What it provides many benefits for both

What if the businesses you frequented remembered your preferences? Would you appreciate it? This lesson will explain customer profiles and how they benefit both the business and the customer, in addition to highlighting some drawbacks.

Customer Profile

Al loves his coffee in the morning and needs a cup before work. He frequents a franchise shop on the corner of his street. Al is surprised when the barista knows his order and has it prepared immediately after he enters. This coffee shop uses customer profiling to keep track of Al’s purchases. This also helps the coffee shop know more about other regular customers like Al.

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A customer profile helps businesses to make important decisions by tracking customer information, such as trends, demographics, and psychological graphics. Just like how the coffee shop tracked Al’s purchase history to prepare for his next visit, businesses everywhere are using customer profiles to better meet the needs of their customers. There are many reasons why a company uses customer profiles.

We’ll first look at the details of a customer profile and then discuss the benefits and drawbacks of customer profiles for both the customer and the company.

Components of Customer Profiles

Now that we know the technical definition of a customer profile, let’s take a look at the components a profile can include. Every company may have different areas they want to focus on when creating customer profiles, but the main areas of a customer profile include understanding more about your customer and understanding their purchases.

The information in a customer profile may include the age, gender, and income of the customer. This will help the company understand their typical customer as well as understand what steps are needed to attract new customers. The customer profile should also include customer preferences in order to understand what the guest likes and dislikes. For example, Al is lactose intolerant and the coffee shop noted this during one of his first visits. This information is valuable so that the coffee shop makes sure to provide Al with beverages that don’t include lactose. Finally, the customer profile should also include customer behaviors.

Al gets his coffee every morning at the same time, which is how the coffee shop was able to be prepared for Al upon his visit.Customer profiles also help with understanding the customer’s purchases. Customers buy a product or service due to a need they have and want fulfilled.

In the example of Al, he wants to have coffee in the morning before work and the coffee shop is able to fulfill that desire. Noting the customer’s purchase history helps to understand the customer and prepare for future customers.

Benefits of Customer Profiles

More companies are using customer profiles and finding that it provides many benefits for both the customer and the company. Like in the case of Al and the coffee shop, the customer profile benefits Al by tracking his history. Al receives great service due to the customer profile and he’s more likely to keep returning because he’s satisfied. Customer profiles also help the company to be prepared for future guests.Another benefit of customer profiles is that the company is able to see their ideal customer.

The information from the profile let’s them know the type of person who uses their product or service. This will help the company target future customers who are similar to their current customers. This way the company isn’t wasting marketing efforts targeting the wrong demographic. The basic idea is that customer profiling will keep current customers happy and bring in new customers, which leads to higher profits.

Drawbacks of Customer Profiles

While there are some benefits of customer profiles, there are also some drawbacks, too.

In order to create customer profiles and use them, it takes time and the training of the team. Companies have to invest the time and energy into creating a policy for customer profiles. It can also cost additional funds to implement customer profiles. If a business is going to use a customer management system to create customer profiles, there will be costs associated with it as well. In addition, some customers prefer to not be profiled and may get upset about being tracked due to privacy concerns.

Lesson Summary

Let’s review.

More companies are keeping track of customer information by using customer profiles. Customer profiles can track information, such as demographics, trends, and psychological graphics. There are many specific things that can tracked, including purchase history, preferences, age, and location. This may help both the customer and the company, though customer profiles can be time consuming and expensive.


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