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What is Customer Profiling? A 5 Step Beginner’s Guide
From The Buxton Co

One of the most important parts of any business is understanding who your customer is, and one of the best ways to gain this understanding is through customer profiles. The purpose of customer profiles is to help make customer‑focused decisions without confusing the scope of the project, whether it’s launching a new marketing campaign or choosing a new store location, with personal opinion. In this blog, we will discuss how to create these valuable profiles.

Before diving into the steps you should take in creating customer profiles, let’s take a step back and first define what a customer profile is and the types of profiles that are available.

What Is a Customer Profile?
A customer profile is a detailed description of your ideal customer, helping businesses identify their target audience and enhance the customer experience. It combines three core components: demographics (age, location, etc.), psychographics (interests, values), and behavior (buying patterns, brand interactions). By understanding these traits, businesses can pinpoint who their best customers are.

How do these profile insights differ from those gained through personas, cohorts, and segmentation? In actuality, profiling, persona and cohort development, and segmentation all share the same end goal: provide unique insights into consumer behavior. The final output between them may vary depending on the data and methodology used, but the use cases for each are the same.

Types of Customer Profiles
Customer profiles can be segmented in various ways, each offering distinct insights into consumer behavior.

• Demographic profiles focus on factors like age, gender, and income.
• Psychographic profiles explore values, lifestyle, and interests.
• Behavioral profiles track purchase history and brand engagement.
• Geographic profiles analyze location or region‑based trends.

All of these types of segmentation can be combined to create comprehensive customer profiles that can help brands better understand their customers’ characteristics, affinities and lifestyles, and more.

How to Create a Customer Profile on Your Own
There’s a lot of ways to create a customer profile. If you are just getting started and need a simple, DIY approach that doesn’t involve a lot of additional technology, here’s a quick 5 step beginner’s guide of steps to follow when creating your own customer profiles:

1. Understand your products, services, and the way they’re actually being used.
The first step in creating an accurate customer profile is fully understanding your own products, services, and how customers are actually interacting with you.

Start by gathering a list of customers who have purchased from you in the past. This may come from loyalty program data, transaction data, or perhaps email list sign ups. Identify the customer records that have contact information, which you can use when enriching your customer profile later on.

Prior to enrichment, glean what you can from your basic customer and transaction records. Are certain products or services more popular than others? Do you tend to see a surge in engagement at certain times of day, days of the week, or months of the year? Do more of your transactions come from online or in stores? What can you deduce about your customers based on those patterns? If you have some basic demographics in your customer data, like gender, check to see if there are any notable patterns.

You can also review customer service records and online reviews to glean insights into what your customers expect from your brand.

2. Get feedback from your customers.
Once you’ve compiled a list of customers with contact information, you can use that contact information to conduct surveys to collect customer feedback and understand their perception of your company and offerings. Tools like Survey Monkey, Checkbox or Survata are helpful and affordable for business of all sizes looking to gather customer satisfaction data.

There’s no denial that it can be difficult to get your customers to take part, which is why it is always good to have incentives for participation—like $10 off their next purchase if they fill out a survey. Additionally, use engaging communication channels to distribute the surveys and be sure to make the survey enjoyable, as well. Customers won’t finish the survey if they start to feel overwhelmed or feel like whatever incentive you’re offering isn’t worth the hassle.

3. Identify the customer based on demographics, psychographics, behavioral and environmental factors, and more.
You’re on your way to identifying your target market, but you will need to dig deeper to truly understand your customers. As the title for this section suggests, you can gain deeper insights by diving into demographic data, psychographic insights, and customer behavior. The better you know your customers' interests, gender, job role, location, and other factors that make up who they are and why they buy, the more effectively you'll engage them and win their business over the competition.

If you are taking a DIY approach, then you will want to collect as much of this information as you can via the surveys outlined in step 2. However, it’s usually more efficient and less biased to use data enrichment rather than surveys. This could be done by a customer analytics firm, such as Buxton. We gather extensive data on consumers, match it back to your customer records, then analyze the patterns in the enriched data to help you define the unique segments within your customer base.

