Your competitors are lurking behind every corner. They are waiting for you to commit a costly blunder that gives them an opportunity to make an appeal to your customers. Meanwhile, businesses in every industry (including your own) are tasked with a higher level of accountability than ever. It is no longer enough to operate your company based on intuition alone. If you want to gain a competitive edge in your space, you need to take a quantitative approach that leverages market data. One of your first steps should be to develop accurate customer profiles.

Below, we'll discuss profiling in the context of market segmentation. I'll explain a few advantages to profiling your base as well as key data that you should focus upon.

What Is Market Segmentation?

Market segmentation is a strategy that businesses use to identify who is buying their products. It can be done broadly to segment markets based on age group, gender, and income. Segmentation can also categorize buyers based on their locality, ethnicity, and even their belief systems. Many organizations will segment their audience further. They'll consider the websites they visit, complementary products they have purchased, and social networking communities to which they belong.

You'll notice that market segmentation does not mean building an individual model for each person who purchases an item. Instead, it involves categorizing your audience according to demographic and psychographic trends.

Key Benefits To Profiling Your Base

Profiling gives you a glimpse into the characteristics of those who purchase certain products from your company. Unfortunately, many business owners underestimate the value of this information and fail to appreciate how to leverage it.

Understanding the type of person who is likely to buy a specific item will help you target new markets with future media buys. That includes identifying high-traffic websites on which to advertise. Customer profiles will help you refine your online advertising campaigns both in scope and direction. They can also provide important clues with regard to new products your base would be willing to purchase - and the price structure they would be willing to absorb. The effectiveness of your profiles will depend heavily upon the data used to build them.

Important Data Points To Uncover

Your customer (and lead) profiles will develop over time as the result of data you collect through satisfaction and market research surveys. Your industry, sales cycle, and whether you are selling to businesses or consumers will partly determine the type of information you should collect. Some data points have universal value.

If you're selling to businesses, you should identify the industry in which the company competes, the organization's size, and the position of your contact (i.e. survey respondent). For a consumer market, gender, location, income, and age are often important. Education level and marital status may also hold value for certain product classes.

Using Your Customer Profiles To Grow Your Business

It's important to emphasize that customer profiles provide clues - often, strong ones - regarding your audience and the likelihood of their response to your marketing efforts. But, they are only clues; the decisions you make based upon them are extrapolations. That is, they imply who is likely to buy certain items at various price points, but they are fallible. The key to using your customer profiles is to blend them with other data. For example, blending demographic and psychographic data with each segment's purchase history (volume, data, amount, etc.) further hones the usefulness of your profiles.

Surveying your customers on a regular basis helps you to segment them according to purchase trends. That data can be harnessed for your media buys, promotions, and other efforts to grow your business.