Topic 2.1: Marketing to Customers

Marketing

All the activities a business does to identify customers’ problems, needs, and wants AND to promote, sell, and deliver products.

Customer Data

Information about customers collected to help marketers decide which customers to serve, which products to produce, and how to market them effectively.

Demographic Data

Measurable qualities used to describe a population - age, sex, race, ethnicity, income, location. Concrete and countable.

Psychographic Data

Cognitive and behavioral factors - interests, activities, values, lifestyles. Hard to measure; often inferred by behavior.

Click-tracking software

Digital tool that records where a user clicks on a website. One of the most common ways businesses collect behavioral data.

Data broker

A business that buys, packages, and sells customer data to other businesses.

Market segmentation

Aggregating potential customers into groups based on shared demographic and psychographic characteristics.

Market segment

A specific group of customers identified through segmentation.

Target customers

The buyers most likely to purchase a product because of their wants, needs, and preferences.

Customer profile

A fictional description of a specific sample customer who represents a target segment. Including demographic + psychographic data + wants + needs + preferences.

Customer relationship

An ongoing connection between a business and its customers that creates trust, repeat purchases, and referrals.

Personalized service

Service tailored to a specific customer’s name, history, and preferences - a key tactic for building relationships.

Rewards program

A loyalty system that gives perks, points, or tiers to frequent customers.

Customer Acquisition Cost (CAC)

Total marketing + advertising + sales costs divided by the number of customers acquired. Strong relationships reduce this.

Lifetime Value (LTV)

Estimated total amount a unique customer will spend on a business’s products over time. Strong relationships increase this.

Privacy infringement

Collecting or using personal data that customers did not knowingly agree to share.

Identity Theft

Stolen personal information used to impersonate a customer for financial or other gain.

Fraud

Financial harm caused by misuse of customer data (e.g. stolen credit-card numbers used to make purchases)

Data Breach

An incident where customer data is improperly accessed or stolen-leading to fraud, identity theft, and brand reputation damage.