Profiling

Profiling is a simple means of describing what is happening in a complex database in a way that increases our understanding of the people, products or processes that created the data in the first place. Group profiles are used in marketing to tailor messages and product / service offerings. Direct marketing traditionally uses profiling to make high targeted customer contact. In addition, loyalty cards, customer relationship management and channel strategies may all rely on customer profiling.

By describing behaviour of a customer, it often provides an acceptable explanation. Decision trees are often profiling tools for customers and clusters can also be used to build profiles. Profiling can be done using a number of customer data sets and can also include socio-demographic data from external sources. Profiles are often based on demographic variables, such as geographic location, gender and age. Profiles can also be established according to specific behaviours that a group of people share or their status in relation to their behaviour e.g. their credit risk.

Profiles are classified according to either an individual or a group. Individual profiling will show the particular characteristics of that person with the intention of making communications to them truly personalised. In marketing contexts, it is usually the case that profiling looks at behaviours and features of individuals that enable them to be categorised as a certain type or group, based on shared information with others.

Group profiles are often then shared to build predictive models. These models may take the behaviour of some members in the past and predict behaviour of the whole group in the future, for example in relation to whether they will be an high-value customer.

Profiles can be built using a number of approaches. Some companies build bespoke profiles of their customers and prospects and other use one of the many profiling technologies available on the market.