Customer Base – Definition, Types and How to Build one

Hi!, this is {narrator name}. Business owners are always looking for ways to grow their customer base. In addition to gaining new customers, they also focus on retaining ones because the probability of selling to an existing customer is 60-70% compared to the 5-20% chance of selling to a new prospect.

But even with modern technology, business owners still struggle to find effective ways to acquire new customers and retain them.

In this class, we’ll break down what a customer base is and provide tips on how your company can grow and retain its existing one.

It’s essential to identify your customer base because these people are incredibly valuable to your business. They buy your products the most and rely on your company to help them achieve their goals. Recognizing these customers will help your marketing, sales, and customer service teams build a productive relationship with your customer base.

Within your customer base is a subset of customers referred to as your installed customer base. These customers are at a specific point in the customer journey that differentiates them from the rest of the people in your customer base.

While lead acquisition is essential for building a customer base, it’s not enough to build your installed base. If you want your business to be successful, define the most effective way to balance lead acquisition and customer retention, and both your customer base and installed base will grow.

Now that you can identify your customer base and installed base, you’re probably wondering how to build, grow, and retain one. Let’s find out.


Customer Profiling Definition and Benefits 

Customers are an essential part of every business. Whether your business will be a success or failure will depend on your customers. Therefore, a company should never neglect their customers and spend both time and money learning about their customers. Customer profiling is one of the data-based methods that organizations can use to establish an understanding of their target audience.


Customer base can be defined as a group of customers who repetitively buys products and services of a company. The size of the customer base of a company influences the profit generated by the organization.

What is the customer base?

A customer of a company can be a person or an entity which buys its products and services to use them for their use. A large group of these customers forms the customer base of the company. It is essential to determine the right customer base of a company as it is the source of income of the company.

Knowing the right customer base helps a company to make crucial decisions such as marketing and advertising methods to reach your customers, price of the product, packaging of the product, etc. The right customer base of a company can be determined with the help of market research or can be known through experience or the company or by observing the customer base of the companies which sell similar products or provide related services.

The customer base of a company is also referred to as target customers. The customer base of a company consists of people with similar interests and the same preference for the product. A company creates its product by keeping the needs and requirements of its customers in mind. A happy and satisfied customer return to the company whenever he needs that product again rather than going to other companies. A company needs to retain its customers because getting a new customer is far more expensive than hiring an old customer.

A customer base of a company can be of two types such as, customers of a company that makes a significant but less frequent purchase is known to have a tall customer base. On the other hand, customers of a company that buys a product in small quantities but buys them frequently are known to have a broad customer base. Companies that sell products that are used daily have a broad customer base. Companies require good quality of products, attractive offers, and effective advertising and marketing strategies to keep their customers and to enhance their customer base.

How to determine your customer base?

How to determine your customer base

An excellent business idea is of no use if you don’t know which customers to target. Therefore, it is essential to determine the right customer base for the success of your business. In this section, you will learn about how to assess your customer base.

1. Conduct preliminary research

Conducting preliminary research is very important for the success of a business. Don’t skip this step at any cost. Many companies have failed because the people who started these businesses were so confident about their idea that they didn’t consider researching to learn about the situation of the market and customer base.

The preliminary research will not only provide you with minute details about the market that you are going to enter but also help you determine the right customers for your product or service. You will learn about which age group you want to focus on.

In the present times of social media and the internet, conducting research is not difficult to do research. You can join different social media pages and forums and learn about what people want and expect to determine your customer base. Moreover, you can create your page and can survey to get the answers to specific questions.

2. Conduct secondary research

Preliminary research will provide you with enough data to move in a particular direction to make some decisions. But secondary research is necessary to learn in detail about the customer base for your business.

For example, whether you are a business planning to target a particular age group, income group, gender, or ethnicity. All of this information is important to make crucial decisions regarding your business. Moreover, data collected using secondary research will provide information about what changes you are required to make to sell your product in a particular area.

