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Let's Define Terms: Customer Segmentation and Customer Profiling often go hand in hand, so it's important to define both:
- Customer Segmentation is all about dividing your customer base into various groups. These groups are typically defined by shared characteristics like demographics, geographical location, buying behavior, and interests.
- Customer Profiling, on the other hand, allows us to understand individual personalities, behaviors, interests, and habits.
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Where They Overlap: These two processes often overlap. For example, segmentation is usually part of an automated process and involves the use of personal data. This means that to fully harness the advantages of customer segmentation or profiling, you must ensure that you're using the right legal basis for your activities. These activities should also be clearly explained in your privacy notice and any other fair collection notices.
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Getting the Green Light: If the profiling and segmentation you plan to do is clearly outlined in your privacy notice and you've got the explicit consent from the individuals involved, you're good to go. But if you're in any doubt, don't hesitate to reach out to your Data Protection Champion.