A Step-by-Step Guide to Defining and Understanding the Profile of Your Ideal Customer

cioreviewindia Team | Tuesday, 08 June 2021, 12:48 IST

A Step-by-Step Guide to Defining and Understanding the Profile of Your Ideal CustomerIf you want to find out how to market and sell your products better, you need to start understanding your customers and their unique needs. The most effective way to do that is by creating a customer profile and learning how to understand this profile.

The profile of a customer comprises as much detail as possible about your core audience and what they are looking for in your products or services, including demographics, buying patterns,and psychographics.Once you find out all these details, you will be able to understand what people need from your product or service and how to improve your business to meet those needs.

Below, we will take a closer look at what customer profiling means, how to do it, and how you can derive value from your findings.

What exactly is a customer profile, and why do you need it?

Customer profiling is often confused with a buyer persona. The two are similar, indeed, but the main difference is that your buyer persona is your fictional, idealized customer – the person you want to be buying your products – whereas customer profiling is based on actual data and englobes the core details of your real customers.

This single description contains everything you need to know about the people who are buying your products in real life, and,as a result, a customer profile is done first, followed by the creation of a buyer persona that is going to be derived from it.

It's critical to have a clear definition of this customer profile in place when starting a company, designing a market strategy, or providing your sales staff with guidance. Otherwise, you risk spreading your product offering too thin and harming company value.

Understanding customer profiling segmentation

In order to build a complex and accurate customer profile, which is going to help your company in numerous ways, you need to start segmenting your customers. This will help you understand how a specific spectrum of customers views, understands and is satisfied by your products.

Customer profile segmentation can be done in a bunch of different ways:

  • Demographics: consumer demographics represent the factual characteristics of your customer base and can be used to get a broad understanding of consumer behavior. Demographics include details such as age, sex, occupation, family status, income level and education level.
  • Psychographics: these traits are linked to the attitude and needs of customers. You should include information such as lifestyle, habits, interests, values, pain points, and goals.
  • Behavioralattributes: to understand how the abovementioned psychographics translate into the actions of your customers, you need to define some behavioral attributes. These include customer engagement, readiness to buy, satisfaction, loyalty to your brand, and product usage.
  • Geographicalattributes: if the location of your customers may affect the way they engage with your brand, you may want to include geographical attributes to your customer profile. As expected, this includes country, city, region, area, or any geographical factor out here.

1. Focus on what your business is doing for your customers

If you have just started your business, you need to determine the type of problem your products and services are trying to solve and identify the people that are facing this problem. These will be your primary customer base.

If you already have a customer base, you can skip that part and go straight to understanding consumer behavior. No matter the size of your customer base, they are all unified by a common aspect: the need for your product. The purpose of this first step isto find out if consumers understand your products if they use them, and how they use them.

2. Define customer demographics and contextual information

When you start profiling your audience, it's best to begin with external demographics before moving on to more complex factors such as needs and wants. With a bit of investigation, you will be able to find the right tools for audience profiling and gather the data you need.

There are many aspects that can be included in the demographics section, such as:

  • The market(s) your product services best
  • The age of your customers
  • Their annual revenue
  • Whether they are family-oriented or not
  • Educational level
  • Employee number and company location, if you are conducting B2B operations

After you got their demographics figured out, it is time to continue with contextual details. This should help you get a better perspective on who your customers are on a more personal level and what you can do to improve their lives. This is what you should aim to find out:

  • Your customers' biggest challenges
  • Their short-term goals
  • Their long-term goals
  • How they assess issues
  • The main problem they are trying to solve now
  • How they plan on solving this problem
  • What can you do to aid?

3. Get to know and understand your industry

This is also contextual information, but it is so important that we felt it needed to be discussed more in-depth. If you want to know where you stand in the current market, you need to learn to understand the industry and your competitors. You should be aware of how your clients perceive your brand, as well as who are the other businessesvying for their attention and what do consumers think of them.

Understanding your sector also aids in the development of your brand identity. On the one hand, you want to discover a strategy to differentiate your goods and services if you want to stand out, but on the other hand, you also don't want to advertise anything that will prompt your customers to react negatively. If you know how your customers react to certain business efforts, you will be able to deploy successful strategies that will attract new potential customers.

4. Collect as much feedback as you can

It's easy to depend solely on the information provided by your team when profiling your audience. However, if you don't spend time with your customers, it's difficult to truly get to know and understand them.

Do you know how you can do that? By requesting honest feedback from those that buy your services or products. Customer feedback tells you exactly how customers interact with your products, what they like and what they don't like. Analyze all feedback you get and try to spot the patterns – what are the things people like about your brand, where you should improve, what makes them loyal, and what you can do to stay ahead of your competitors.