Profiling, specifically customer profiling, involves gathering information about the different characteristics of customers within a certain market.
The driving principle behind customer profiling is understanding and then being able to address the needs, preferences, and habits of customers. Markets are continuously changing, so it is no longer sufficient to simply distribute your products and services to a populated area. Profiling can help identify how this can be done. This is particularly true for online marketing and other relatively new developments in business.
One function of profiling is indentifying your most profitable existing clients, while simultaneously showing who the unprofitable clients are. It serves to pinpoint potentially profitable clients, as well. Such data is useful for a company that wishes to come up with a clear sales and marketing plan.
Customer profiling begins with the identification of parameters to be used in the study. These are dependent on the scope of the business, trends, buying habits, demographics, and distribution costs, among others. Based on these, you can start creating a customer profile.