Are you considering an investment with long development and payback period? Then future customer profiling can help you increase its ROI.
In this post, you'll read about a large, long-term investment in real estate: the development of a new neighborhood and how future customer profiling helped getting the numbers right.
When you're not in real estate, use the post as a thinking prompt about your future customers. Do you know enough about them to make your investment worth your while?
Nuff said. Let's take a look at this recent future customer profile I developed:
What were the challenges that your client was facing before you developed a future customer profile?
My client was investigating the feasibility of a large investment in real estate. The plan was to build a new neighborhood and they wanted to know if and who would want to live and work there, and how much they would be willing to spend.
The architect and developers were calculating ROI based on current facts from the real estate market. They were looking at ground-based construction (expensive family homes) because these type of houses were in high demand. There were three issues though. Firstly, it was not likely that the people that could afford such houses would want to live in this particular area. Secondly, they expected the housing market to change, under pressure of the Ukraine war and climate change effects on prices of construction. Thirdly, the construction would take at least 20 years, so they were wondering if it was possible to find out if and how customers and their tastes would change.
How did developing a future customer profile help you to overcome these challenges?
Future customer profiling gives plenty of solid clues about how demand changes, in numbers, customer demographics, behaviors, and needs.
What were the benefits of developing a future customer profile?
With the profile, the client was able to increase the project's feasibility with a high degree of probability. Feasibility hinged on the balance between the number of houses in the neighborhood and the potential market size and purchasing power. The customer profile suggested a change from fully ground-bound to including a large area of appartment buildings (more houses). It also let several large groups of buying persona with enough money emerge. So, feasibility got a boost in every aspect.
How did developing a future customer profile improve their marketing and sales efforts?
The profile included much information about the cultural background and needs of the future customer groups. This information came from several independent, reliable sources and could be validated with customer surveys. With these insights, both the types of house, their look and feel, and the functions in public areas could be tailored to future customer groups. Instead of generic information or wrong information, the client now possessed materials that would attract the right customers.
How did developing the profile help your client to better understand their future customers' needs and wants?
A future customer profile is more than sociographic characteristics. It also takes into account how the customers are interacting with -in this case- house ownership and community building. If available, I bring in personality characteristics too. So you get a good feel of the people: where they come from, what they like, in what stage of their life they are and what that means for you, how they use your product, and what they are willing and able to pay.
What advice would you give to other businesses who are considering developing a future customer profile?
The best customer profiles are developed from intensive desk research paired with qualitative testing. It will take some time to compile, and to let it sink in and formulate the strategic consequences of the profiling.
Therefore, I suggest to plan enough time for the profiling project and to make sure that it isn't based on current marketresearch, but on solid foresight research.
Future Customer Profiling: A Key to Success
The world is changing, and so are your customers. If you want to stay ahead of the curve, you need to be able to predict their needs and wants.
Future customer profiling can help you do just that. By understanding the demographics, psychographics, and behaviors of your future customers, you can develop products and services that they will love.
Are you sure you know enough about your future customer? Let me know in the comments.
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