Insights Article

All companies need to understand their target customers in order to refine their marketing strategies and enhance the customer experience. Having a broad reach can be great for brand awareness but can lead to a loss of relevance in messaging. Even brands that think they know their core audience could benefit from a fresh perspective through data-driven insights. For instance, customers that you have grouped together based on their value to your business, whether through high total spend or regularity of purchase, could have vastly different motivations and pain points that affect their engagement with your brand.
Moreover, basing strategic decisions on historic knowledge of your core customers can lead to limited growth opportunities as you reach a point of market saturation, or not adequately reflect how audiences change over time. Market research methodologies such as segmentation can be instrumental in uncovering neglected secondary targets and previously over-looked customer segments.
Breaking down a core audience into more manageable segments, and creating profiles and personas for each segment, allows for increased personalisation and relevance across marketing and communications. By developing detailed profiles or personas for your segments that outline demographics, behaviours, needs, and pain points, businesses can create more relevant messaging, design products that meet customer expectations and enhance customer service. This targeted approach leads to higher engagement, increased conversions, and stronger brand loyalty.
Additionally, personas help align teams across marketing, sales, and product development, ensuring a cohesive strategy that resonates with the right audience. In a competitive market, knowing who your customers are and what they need gives your business a crucial advantage.
However, this is easier said than done. Businesses that create their own personas often encounter the following pitfalls:
1) Relying only on transactional data – which identifies high spenders without understanding who they are and why they purchase. These personas lack richness and are rarely embraced by the organisation.
2) Insights based on a small sample – these personas can be biased and do not provide robust insights.
3) Poorly defined and over simplified personas – these personas can lack nuance and don’t add to your understanding of your customer.
Customer profiles and customer personas can be used to paint a vivid picture of who your target customers are. However, it is important to understand key differences between the two:
Customer Profiles
- Customer profiles are a list of data points which can include statistics based on demographics, survey insights e.g. attitudes and brand perceptions, and sometimes CRM details such as previous interactions with email campaigns or online orders.
- Profiles can also be effectively used by B2B ventures to map factors such as company size, revenue, location etc.
- Assembling consumer profiles is worthwhile but can be time-consuming and complex; working with a research agency to conduct a market analysis can significantly reduce time and effort.
- Advantages: Customer profiles are based on data, are factual, and are more robust. You can create personas from profiles.
- Disadvantages: They require more resources to create and gather the data.
Customer Personas
- Customer personas tend to describe pen portraits that capture key characteristics and behaviours, often semi-fictional vignettes written from the point of view of a target customer, accompanied by illustrations.
- Personas can be built out using insights from focus groups or developed based on survey data: ideally, they are based on both.
- They can also be written internally by customer experience professionals. The disadvantage of this approach is that without hard data, these personas may be at risk of bias: based on assumptions and generalisations that do not provide accurate detail.
- Advantages: Easy to understand and integrate across the business.
- Disadvantages: You cannot create profiles from personas, and they are often not as accurate as profiles. The personas can be biased and can contribute to false assumptions about your customer.
Both customer profiling and persona creation can be key components of a brand’s toolkit when it comes to supporting sales and marketing strategy. They can also be an accessible way of communicating data across the organisation, improving buy-in across departments who have had less active involvement in the research process, and providing a unification of understanding and vision. At Clusters, our profiles and personas are always data-driven: providing you with the confidence to make decisions based on reliable insights.
Find out more about how we can help by getting in touch with one of our team today.
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