We are now living in the era of the social customer.

The traditional customer is the one we all were as recently as a decade ago. We bought products and services and based our decisions a great deal on utility and price. We communicated with the companies we were dealing with by letter, phone call, and occasional e-mail, if they had the facility to do that.

But that customer changed because of a social change in the early part of this millennium. The customer seized control of the business ecosystem and it was never the same.

From: CRM at the Speed of Light: Social CRM Strategies, Tools , and Techniques for Engaging Your Customers

Customer profiling

Customer profiling uses predictive analysis tools to model customer activity so that in future, value propositions can be tailored more closely to customers. Models can be created that are based on customer needs, behaviours and profitability and, by drawing upon a large volume of data about customer segments, can be used to predict how customers will react to new situations. Marketing campaigns, for example, can be enhanced by using predictive customer profiles to estimate the likely responses of different customer segments.

From: HANDBOOK OF CRM: Achieving Excellence in Customer Management