3. Consult a business development agency

If needed, you can consult a business development agency to get information about the latest market trends and learn about the changing market conditions from the market experts. You can learn about the demands of the customers and using this information can modify your product or can introduce a different variant of your product to increase your customer base.

You can meet other small entrepreneurs and can join the business community of your area. Interacting with other entrepreneurs can also provide you with other business opportunities and you can learn about reliable and excellent suppliers. Moreover, you can create a product to satisfy the needs of customers which over previously overlooked by the already established businesses in that area.

4. Visit businesses similar to your business

Visiting the companies of your rivals in the market has several benefits. You can learn about both their strengths and weaknesses. Having this knowledge helps gives you an advantage over your opponents. You can modify your product o service to provide all the things that your competitors are missing. In this way, you can also attract their customers to increase your customer base.

Different types of customer base

Loyal customers

1. Loyal customers

Loyal customers are a gem for your company. These are those customers who have been buying your products regularly at least from the past one year. Your loyal customers make the most significant portion of your customer base.

Loyal customers are the most significant contributors to your annual revenue generation. Therefore, a business needs to keep hold of these customers. You can keep your loyal customers happy and satisfied by providing the recognition for their loyalty and giving the advantage in the form of a discount or offer on your product.

2. Recurring revenue

When a business generates its revenue by selling memberships or paid accessibility, consider their customer base to the active members of their business. These customers are also referred to as subscribers. For example, Netflix considers its customer base to those viewers who have subscribed to its platform by paying full subscribership.

3. All customers

The third and the last type of customer base is “all customers”. This category of customer base considers all the customers who have purchased at least once in the past year. These can be those customers who tried your product once due to curiosity or because of an offer provided by you.

5 Ways to build your customers base

Ways to build your customer base

Plays an essential role in the success of a business and a company must keep its customers at the same time enhancing its customer base. In the present competitive times, increasing the customer base is very difficult as customers can easily switch to other businesses. However, in this section, I will share a few methods that you can adopt to build your customer base.

1. Make the use of social media

Social media is a platform where you can reach a homemaker as well as a professional. Social media is one of the easiest ways to grow your business. You can advertise your product without spending too much. Create a social media handle of your business and share information about your business, such as fresh content about your business, information about the launch of new products, and information about sales and offers on these platforms.

Make sure to share your content with all the groups you are part of and don’t forget to tag your customers in the post. In the present times, both e-commerce and offline businesses are making the use of social media to reach their audience and to learn about their preferences. You can either hire a professional to create content for you or can upload content on your own.

2. Consider the opinion of your customers

The customer is king in the present times. The success of your business also depends mainly on your customer base. Therefore, if you want to increase your customer base, then it would be great that you take the opinions of your customers to modify your products and services.

There are two benefits of taking the advice of your customers. First is that you learn what your customers want and can create products and services to fulfill their needs. The second benefit is that your customers will feel valued and this will evoke a sense of loyalty in them. You can create a survey and can share it on your website or social media platforms or you can conduct interviews offline of your loyal customers.

3. Distribute free samples

People love free things. Moreover, if you are new in the market and want to create your customer base or launching a new product, then the best way to make your customers trust your product is by giving them a chance to try your product before they make the final purchase.

4. Keep your website up to date, and share fresh content with your visitors

Your website is your face. People check your site to learn about you and to learn about the products and services. Therefore, you must keep your website up to date and regularly share fresh content on it. This will help your customers to trust your company.

5. Maintain excellent customer support

One thing that customers loath about a company is their lack of customer support. Especially in the case of online businesses, the role of customer support is significant. Provide active customer support to your customers to retain them, also don’t forget to include various medium, so that your customers can reach you through any platform that they are comfortable with.


A customer profile can be defined as a detailed profile of your target customer or group of customers based on some standard details, such as age, demographic location, lifestyle, spending pattern, interests, income, creditworthiness, purchasing preferences, and purchase history.

What is customer profiling?

Customer profiling contains detailed descriptions of the target customers of an organization. It represents the little details of your customers. The details in the customer profile are filled after proper research.

