The Benefits of Customer Profile Analysis for Business Growth


Last updated on July 3, 2024

For a business to flourish, it has to understand its customers well enough to market effectively to them. One of the best ways to do that is through a customer profile analysis.

Simply put, this process closely examines current and potential customers’ characteristics, traits, and preferences. Analyzing such data helps businesses learn the ins and outs of their target audience—and a company that knows its audience can further its own growth.

Even with such a simple explanation, it’s clear to see how conducting a customer profile analysis can result in business growth. But how exactly does profiling feed into this?

This article will explore five of the most notable impacts of customer profile analysis on your company.


Improves business profitability

Any company that wants to thrive has to keep profitability in mind—and a customer profile analysis is a gateway to boosted profitability.

Think of it this way: as a business, you have to optimize your resources to ensure you sell more products (or services) without increasing spending. Efficiently targeting your intended audience can decrease spending while increasing revenue.

Customer profiles and ERP (enterprise resource planning) systems work together to make this happen, which is why implementing an ERP system is such a good idea. ERPs help you find and access customer information efficiently, so you’re able to use profiles to their full potential.

It’s no surprise, then, that the ERP software market grew by nearly 10% in 2019 as more people realized how helpful this type of tool can be.


Optimizes marketing efforts

Imagine you’re trying to sell a watch to someone. You know which styles, colors, and brands that person likes, and you know how much they’re going to be able to spend on the watch. That information makes it much easier to complete the sale successfully.

On the other hand, trying to sell it to a stranger who might not even like watches will be significantly more difficult.

Customer profile analysis lets you similarly perfect your marketing strategy. As it relies on fully understanding information to market more effectively, customer profile analysis optimizes your marketing and sales efforts.

Customer Profile Analysis - marketing efforts

Boosts customer engagement

When you’re looking to increase customer engagement, one of the best things you can do is ensure everything you’re putting out is exciting and relevant to different types of customers. By analyzing their profiles, you can do just that.

Customer profiles contain details on the type of content your target audience tends to engage with and the platforms they prefer to see it on. This helps you craft posts, ads, videos, and other content they’re more likely to enjoy or find useful.


Enhances customer retention strategies

Customer retention is vital to businesses. In fact, increasing it by just 5% yields a 25-95% profit increase, which shows why it’s important to focus on.

Retaining customers is much easier when you understand their needs and preferences. Why? Because this insight allows you to tailor your retention strategies to observed realities rather than projected estimations. In other words, having precise data is better than guessing or making assumptions.

For example, your customer profile analysis might reveal that customers are frustrated with your shipping options. With this valuable insight, you can focus on improving or adding new options. In turn, this improves customer satisfaction and ensures customers won’t switch to a competitor.


Creates opportunities for business scaling

When you use your enterprise resource planning software to make your customer data available across all your departments, you can create a more cohesive approach to business growth. This makes it easier for your company to scale up effectively.

When the whole company has access to information on what your customers love, you can sustainably gear each department towards improving customer relations. This also makes it easier to create lasting connections with new customers and/or leads.

Customer Profile Analysis - business scaling

It’s clear that conducting a customer profile analysis has numerous benefits. Customers are at the heart of any business, so putting in the time and effort to get to know them will always pay off. Ultimately, this will help support your company and help it grow.

5 Best practices when profiling customers

It’s one thing to understand the benefits of adopting a new process such as customer profiling. However, it’s crucial to know how to implement it effectively.

Study customer buying behavior

A sure way to improve the customer experience is to make sure you’re fully aware of the patterns your customers follow when they want to make a purchase.

They may click on a product once and buy it straight away. More likely, they’ll do research first, compare choices, and then eventually make a purchase in light of the information they’ve gathered.

When you understand the driving factors that lead to this final decision, you can use that knowledge to improve your standing in customers’ minds.

 Identify customer demographic

Who are your marketing campaigns aimed at?

The more you know about your target customer or demographic, the better you can target them. Are you mainly aiming at people of a particular age or gender? Do your customers share preferences or values?

For example, you may want to target consumers who are searching for ethical and sustainable products. If that’s the case, highlight your company’s eco-friendly policies to better appeal to that demographic.

customer profile analysis - customer demographic

Perform customer surveys

It’s always a good idea to learn from what your customers tell you directly—and customer surveys are an excellent avenue for them to talk to you.

As you poll customers, be sure to ask the right questions and avoid open-ended ‘yes’ or ‘no’ questions. For example, you may want to know their opinions on a particular product. In that case, ask questions like ‘How would you rate this product on a scale of 1-10?’.

Research customer interests

You’re always looking to make your brand look more appealing to customers. What better way to do this than understand their likes and dislikes?

A company that only ever says “Our products are great” may sound biased. On the other hand, a business that can explain why their products are relevant to customers’ interests will leave a lasting impression on its customers.

Moreover, when you show your customers how your product makes it more fun to engage with their interests or easier to solve a specific problem for them, selling will become significantly easier.

Map out the customer journey

It can be difficult to understand your customers if you’re unsure about the steps in the customer journey. After all, you can’t put yourself in their shoes without knowing the path those shoes are walking.

That’s why you must understand what their journey typically looks like, from the moment they search for your products or services to after they make a purchase. 

The more information you have, the more you can understand their purchase intent, shopping behavior, and pain points. What’s more, understanding customer journeys helps you shape them.

And remember…

Customer profile analysis is your ticket to a deeper understanding of your customers. Anytime you focus on this analysis, you’re giving your company a chance to learn everything it needs to know to effectively market to your target audience.

This insight helps you learn how to make customers happier, which increases brand loyalty and reduces customer churn.

That’s why customer profile analysis drives business growth—and why it’s always worth performing.

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