4. Keep your customer profiles up to date; consistency is key.
Once you gather all relevant customer data, document your findings with an easy‑to‑read template. Remember that the template you make for each of your customer types should remain the same across your customer base. Having sections for demographics, behaviors and habits, psychographics, and environment (societal surrounding) would be a good start for your customer profile template. Make it a point to save the files in a place that is easy for all teams in your organization to access and use as part of their decision‑making process. Uniting teams with a common understanding of your customers helps you retain current customers and better reach potential customers.

5. Survey your customers to gain insight on changing habits, preferences, and interests.
Last, but not least, you want to keep your customer profiles up to date. One way to do this is to survey your customers quarterly to stay up to date on habits, preferences, and interests. These will always change over time based on both the customer’s experience and market trends and give you a source of both qualitative and quantitative insights. You can also keep a pulse on your first party data. If conversion rates of a product favored by a particular customer group suddenly decline, that’s a signal that it is time to dig deeper into what’s happening with that group. Every customer interaction is a chance to gather new insights.

In this case, information is everything.

Customer Profile Example: Putting Profiles into Action
Customer profiles are beneficial to organizations across industries. At Buxton, we help retail, restaurant, hospitality, and healthcare organizations create customer profiles and put them into action. Here’s an example.

A large U.S. health system partnered with Buxton to develop a data‑driven marketing campaign aimed at growing their orthopedic service line. The campaign focused on hip and knee replacement services, using Buxton’s analytics to develop patient profiles (customer profiles) and propensity models. These models identified patients most likely to need orthopedic care based on factors like age, gender, income, and preferred media channels. The initial campaign generated $2.3 million in incremental revenue with a 7:1 return on investment. By adjusting the strategy and adding new media channels in the second year, the health system achieved a remarkable 14:1 ROI, with direct attribution of $7.9 million and statistical attribution of $2.6 million.

Benefits of Profiling Customers
Profiling customers offers businesses a data‑driven approach to understanding their target audiences. By identifying key traits, preferences, and behaviors, businesses can create personalized marketing strategies that drive customer acquisition and retention.

One of the primary benefits of customer profiling is its ability to enhance customer satisfaction through tailored experiences, leading to stronger brand loyalty. Additionally, customer profiles help businesses allocate resources more efficiently by focusing on the most profitable segments.

Whether it’s improving merchandising/service mix decisions or designing marketing strategies, customer profiling empowers brands to make informed decisions that drive growth and long‑term success.

Customer Profiling Challenges
Creating accurate customer profiles presents several challenges that can impact a business’s ability to effectively target potential customers, set appropriate pricing, and more.

• One key issue is the availability and quality of data, as outdated or incomplete information can lead to inaccurate insights.
• Additionally, consumer behavior shifts rapidly, making it difficult for businesses to maintain up‑to‑date profiles that reflect evolving preferences.
• The DIY approach described in this blog can be quite time consuming. Many brands find it helpful to work with an analytics provider to create the profiles.
• Finally, some companies may realize that the customer profile they attract today is not the customer profile they want to attract in the future. Defining aspirational customer profiles can involve some guesswork since the brand lacks customer data on this new customer type.

In the End
Customer profiling is a way to create a portrait of your customers to help you make important decisions concerning your service, product offering, marketing strategy, and even store locations. Through these 5 basic steps, your company will be well on its way to obtaining that customer profile that will be a great help as your organization grows and evolves.

Buxton is the leading customer analytics firm that helps organizations identify who their customers are, where those customers are located, and the value those customers have to the organization. Their analytics solutions and technology, backed by over 30 years of retail site analysis experience, provides the insights needed to make informed decisions and drive results.

2651 South Polaris Drive
Fort Worth, TX 76137
1-888-2BUXTON

buxtonco.com

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