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What is a Customer Profile? - Definition & Examples

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  • 0:00 Customer Profile
  • 1:02 Components of Customer…
  • 2:29 Benefits of Customer Profiles
  • 3:24 Drawbacks of Customer Profiles
  • 4:02 Lesson Summary
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Lesson Transcript
Instructor: Savannah Samoszuk

Savannah has over eight years of hotel management experience and has a master's degree in leadership.

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.

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.

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