Rhiannon Garth Jones — 01 July 2019
3 min read

Who you’re talking to: customer profiling and segmentation

Who you’re talking to: customer profiling and segmentation

Customers come in many different shapes and sizes and what those shapes and sizes are makes a difference in how you sell to them. Getting to know them is essential to your customer acquisition process and customer profiling and segmentation will help you get there.

How mature your business is, and how far down the road of product development you find yourself, will inform whether you should be segmenting your existing customers or crafting a target customer profile. Doing either will help you optimize your sales efforts and make your marketing activities more targeted and effective, in turn boosting ROI and helping hit sales targets in the longer term.

Customer profiling and segmentation

To better understand and serve your existing customers, you should be breaking them down into separate groups – or segments – according to key indicators governing their relationship with you. This might be a range of things and will depend on whether your company is principally B2B or B2C.

If your business is B2C you might be interested most in lifestyle, demographic factors, and spending habits, while B2B companies will be more concerned with the size and industry type of the company they are selling to. And, no matter who you are selling to, you should consider segmenting according to how long you have maintained a relationship with a given customer, what kind of relationship that is, and, if applicable, where that customer is located.

This segmentation should be made in order to understand better how to serve those existing customers and, as a result, how to sell better in the future. Concentrate on segments that best define your company's relationship with a given customer. When it comes to customer segmentation, sometimes less is more. It can be tempting to think you can sell to anyone (and it might be that, one day, you can) but you must identify the right segment and focus on that at first.

Applying these lessons elsewhere

The same is true of your target market. These days, your “market” is often actually a sub-market. For instance, “technology” is a pretty broad market. “Smartphones” is much more specific (and still huge). While there may be a lot of overlap between your submarket and the broader market, narrowing down allows you to cut through the noise and focus on the prospects that matter.

This is also true of B2B or B2C categories. Does the size of the company matter? Does the technology they use factor in? Are you particularly interested in young companies or startups? Again, you need to really think about this and make sure you have a clear picture of who you are targeting.

Once you’ve nailed your initial customer segmentation and submarket, you can look to expand. Think of it as concentric circles: focus all your efforts on the first circle and, once you’re getting to the stage where you’ve exploited that circle, you can move onto the next one.

Customer profiles

An alternative way to approach this is by creating a target customer profile, or buyer persona. This is simply an example of the kind of customer you might be selling to – either now or in the future. You can put together as many of these as you think you need, and you should certainly have a variety of them if you are selling more than one type of product.

You’ll want to create a full bio and background for each one, giving some life to your fictional personas. Outline what it is they do, and the challenges they face which might make your product relevant and attractive to them. Take time to really understand what their pain points are, and how you can alleviate the pain. Extra points if you hone in on the exact words that they use to describe it, as you’ll hit closer to home in your communication.

You’ll probably use similar or the same categories as with a customer segmentation exercise, anticipating the needs of your future prospects. The data and experience you already have from your existing customers or users should inform this process as much as possible.

But creating target customer profiles should not just be limited to the types of customers you have now. Here you should address who you aspire or aim to be selling to. Just like with customer segmentation, you can think of your future expansion as concentric circles.

Once you know who you’re selling to, you will have a much better idea of how to go about actually selling. You can find our ideas and tips on how to do just that in our customer acquisition guide.

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