Customer profiling: the complete guide

What is customer profiling?

Customer profiling helps businesses create representations of their ideal customer (customer profiles) and are created by gathering data about the consumers visiting your locations, such as:

• Demographic information
• Psychographic information
• Spending and financial data
• Geosocial information

By customer profiling, businesses can better understand their customers, which can help new opportunities, tailor marketing campaigns, improve customer experience, and reduce the cost of customer acquisition.

How to develop customer profiles

Retailers use many ways of acquiring data to create their customer profiles. These include:  

• Developing or using an existing customer database
• Conducting market research 
• Analyzing industry data and reports 
• Using social media and website analytics 
• Partnering with third-party data vendors

Once the appropriate data is compiled, begin segmenting your target market based on shared characteristics, preferences, or behaviors. Then, create detailed personas that represent each segment. Continuously update and refine your customer profiles as you gather more data and stay in tune with evolving market dynamics.

To build comprehensive customer profiles it is important use your own first-party data alongside extensive demographic, financial, psychographic, and geospatial data points to give you a deep understanding of who your customers are, where they are coming from, and how to acquire more of them.  

Optimizing store placement and concepts

By analyzing their newly acquired customer profiles, retailers can identify areas where there is a high concentration of their target audience. This information can be used to inform decisions about where to open new stores, as well as the layout, size, and design of those stores. 

For example, if a big box retailer’s customer profiles show that a large portion of their target audience is in urban areas, while a smaller audience is in suburban areas who don’t normally make trips into the city. They may choose to focus on opening full size stores in those urban areas while offering smaller store formats in the suburban area. They can also use data on their customers’ income levels and spending habits to determine what types of products to stock in those stores. 

Creating personalized customer experiences

Location-based marketing is a powerful tool for retailers to create personalized experiences for their customers.

When retailers understand their customers’ preferences and behaviors, they can create marketing campaigns that deliver relevant messages through targeted advertising to customers based on their location.

This can include offering special deals or promotions based on the customer’s proximity to a particular store, or sending notifications about products that are relevant to their current location. 

Another way to use customer profiles in location-based marketing is to create personalized in-store experiences. By analyzing customer data, retailers can identify their customers’ preferences and behaviors, such as their favorite products, preferred shopping times, and preferred payment methods. They can then use this information to create personalized in-store experiences, such as offering customized product recommendations, providing tailored promotions based on their previous purchases, or even offering in-store events or classes that align with their interests. 

Leveraging location data to make business decisions

Location data can help businesses make informed decisions about store placement, market segmentation, and targeted marketing campaigns. By analyzing foot traffic data and customer behavior patterns, businesses can identify optimal locations for new stores, or adjust their existing store layouts to improve the customer experience. Location data can also help businesses create targeted marketing campaigns, by identifying the most effective channels and messages to reach specific customer segments. 

However, analyzing and interpreting location data can be complex and time-consuming, which is why businesses may need a trusted partner like Kalibrate to help them along the way.

For decades we have helped businesses leverage location data by providing them with advanced analytics tools and customized solutions that are tailored to their specific needs.

Our location intelligence solutions can help businesses gain insights into customer behavior and preferences, identify opportunities for growth, and make data-driven decisions that lead to larger success.