A customer persona is a representation of the ideal customer of a business. Personas guide marketing, customer experience, and product development. Many companies create these personas through guesswork and rough observations. The Agile approach offers an effective way to develop personas using behavioral data, which can help businesses create mathematically-grounded personas and drive profit.
Benefits of Using Personas
The long-term goal of a business should be to understand each customer as an individual and customize interactions throughout the customer journey. This tailoring translates into more profit as enterprises adapt to the individual customer’s needs and willingness to pay. Accurate customer personas help businesses move away from broad averages about their customer base and are the first step towards this individualization. The best way to understand the underlying patterns of decision-making for your customers is the Agile Research Method. This method allows consistent incremental progress towards a clearly defined goal. It’s also highly responsive and keeps focus on the task at hand through re-assessments after each sprint.
Your customer personas should help you easily visualize and understand information. After creating personas, they should be visible to everyone in the company. It’s important to recognize that the creation of personas is not a one-time undertaking; there should be a system of feedback which enables new personas to emerge and existing ones to change. This system will require highly organized access-managed data, and the free flow of information between silos within a company. John Chambers, former CEO of Cisco, has emphasized the importance of breaking down silos. The 40% of businesses who fail to do this, he says, will die within the next 10 years. Search for usable data within your company: both observational data, including website data and feature usage, and existing experimental data. While searching for data, find customer touchpoints and identify the KIPs that will help you work toward your SMART goals.
How to Create Behavioral Personas
Although demographics can show predictable patterns after personas are made, personas shouldn’t be built around them; they should be based on the choices of customers. The behavioral data you have must be examined for quality. Two useful analytical methods for identifying customer personas are clustering and dimension reduction. Clustering is done by creating groups that are very similar within the group and simultaneously dissimilar to those outside the group. The other method is dimension reduction, which takes 15-20 variables and selects 5 that capture the effects of all 20 (which can be computationally advantageous especially with large data sets). This can be paired with the divisor differentials survey method, originally developed by the Modellers. The selected variables can be used for future classification models and, with the help of a data scientist, simulations.
Want to know more about Agile Research? See our post on Agile Customer Research for Product Managers.