A customer profile is the data image of the purchasing behavior of an individual consumer. The transactions carried out with the customer are continuously stored in a data processing system and used for customer relationship management purposes.
The customer profile enables providers, for example, to address advertising individually to the consumer who, based on his or her purchasing behavior stored in the customer profile, is more likely to be a buyer of the good than the average. For example, cross-selling can be used to offer the customer other goods from the customer’s own range of services on the basis of the stored purchase transactions; through so-called up-selling, on the other hand, he is offered other, higher-value goods or accessories to the purchased items.
Data Mining and Customer Profiling
In practice, data for customer profiles is obtained, for example, by means of customer cards such as Payback or credit cards, as well as by tracking, storing and linking user data on the Internet (web tracking), including via social networks such as Facebook (“Like”), Twitter (now X), etc., as well as during electronic gaming, as well as the use of data that can be obtained in the “Internet of Things“.
The profile offers the customer the advantage of receiving “personalized” advertising related to products and services that, according to their previous purchasing behavior, are most likely to meet their needs and tastes.
However, a customer profile is not harmless from a data protection point of view. For example, a loyalty card holder used to buy family and baby items, but now suddenly replaces them with alcohol and ready-made meals. An analysis of his buying behavior now suggests that he may have had to go through a separation.
Customer profiles can be used to differentiate prices at the expense of consumers. Therefore, the creation and working with customer profiles is subject to stricter legal restrictions in some countries.