XM Knowledge Base
Author: Adam Bunker
Subject Matter Expert: Adam Janes
What is a customer profile?
A customer profile is all the relevant information and data that you’ve captured for a customer, including the key interactions they have had with your brand. This includes both operational data and experiential data, such as:
- Demographic data with basic details such as age, location, job role, income, etc.
- Psychographic data such as values, interests, attitudes, and personality traits
- Purchasing preferences and intent (goals, motivations)
- Pain points
- Buying behavior and purchasing patterns
- Brand contact frequency
- Customer lifetime value
- Which communication channels they prefer to use
Customer profiles are used to identify the customers you have, and to provide an in-depth understanding of who they are, what they want, and how they behave. It helps you to identify and analyze key customer segments based on shared characteristics, enabling more targeted customer experiences.
Rich customer profiles not only help you better target your existing customers, but also give you insights on how to better engage with potential customers, and understand common pain points, and the motivations behind purchases or sign-ups. Creating customer profiles is the basis of a lot of business outreach, whether that’s for marketing strategies or for product development.
Building out customer profiles also enables you to automate actions that can help improve customer experiences at scale. For example, if you have a segment for “high-value customers”, and then receive negative customer feedback from them, you can trigger a workflow to close the loop or send a voucher.
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Customer profile examples
B2B and B2C customer profiles
There are differences between a B2B customer profile and a B2C customer profile, mostly in terms of the information you include. Usually, with a B2B customer profile, you’re trying to understand a business that you’re targeting, rather than an individual.
In B2B account-based marketing, you might use an Ideal Customer Profile (ICP), which actually refers to a company you think would make the best customer for your business. In this type of customer profile, you might also include firmographic information, which could be company size, annual turnover, employee count, and more.
What is an Ideal Customer Profile?
An Ideal Customer Profile (ICP) is a description of a company or customer that you believe to be a perfect fit for the products or services you sell. You might also see this called an Ideal Buyer Profile.
However, sometimes you might create a personal customer profile for someone within that business who you’re aiming to sell to, such as a finance manager. This would follow the more usual customer profile template. Of course, you might be targeting various people within the same company too, but who work in different departments.
The difference between a customer profile and a buyer persona
Though both customer profiles and buyer personas include similar information, a buyer persona is a fictional version of your customer. It’s based on the same data as your customer profile, but it’s a creative imagining of the ideal customer you’d like to target.
Using a buyer persona can be valuable, particularly when creating sales and marketing campaigns designed to reach a target audience. However, a customer profile only includes true data about your customer (i.e. Customer X is a systems analyst making $8k/month in Chicago), whereas a buyer persona also includes fictional details (i.e. Brad is a systems analyst who’d like to start a family with his wife in Chicago, but wonders how to spend his $8k/month salary wisely on baby products).
Why is it important to create customer profiles?
Customers are seeking experiences that feel tailored to them, with their needs met and expectations exceeded. By creating customer profiles, you can provide a more personalized experience that will encourage them to come back for more.
Customers expect a personal approach
In a world full of targeted advertising, customers expect a personalized approach from brands. Accenture discovered that 48% of consumers expected a brand to treat them as special if they were a good customer. Not offering a personal approach is costly; the same study found that 33% of those who had ended a brand relationship had done so because they didn’t feel their experience was personalized to them.
Buyers are happy to share customer feedback for better personalization
Customers are often willing to provide information, such as feedback, preferences and interests, if it means getting a personalized experience, demonstrating just how popular a personalized approach can be. Salesforce found that 79% of customers are content to share data for personalization, with 88% keen to do so if the result is personalized offers.
Personalization leads to better business outcomes
When you personalize your approach to customers with a deeper understanding of who they are, what they want, and how they’re likely to behave, you encourage customer loyalty and satisfaction. Higher satisfaction leads to lower customer churn, meaning better business outcomes for your brand.
We found that 42% of consumers cut their spending after having a bad experience with a brand, leaving on average 9.5% of revenue at risk of being lost. By creating customer profiles, and understanding the journey they’ve taken with you, the issues they’ve encountered, and their expectations, you can make decisions that you know will positively impact their likelihood to stay a customer. That might be in your marketing, or during customer service. Customer profiles are a key part of getting the customer experience right.
How to create a customer profile
There are basic ways to create customer profiles. However, for the most valuable insights and effective customer profiling, you need to go deeper into your data, beyond just demographic information.
Collect thorough customer feedback
Your customer feedback is the most vital data to collect when customer profiling. Who better to tell you about themselves than your existing customers?
Blending direct and indirect sources will help you add context details to specific customer profiles’ basic demographic information. Ideally, you will gather feedback surveys and leverage conversational analytics to capture a comprehensive view of the customer journey and how that made them think and feel. You can also perform market research, such as in-person interviews and focus groups, for insights gained from your customers themselves.
Customer profiles are a picture of their time with you. Sometimes they will tell you how they feel, and what they want and sometimes they will do so indirectly with how they behave (what they do, and don’t do). Having a platform that can collate that information to give you the full picture is essential.
Create rich profiles based on customer experience
Rather than using basic demographic data, it’s far better to enrich customer segments with key insights on customer experience. It’s not only what your current customers are telling you that’s important to include in a customer profile – what they’re not telling you directly also helps you build a complete picture. Pull actionable insights from unstructured data, such as social media posts, reviews, customer support conversations, and more, with tools such as natural language understanding (NLU).
