Customer profiling is the practice of analysing customer behaviour, and allocating profits and costs to the various activities that the customer conducts with your business. If this is carried out on a systematic basis, the understanding that you develop of your customers helps you:

• Identify your ‘gold’ customers that spend the most money with you - on a sustained basis,
• Understand spend patterns, and thereby use sudden changes in spending patterns as early warnings of customer defection.
• Run targetted marketing campaigns - where only customers with the greatest liklihood to respond are contacted

Now that many companies have implemented CRM systems, they have an operational platform that supports collecting customer information on a ongoing basis. The logical next step is to generate action-inducing business information that helps the business get the maximum value from its customer information.