Acceptable Profiling: Knowing Your Customer is Key to Marketing

Marketing can be very complex, but knowing where to start can help. I believe that marketing starts with the people who are willing to spend money on your wares – your customers. Knowing your customers, segmenting your marketing or profiling customers boils down to two questions. Why are customers buying this product or service and why are they buying it from you?

Market segmentation is the process of dividing the entire market into smaller groups of potential customers that have similar demographic, psychographic, and/or product usage characteristics. Age, income, gender, education, and marital status are all demographics and help characterize markets. Psychographics are subjective, human behavior traits that are identified as being shared by the segment. Market segments can be conservatives, liberals, leaders, followers, or any other characteristic that is shared by the group and influences their purchasing decisions.

By identifying key trends and commonalities of your customers, you can fairly accurately predict customer reaction to your overall marketing strategies. Profiling gives you the all-important “why” factor. Why do customers buy certain products or services? Why do they choose to buy from you rather than your competition? Knowing these answers allows you to add dimension to your customer profile.

You may sell one product, but different market segments will buy it for different reasons.  Simply put, different benefits appeal to different customers. For example, a TV dinner is a TV dinner is a TV dinner. However, convenience is not saving money, weight-loss or better nutrition. Yet, Hungry Man, Budget Gourmet, Lean Cuisine, and Healthy Choice have segmented a market of frozen meal buyers into unique benefits that appeal to a specific customer.

Profiling your customers allows you to link the market with the benefit. This type of market research can be more formal with surveys, focus groups, purchased demographics, summaries, and more. These tools can assist market segmentation efforts, especially if you have neither the time nor the inclination to take on this project on your own. Or if what you have is more time than money, research is available through trade associations, or you can ask current and potential customers for their input. 

With a little work and time, you can get to know your customers and their buying habits and characteristics. This knowledge should guide every marketing decision you make.  

The bottom line is this: Knowing who your customers are makes for better business.  Your marketing dollars will yield a larger return on investment if you can better predict customer reactions to your marketing efforts. With successful customer profiling, you can. 

Christina Trombley is director of the Small Business Development Center at UW-Green Bay.