Understanding your customers is critical to your business.
Whether you’re a bank offering deposit products, an insurance company offering income protection or an investment house responsible for retirement planning, it is critical that you have a better understanding of your customers. This will help put you in a position to provide better service, retain those customers and grow the existing relationship.
There are a number of ways to understand your customers:
1) Demographic Profiling — Smart marketers look at a demographic profile of their existing customers so they will understand what kind of products and services will be meaningful. You can look at various attributes of your customer base, including: geographical location, marital status, income, education level, etc. For example, a married man with children and a higher income level may be more interested in purchasing cash value life insurance or investment products than someone who is single, no kids and rents a studio apartment.
2) Psychological Profiling — This can be used to tell a lot about a person by understanding their motivations for purchasing your products and services. If you know someone drives a high-end foreign automobile, wears designer clothing and frequents expensive restaurants, these people may be motivated by status as opposed to the utility of a product or service. Perhaps these customers would be good candidates for “premium” products that your company offers.
3) Lifestyle Profiling — This helps you understand the way a person leads their life by looking at their hobbies and habits. For instance, if you come across someone who loves riding bicycles, they are also likely to be interested in other fitness products and outdoor activities. Perhaps they’re a likely buyer of disability insurance or retirement plan rollovers.
4) Cluster Coding — Cluster coding helps you understand what social class a person belongs to and how it may affect their lifestyle/buying habits. A person’s social class and their social activities are closely linked.
Regardless of the type of business you’re in, having a better understanding of your customers’ needs will help you serve them better, sell more products and grow your business.
About the Author:
Bob McCarron is the Financial Services and Insurance Practice Leader at SIGMA Marketing Group. Connect with Bob on , or follow him on .