It contains information like age, demographic location, income, buying behavior, preference of products, and the kind of services they use.  A customer profile can be prepared for an individual customer or created for a group of customers with similar preferences and descriptions. The customer profile can be used to know all about your customers.

A well-prepared customer profile can come handy in various situations. For example, customer profiling can be used to prepare an effective marketing strategy to attract the right customers for your business.

Without customer profiling, you might end up preparing a marketing plan which is not focused on a particular group of customers. There are chances that your marketing plans are either targeted to the wrong group of customers or are targeted to a large customer segment. In both scenarios, you will end up wasting your marketing efforts, and your return on investment will be low.

For example, a retail store plans to create a scheme to increase their number of regular customers and maximize their spending. To do this, they plan to launch a shopping cart that will benefit customers if they shop for a certain amount of money every month.

It is essential for the manager to understand their customers and do customer profiling to make their scheme successful. Customer profiling will help them to understand customers’ description and know what shopping limit will attract more customers.

A refined customer profile will help the store manager to add impactful features to the scheme. In this way, they will not only succeed in attracting more customers but will also build stronger relationships with their customers. A well-curated customer profile helps the organization to establish dominance in the market.

The benefits of customer profiling

The benefits of customer profiling

After learning about what is customer profiling, next, you must be wondering what the advantages of customer profiling for your business. Using customer profiling for your business has several benefits. Let us learn about them one by one.

1. Targeting relevant audience

The first and most crucial benefit of customer profiling is that it can be used to attract concerned customers for your product. When a product is developed, it is developed to fulfill the requirements of a particular customer segment. Therefore, they need to target their marketing efforts to only that group of customers.

Customer profiling will provide valuable information such as what age group of people should be targeted, whether the marketing efforts should be curated for male or female audience, what income group of people would be able to afford the product. Answers to all of these questions can be acquired through customer profiling.

Once you have this information, you can decide the budget you want to keep for your product’s marketing and can choose the right platforms to reach your target audience. For example, if a credit card company wants to introduce free access to airport lounges to their credit card holder, they must target people who travel frequently. Not all credit cardholders will be the right target audience for such credit cards. In such a scenario, customer profiling will help the company prepare its customers pool, who is the right choice for such credit card marketing.

2. To increase the response rate

Companies market their products to reach the right customers at the right time. Your marketing campaign will be a waste if it is not targeting the right audience and generally targeting everyone. You will end up wasting many finances in promoting your products to people who can not even afford your product.

Therefore, customer profiling will give you an exact idea of target customers who can afford your products and be interested in buying your product. Having this knowledge will help you in choosing the right marketing method. As a result, the response rate of customers will increase, and you will get better returns on your investment in marketing campaigns.

In the previous example, the right customers for airport lounge access are those people who travel frequently. Therefore, you can promote your credit card to a particular group of customers based on your customers’ profession, their monthly expense, and income. You can acquire this knowledge from customer profiles.

3. Enhanced customers acquisition

A customer profile provides you a clear picture of the characteristics of the ideal customers for your business. Therefore, you can focus on customers only with these characteristics.

There will be high chances that these customers will convert into your potential customers. Therefore, your marketing efforts will have a high rate of return.

4. Improved market penetration

Market penetration is one of the company’s major concerns when it introduces a new product in the market. With the help of customer profiling, a company understands the scope of their market.

They learn the number of opportunities available in the market for their product by learning about the target audience’s size. Improved market penetration is the most crucial benefit of customer profiling as it helps determine how to grow the company’s business.

5. Gain customers loyalty

Gaining loyal customers is very important for an organization. Loyal customers are not only the advocate of the business, but they also help companies to generate regular revenue. A company becomes successful not only by acquiring new customers but also by retaining its old customers.

They encourage their customers to stay loyal to the brand and buy from them rather than other businesses.

Customer profiling plays a vital role in converting your customers into loyal customers. By customer profiling first, you target customers who are potential customers of your product, and later you can serve them better by understanding their needs and demands.

