Chris Taylor
By Chris Taylor on 25 Oct, 2022

Customer profiling is a valuable way of helping organisations understand their customers in greater depth.

Organisations typically have access to transactional and behavioural data, but less knowledge around who those customers are and what they look like.

To plug that gap in knowledge, customer profiling can help build a ‘pen portrait’ to guide creative, messaging, and media planning.

What is customer profiling?

Let’s first start with what we mean when we say ‘customers’. Customers are any form of contact data, whether it’s people who make a purchase, donors, supporters, subscribers, patients, investors, vehicle owners, or any other type of contact - you get the idea.

Customer profiling is the process of matching a contact file to a geo-demographic tool based on postcode to assess a wealth of insights about those households.

At DCX, we do this through Acorn - an industry-leading geo-demographic tool that segments the UK population into various categories and groups, as well as down to more than 60 discrete types.

Analysing and understanding demographic factors and population behaviour provides a detailed understanding of the consumer characteristics of people throughout the UK, including but not limited to:

  • Age
  • Income and disposable income
  • Property insights including value, tenure, type, and ownership status
  • Financial insights, inclusive of risk level, investments, products and services, attitudes
  • Ethical attitudes and behaviours

  • Digital behaviours, inclusive of media choices and consumption
  • Lifestyle choices and interests
  • Ethnicity
  • Charity donation behaviour and priorities
  • Online and offline shopping behaviour, and associated brands
  • Holiday, travel, and vehicle ownership

And many other insights alongside - all designed to add a depth of colour to and knowledge of an individual audience in order to pull out subsets within your overall customer base.

What you need to build a customer profile?

The information required to build a customer profile will depend on what you are trying to achieve.

For example, if you are simply looking for an overarching view on the make-up of your active customer base, a unique customer postcode for each individual would suffice. This would give a read of the types of people who are your customers, and - as importantly - who aren’t.

If you were looking to understand the profile of different types of customers by their value to you, then we would need additional transactional data alongside the individual’s postcode to create specific profiles against those value segments.

The same would be true if you were looking for individual sub-segmented profiles to be undertaken by additional variables – examples could be age, recruitment source, specific product, or service usage, recency, frequency, and monetary value segment. Or perhaps even a point within the customer life cycle for example.

DCX recently carried out profiling project for a dental care brand that required us to distinguish the difference in patient profiles by period, by treatment type, and by specific dental brands.

How we build a customer profile?

Our expert insight team spends time listening to your challenges, understanding the gaps in knowledge on your customers to help recommend the most appropriate customer profile splits that would be most advantageous for you to understand.

Our analysts then map the data you provide against the Acorn tool, generating a report on any given segment. This report shows where any specific dataset sits by each of the distinct Acorn categories, groups and types, showing where the concentration of the individual client file sits.

We also show the level of variance on a demographic make-up of a client data file compared to the UK population as a whole. And we can map the different groups to show their penetration visually.

Then it’s time to bring the insights to life. Our planners use the insights to build out a visual representation of the overall demographics. These are more commonly known as Pen Portraits that bring your audiences to life and use the findings to recommend strategies that make the most of that insight.

The value in profiling and how it can be applied

Gaining a better, up-to-date understanding of your customers helps organisations define and deliver more appropriate and effective targeting strategies across any consumer-facing sector - whether that’s trying to understand the profile of existing customers, identify profitable prospects, grow value, or prevent churn.

Use cases can include:

  • Finding valuable ‘Lookalike’ audiences for acquisition activity, as well as the best channel to target them on
  • Developing propositions and messaging that are more relevant to audience needs, to help maximise customer retention
  • More tailored audience segmentation based on needs and behaviours
  • Identifying what VIPs look like and sizing those ‘on the cusp’ who could be converted
  • Understanding what less active individuals looks like to help churn prevention
  • Understanding consumer channel preferences and possibilities for channel shift
  • Market sizing to assess where your brand sits, who you are attracting, and how much of the market are you gaining
  • Identifying growth opportunities in new territories or for product cross sell and up sell

Examples of where we have used profiling to aid organisations’ decisioning include:

  • Helping a well-known high street retailer to decide where it should establish new store locations / territories by identifying areas with high concentrations of their demographic
  • Helping a charity understand its donor profiles by recruitment area, as well as which affinity partners would be the most appropriate for building a relationship with, whilst increasing awareness of the charity
  • Helping an automotive client with door-drop media planning for its new SUV launch by identifying where the best prospects were located

Keen to know more?

If you think customer profiling could be something your organisation would benefit from, or if you’d just like to hear more about what might be possible, just get in touch.

We’d love to hear from you.

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