed at that group of customers. There’s no guarantee they’ll take up your offer, but you at least will know that they are likely to be interested in what you’re sending them.
This is where your CRM systems can help you.
Considering your profiling strategy
In order to get the most out of your CRM systems, though, you need a profiling strategy so that you can start to develop high quality marketing campaigns. There are several things you might like to think about here.
For instance, who are your most profitable customers? Who are your most frequent customers? These two groups might not be the same but they can be equally important when you are deciding where to aim your marketing.
Also, what products or services are you trying to sell? It can sometimes be quite time consuming building accurate consumer profiles, particularly if you are utilising multiple variables, so it can help to have an idea of your aims before you get started.
Once you have started to build your profiles, you might also want to look at your marketing history with the customers in question. Have you sent them marketing material before? Do you know how they responded to it?
Some of these questions can be hard to answer, but most good CRM software comes with report and analysis functions that can help you come to useful conclusions.
Implementation
Once you have built your customer profiles, it’s time to start implementing your strategy. As well as targeted marketing, you might want to think about the other aspects of your business that will be affected by the process. For example, this could include your sales team, finance staff and front line customer services.
All of these employees could have a role in dealing with your targeted customers, so it is important that you have an integrated strategy in place so that they can all access the information they need and be able to provide a comprehensive, useful service to your targeted profiles. Particularly if your company is large or has lots of departments, you might benefit from something like ERP software to help integrate your CRM systems with the rest of the business.
