Customer Profiling

Customer profiling helps organizations identify and then effectively target the most lucrative customer segments including how to best reach them in the shopping process and what brand messages are likely to work best with them.

We help organizations profile their customers in actionable ways. First, we measure brand purchase intent. We then discover the values, attitudes, aspirations, behaviors and demographics that have the highest correlation with high purchase intent for their brand. This helps us identify different customer segments for targeting, including the most promising segments. For more information on customer segmentation, go here or here.

Specifically, we measure the following:

• Brand purchase intent
• Customer demographics:
• Age
• Gender
• Marital status
• Employment status
• Occupation
• Presence of children
• Household income
• Shopping behaviors:
• Where information is gathered
• Influencers
• Distribution channels and stores shopped
• Purchase frequency
• Average amount spent
• Importance of quality
• Importance of design
• Importance of customer service
• Importance of price and price discounts
• Values, attitudes and aspirations
• Lifestyle/activities (3-6 statements)
• Shopping (3-6 statements)
• Self-perception and personal style (3-6 statements)

We can also include product usage questions, depending on how many categories the brand represents. And we can correlate values, attitudes, aspirations, behaviors and demographics with brand preference and brand loyalty (including Net Promoter Score) as well.

If you do not have an actionable profile of your customer, you should consider doing this work. It makes your marketing spend much more effective and efficient. 

Branding and Scarce Commodities

In today's world, time and money are often the scarcest commodities. People try to save time or money or both. Many people do not have enough of either. Others earn and have a lot of money but find time to be what they most lack in their lives. While others may have all of the time in the world but little money. How does this relate to brands and marketing? One must realize that people behave differently depending on what commodity is scarce in their lives.

I have written before about the four generic customer segments - convenience-driven consumers, price-driven consumers, brand loyal consumers and category enthusiasts. Often people are loyal to brands because they know their quality level and can count on them. Always choosing the same brand saves lots of time and effort. So, in a way, this is an approach that values time. Convenience-driven consumers shop for items that they need wherever they can find them regardless of price. While price-driven consumers will typically hunt for the lowest prices and will go out of their way to pay less. Category enthusiasts are less sensitive to time or money because they highly value the category itself and enjoy the time they devote to shopping for new products and brands in the category. However, depending on what is scarce in their lives, category enthusiasts can display some of the behaviors of convenience-driven, and especially price-driven consumers too. 

When you create your brand and establish its pricing and distribution strategies, you should be cognizant of what is scarce in its customer's lives.

Brands and Customer Segmentation

Marketers segment their markets so that they can better target the customer groups that offer the greatest sales potential. This also helps them refine brand messages for each group. Markets can be segmented on product usage, purchase behavior, benefits, price, life stage, cohort group, psychographics, geographics or geodemographics. In many product categories, there are price sensitive, convenience driven, brand loyal and category enthusiast groups. 

One way to segment markets is based on specific attitudes, values, beliefs, lifestyles and self-perceptions. The market researcher uses qualitative research to uncover hypothesized attitudes, values, beliefs, lifestyles and self-perceptions associated with heavy or loyal brand or product usage. These attitudes, values, beliefs, lifestyles and self-perceptions are translated into statements that can be tested against product/brand usage in a quantitative brand segmentation study. Once these statements are validated, they can be used in all subsequent research.

We have worked with many clients to help them determine their most lucrative segments based on attitude, value, belief, lifestyle or self-perception statements. Here are some of the statements that we have found identify different customer segments:

• I am a fun mom
• A good education is critical to my child's success
• One person can make a difference in the world
• I love to entertain in my outdoor space
• The world is changing so fast that it is hard to keep up
• Our country needs a strong leader who can take control of things
• Climate change is one of the world's most pressing problems
• I don't worry too much about anything
• I am always one of the most stylish people in the room
• Ending the cycle of poverty starts with children
• A good Christian always seeks to help those who are less fortunate
• It's ok to indulge once in awhile
• I love to drive
• I love to shop

I wish you great success in finding and appealing to your most promising customers. 

For more information on market segmentation, refer to the "Understanding the Consumer" chapter in Brand Aid, second edition.

Customer Segmentation

It is important to know who your most loyal and profitable customers are. Ultimately, you will want to identify prospective customers who are likely to have the most positive impact on your business and you will want to maximize the lifetime value of each of your customers.

Key in understanding this is to correlate customer revenues, profits and longevity with other factors that will help you identify and target your brand’s most advantageous customers. Those factors include demographics (age, income, gender, relationship status, presence of children in the household, etc.), beliefs, attitudes, values and lifestyle, and for B2B customers, job function or title. Product usage and customer benefits may also be factors. Depending on the category, there are several other dimensions on which you may want to segment customers.

The trick is to identify those factors that correlate with increased purchase rates or amounts or greater loyalty over longer periods of time. It is important to spend time thinking through what those factors are for your brand and its category. For instance, the beliefs, attitudes and values to be tested vary significantly across categories.

All of this can be designed into quantitative research studies of current and former customers.

I wish you great success with your customer segmentation efforts.