When Customer Profiling and Stereotyping Are All in the Line of Duty

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April 24, 2012

Airport security guards are warned not to violate civil rights by profiling passengers. Human Resource recruiters are under watch by the EEOC, so they don’t racially profile candidates. And police officers are under constant watchdog scrutiny to prevent future criminal, predictive, or racial profiling.

However, Chief Marketing Officers are one of the few professionals who must profile people as part of their jobs. Of course, they must follow privacy and disclosure laws, but a successful marketing manager can and should profile customers with the intent of selling them appropriate products and services.

Customer profiling in the marketing world is defined as finding new prospects just like your best customers by comparing the demographic profiles of these individuals with your prospect population.

During what I’ll call the lazy years of marketing, marketers might describe who they believed to be their best customers to a list broker and that list broker would sell them a list of prospects based on a few pieces of business or consumer criteria (revenue, location, number of employees or age, income, education).

Fast forward to today and multiple overlays (one option includes 44 different overlay tools of variable data) can be applied to your customer database to pinpoint with laser accuracy what your prime customer profile is and how to duplicate it. Just turn over your customer file to be matched against a comprehensive dataset of U.S. business and/or consumers to create a customized market penetration analysis. The strength of customer profiling lies in its ability to provide up to 28 consumer and 16 business demographic overlays, revealing your true customer.

Using data to drive your business decisions, you can then take your marketing (and your business) to a whole new level and construct marketing models to squeeze even more sales out of your budget.

Healthcare Company Finetunes It Marketing Spend through Profiling and Analysis

A $20 billion healthcare company used analytics to optimize its marketing spend. Client marketing was geared towards direct to consumer advertising, with TV accounting for more than 50% of the budget. The seven-brand portfolio had a high spend-to-sales ratio of 25%, and management wanted to increase efficiency.

Using data sources such as the client’s internal data, financial and government records, models were built to measure sales by marketing tools targeting to pharmacists and other audiences.

The models found that 13% of sales were due to direct marketing programs, TV commercials, pharmacy displays, and sales calls. However, this was unprofitable relative to the 25% spending-to-sales ratio.

As a result, this healthcare company reduced spending 10% and held the savings to optimize its current budget. The reduced spend scenario increased profits while maintaining sales

How You Can Apply Data and Profiling

Don’t let the analytics or terminology stop you from profiling, analyzing your data and conducting data mining. There are plenty of companies on standby to assist you with creating a snap shot of your best customers and best marketing approach to reach them. The best data is data that is put into use finding more great customers.

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