6. Helpful in account-based marketing

Personalization is a new way of doing business. Nowadays, more and more customers are attracted to companies that give personalized offers, products, and services. However, providing personalized services is not an easy job.

You will need to get in touch with each of your customers on a personal level. This might be difficult and time-consuming. Therefore, customer profiling is a great way to provide personalized services to your customers.

You can learn about their pain points and can create a product or services accordingly.

Steps to create a customer profile

Steps to create a customer profile

The following are a total of eight steps that can be followed to create a customer profile.

Step 1: Concentrate on your business and the services you provide

The first step is to pay close attention to your business and the products and services. How does your company help people? How does it solve the problems faced by customers? Who are the customers who can benefit from your business?

If you already have an existing customer base, it is crucial to take a close look at your existing customer base. This analysis will help you to create a customer profile.

Step 2: Get in touch with your salespeople

Your salespeople are the ones who interact with your customers on a day-to-day basis. They know customers and what they like or dislike. They know what kind of behavior in customers triggers them to buy the product.

For example, you can ask them to make a list of queries that most customers ask about. If most of your customers have questions related to the price of the product, that means you need to prepare a strategy to deal with the issue as your future customers might also face the same problem.

Step 3: Review your customers’ journey map

A customer journey map is a document that mentions all the milestones reached by customers with the company.  This journey will help you to figure out who are the customers who buy your products and how they are interacting with your business.

Only by reviewing the customers’ journey with your business, you will know what they expect from your business and what is triggering them to make the final purchase. You can make the list of challenges that your customers faced while making their journey with your business.

To make customer profiling more useful, you can also interact with your customer at each point when they reach a specific milestone. Interacting with each customer might be a little difficult, but it will provide you with detailed customer profiles.

Step 4: Analyze your customers demographically

The main advantage of customer profiling is it helps you understand the characteristics of your target customers.

Your company might be serving in the different regions, and you want to make the services and products by your company that serves the needs of one particular part. To do this, you need to analyze your customers demographically.

To define customer profiles of a specific demographic area, you should look in-depth to learn about the customers’ needs and demands. For example, determine what age group of people are more interested in your brand?

Step 5: Take feedback from your customers

Your customers play the most critical role in making your business successful. Therefore, when you build a customer profile, it will be essential for you to include your customers in the process. To do this, you should spend plenty of time with them. Taking one-on-one interviews with your potential customers is one of the best ways to collect information.

While conducting interviews, you will get to spend time with your customers, and you can view their reactions to your questions in real-time. In addition to this, you will also establish strong relationships with your potential customers.

When customers feel comfortable with you, they will share raw information with you. This information will help you to build well-informed customers’ profiles.

Getting information directly from your customers is better than the information that you get from your salespeople because there are chances that your salespeople can provide altered and modified information.

Step 6: Examine the information that you have collected

In the next step, the information collected should be documented and examined. Make a list of issues faced by your customers and what their expectations are. Once you are aware of issues faced by your customers, then you should brainstorm on the points like what can you do to solve their problems?

How can you make your product or service better than your competitors? Etc. Having the answers to these questions will help you build a strong customer profile that you can analyze to enhance your services.

Step 7: Understand your industry

Once you have collected and analyzed information collected from your customers, the next step is to establish an understanding of the industry. Understanding your industry will help you know how you should create your brand’s image in the market.

Analyze how customers view other brands and learn from those brands to increase the market share of your brand. Having a deep understanding of your industry will help you to create a strong customer profile.

Step 8: Create customers profile and use them for marketing purpose

In the last step of customer profiling, create the customer profile using the information that you have collected. The customer profile must be designed in such a way so that it can be easily referred to for marketing purposes.

Create an effective marketing plan for the promotion of your products and services with the customer profile you have created.


Customer profiling is essential for creating an effective marketing plan. It will not only help the marketing team but will also assist the sales team in interacting with customers.

The customer profile increases the effectiveness of your marketing strategies as the data provided by the customer profile is the data collected from real and potential customers of your business and is not collected through conducting surveys.

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