Customer persona is an imaginary and ideal customer who collectively represents all your customers. To make it more interesting and to make references and to talk about actually companies give a name to it.
For example, an ice cream... company creates a customer persona called Jolly, who represents all its customers.
Creating a customer persona and nurturing the idea within the organization is helpful in several ways. When I know all my customer attributes, likes, dislikes, expectations, and trends I can better focus on my new products, improve my existing products, rightly target them and to the maximum extent I can meet their expectations.
But the bigger question here is how to develop such customer persona? The answer is very simple. Take all your past customers data both demographic and psychographic. Then try to develop a persona that best fits with the existing happy customers. You have your customer persona. Developing a proper customer persona requires painstaking efforts, analysis and validation. But it much more worth than the effort.
Customer persona is not a static one, rather a dynamic one, which changes periodically depending on the type of product you deal with. If you deal with commodities such as salt and sugar, your customer persona rarely changes. On the other hand, you deal with fashion products such as dress materials and lipsticks, customer persona drastically changes after the release of a blockbuster movie.