Knowing and understanding your customers is one of the most fundamental concepts in each successful business. The digital age we live in made companies set onto learning more about their customers’ needs and preferences by forming detailed profiles about them.
Companies accomplish this through examining and gathering data from social content, third-party cookies, purchased demographics, and much more. However, parallel to this growing interest from companies, the demands for consumer data are growing too. For instance, businesses can track their phone’s whereabouts to display ads unique to certain locations.
Let’s see what lies in the essence of customer profiling, the downsides, and why placing customer needs above your company’s needs is essential for making customers feel safe in the digital world.
What is customer profiling?
Customer profiling, often also referred to as “consumer profiling,” is a way companies gather data about the identity of their customers to define the audience they are targeting. It’s getting as close to your customers as you can so that you can properly reach them.
Nowadays, customer profiling goes way beyond just demographics. However, though you may think at first that customer profiling is based just on thorough research, it’s much more than that. Proper profiling lies in acquiring a great insight into your customers’ needs.
It is all about extracting valuable insights from the gathered data about your customers to know everything about the market they are surrounded by and how they make their purchases there. All leading brands collect data about their consumers, and many of them get in trouble for being too data hungry. Additionally, users themselves struggle to control their data.
How does it work?
These branded companies use the gathered data to reorganize the positioning of their brand, their marketing strategies, and the way they message consumers. Gathering such data can be completed in two ways.
The first is buying e-commerce data, which can sometimes fail because the data you purchase can be inaccurate and outdated. The second option is scraping data from the web. The second option requires web scraping software you must keep up to date and is, naturally, a bit more expensive solution.
But when you invest in a web scraper once, you’re in it for the long run. Indeed, customers may feel attacked when other parties try to collect their data, so you should inform your customers about digital privacy and internet security.
These two safety measures often overlap, but basically, digital privacy protects the customers’ data from getting exposed accidentally. At the same time, internet security ensures that when their data must be exposed (as is the case here), those other parties carry it out in the safest possible way.
The downsides of profiling your customers
Each branded company uses digital analytics, marketing, and advertising solutions to track their customers and create data profiles about them. This type of data gathering shifted the ways branded companies understand the needs of their customers.
But the creation of individual profiles is far from the most effective and fastest way to understand all the needs, intentions, and struggles of your customers. Brands shouldn’t focus on knowing who their customers are, rather on what they want and why.
Therefore, the leading downside in gathering data information is breaching the safety net customers like to have. But thanks to the overall advancement of machine learning and web scraping, companies can focus on understanding just the “what” and “why.”
The thin line
Consumer profiling sounds harmless in theory. After all, companies reach the clients that are most likely to be interested in their products or services. However, many consumers would disagree with this. Having their online activities directly affect the ads they see makes users feel like they are constantly tracked.
Additionally, it is generally illegal for businesses and law enforcement to profile users according to their race, ethnicity, or gender. However, there is news of how algorithms enforce certain racial or gender biases.
Therefore, many digital users do not want to be profiled. Or, to the very least, they wish to keep some things private. Millions of users change their habits or the tools they turn to daily. For one, many consumers go for privacy-focused programs like a VPN app. The latter encrypts internet traffic and hides users’ IP address. As a result, online entities get to extract fewer details about their digital lives.
Conclusion
Hopefully, now you understand what customer profiling is about and what its main downsides can be. The key to successful brand marketing is placing your customers’ needs above yours and not just gathering data to target them with ads.
You should focus on understanding their perceptions and advise them to stay safe in the digital world, where internet privacy plays the most significant role. Nobody likes their data to be misused and exposed, and neither will your customers. So, why not make them feel safe online?