For example, customers might tell you they’re unhappy with a product with a simple review score (three out of five stars, for example), but in an open text chat with your customer service team, they might indicate that there was significant customer effort to use it, and they are frustrated with a particular pain point. You might note, for example, that there has been a high volume of contact with your customer service teams around the same issue when cross-referencing with your operational data.
Natural language understanding in action
Having customer profiles that include all of the information above means that when customer service engages with them or when you initiate sales and marketing campaigns, you’re able to address the customer’s needs more effectively.
Rather than sending them an update on the same product they’ve taken issue with, for example, you might upsell a better product or service that will result in fewer negative interactions and contact.
Equipped with direct feedback from tools such as post-transaction surveys and indirect signals such as chat commentary, online reviews, or social posts, you’re able to create rich, dynamic profiles that help you segment and target more effectively.
Use the right technology for creating a customer profile
Putting together a customer profile that unifies all your customer data, adds context through operational data, and provides you with the necessary analytics is hard without the right tools.
Customer data platforms (CDPs) can be a useful tool in your arsenal to store operational data related to customers but miss all the experiential data that provides a complete understanding of the customer.
Qualtrics Experience iD is more than a repository for customer data – it’s a single, unified system for all experience data, from customer feedback to signals in unstructured data. This allows you to build and act upon a rich customer profile, helping you to define your customer segments and win over your ideal customer with experiences that delight them.
Experience iD alert
Customer profile examples
To help you build out an in-depth customer profile, here is a customer profile example that gives you a good foundation to work with.
Customer profile example
While this screenshot only shows an overview, the real customer profile would include a detailed history of their interactions – including purchases, issues, contact center interactions, subscription status, and their preferences.
With that kind of dynamic customer profile, you can go into more depth when building out each experience.
When to use customer profiles
Whether you’ve used a simple customer profile template or done a deep dive into your customer data to help you create a customer profile, knowing when to use them is important.
In an ideal world, every interaction you have with your customers should be informed by your customer profile. Every interaction with your customer service teams, every transaction, all your sales and marketing campaigns – every step of your customer journey can likely be improved with valuable insights gleaned from a customer profile.
Equipped with these important customer data points and insights, you can add more value to every point of contact with your customer base. Each customer profile is a blueprint for how a customer thinks, and how they’d like to be treated. Armed with this information, your customer profile becomes a great reference for predicting future behavior.
AI and customer profiling
There’s a lot of experience and operational data out there – and much of it is useful in building out robust customer profiles. But AI can go beyond just customer profiling. It can then use that same information to help improve the customer experience.
Here’s how AI can positively affect both customer profiling and day-to-day processes:
Using AI to build customer profiling
Data aggregation and analysis
One of AI’s key strengths is its ability to bring together disparate data sets, analyze them, and provide information based on the kind of scale that humans would take years to sift through. For customer profiling, that means looking at everything from transaction history to social media interactions – and everything in between – to recommend robust and super accurate customer profiles.
Segmentation
With all that information at its disposal, AI-powered experience management tools can ably spot patterns that define different groups of customers, based on meaningful characteristics, behaviors, and preferences. This kind of segmentation is directly data-driven, which means you can create customer profiles without the guesswork.
Natural language processing
A key part of the data collection process is the ability to absorb not just operational, quantitative data, but also the data that comes from conversations. AI with natural language processing capabilities can extract crucial customer profile information from conversations happening in the contact center and on third-party channels like social media networks and review aggregators.
Dynamic customer profile updates
Customer profiles are not static – they’re always changing along with the needs and behaviors of your customers. AI tools can constantly scrape data sources for new information, meaning that any information pertinent to your customer profiles is always up to date.
Using AI to work with customer profiles
Predictive modeling
Customer profiles help you make smarter business decisions by better targeting your offerings towards the people who actually want them. They might not help you become psychic, but AI can get you some of the way there if the tools you use have predictive modeling. Here, your AI software analyzes historical data to build out likely models for future behaviors, which can help with everything from proactive marketing and user interface tweaks to crisis management.
Personalization
It may seem obvious but it’s worth hammering home: when you understand your customer profiles you can better cater to the people behind them – and AI customer management tools can help automatically personalize experiences for customers at scale. That might mean intelligently distributing offers and discounts that will resonate with specific segments, or it might even mean presenting different customer groups with entirely different versions of your website, with bespoke customer journeys designed for each.
Trend detection
AI’s ability to monitor every touchpoint at once, alongside user behavior, makes it perfect for spotting when specific customer groups start acting in ways that go against the grain. This is usually a signifier that something’s wrong and that there’s an experience gap that might lead to churn. AI will alert you to any unusual behavior in your customer profile groups before any humans are likely to have noticed.
Using AI to summarise data, highlight anomalies, surface unknown insights, and recommend personas, is helping organisations to realise the full value of their data. And reducing the effort spent to mine data means organisations are spending more time on adding value through developing personalisation strategies.
– Adam Janes, Senior XM Scientist, Qualtrics
Create the ultimate customer profiles with Qualtrics
Qualtrics XM allows you to pull all relevant customer and operational information into one centralized location within a connected, intelligent system. Your customer profile data, as well as experience data, is collated with every single signal from every channel to give you a customer profile like no other.
Best of all, you can apply powerful analytics to apply your customer profile knowledge to every interaction, offering the best customer experience possible to your customer base, current and future.
An important concept that might be good to weave in somewhere is that targeted customer experiences can be at the individual customer level, or targeting an entire segment of customers.
Free eBook: Understanding AI - your real-world CX playbook