Customer Segmentation In eCommerce

Customer segmentation you can operate and use to tailor your Marketing messages

You hear over and over that you should not be doing one-size-fits-all marketing but customer segmentation and tailoring messages instead.
Why?
Because segmenting customers based on their behavior eliminates the guesswork – they literally show you what marketing works with them so you can just replicate it and get results. Segmenting customers is also sign of a digital marketing strategy going in the right direction.

By customer segmentation, you categorize your customers into smaller groups of people that have something in common and that makes thinking of offers and calls to action easier.
Being relevant and responding adequately to their actions is the basis of personalized marketing. It starts with acknowledging the differences in your customerʼsʼ behavior and working with them, not in spite of them.

Ok, but how do you do that? And what different messages do you use for each group?
Worry not. Here, we outline the basic customer segments online stores often have and suggest how to reach out to each one with relevant offers.

Note: we recommend using an eCommerce CRM for segmentation – one that can filter by actions and events is best.

Customer Segmentation List

High spenders

Every online shop should have some customers that spend a lot more than the average. They can either shop very often or they make large orders. Either way, theyʼre valuable for you because they make you far better profit than others who cost the same to acquire.
High spenders should be treated probably best of all customers and kept for as long as possible. Your communication and offers for them should show appreciation and make their shopping experience pleasant and convenient. How to identify them?

Filter your customer base by revenue (sales, CLV, LTV) -the simplest way is to take everybody who has spent more than the average CLV.
To make the list even more exclusive, you can select a revenue number a lot greater than the average – this, of course, will narrow down the selection.

What special things you can do to delight them and keep them around?

  • Premium products and special editions
  • Early access to new stuff
  • Free shipping, express shipping and so on
  • Free gift wrap
  • Surprises in delivery packages
  • Guarantees and maintenance
  • Dedicated support, fast way to reorder
  • Offer special bundles and value-packs

Cart abandoners

The tough bunch. You probably use special tools to fight – send a “Come back” email and thatʼs it. Well, not quite. While itʼs true many carts get abandoned because the shoppergot interrupted, other people leave because they decided they didnʼt want the product or saw an extra shipping fee.
To recover those orders, itʼs a good idea to tailor the message and increase the chances for conversion. How?

Segment cart abandoners by product or category of interest
Of course, you want them to go back and finish the order. But, if they had reasons not to, you need a plan B.
By using the interest they showed in a certain product or category, you can add more related items in the same email and give them more options. After all, your goal is an order, no matter the product, right.

Coupon lovers

If you use coupons, there are probably customers who only buy with a coupon and never pay full price. While this is kind of annoying, you can turn it into an advantage and stimulate more orders from these people – the coupon lovers. How to nail who they are?

Hereʼs the trick: filter your database by the action performed – “used a coupon”. At this point, it doesnʼt matter which one. Then, add another filter – the number of orders equals 1.
Thatʼs a workaround if your CRM can show you customers who only buy with a coupon directly (like 2 coupons used, 2 orders), go for it.
The last option is to tag them for each coupon and explore if the number of tags matches the number of orders.
I know itʼs a bit far-fetched, but itʼll save you giving away coupons to all customers and will make this group happy without hurting your margins so much.
What to do with coupon lovers?
Keep sending them coupons, but cut it back for people outside that group. The idea is not to devalue your products so much with constant promotions while keeping the sales coming from price-sensitive people.

Thrifty shoppers

Shopping habits matter a lot if you want to do effective marketing and not annoy your customers.
Some people like the big spenders buy a lot in one sitting, while others prefer coming often, but buying only as much as they need at the moment – one bag of dog food, just a pair of leggings or a bottle of shampoo.
The good thing is that itʼs easier to predict when theyʼre going to be needing a new item – shampoo lasts for about 2 months, so you know when to send a reminder. How to define the segment?

Choose a number of orders around or above the average and a low CLV (customer lifetime value, total revenue from a customer). This would give you a list of people who shop regularly enough but donʼt spend too much.

Possible tactics

  • Watch product cycles and send an offer shortly before their time to buy again
  • Offer bundles of related products (not separately)
  • Expose to content on new trends and products
  • Ask for feedback
  • Use wishlists to make targeted discounts

One-timers

Your favorite kind, am I right?
Fear not, every customer had only 1 order once.
Segmenting by the number of orders=1 is quick and easy.

What to do after that to get repeat sales?

  • Upsell and cross-sell
  • Use content to keep brand in mind
  • Make a game with a new product so they need to buy it to enter.
  • Ask for a review on the 1st purchase in exchange for a discount on the 2nd.
  • Use seasonal changes to present new collections.

Newsletter readers/ ebook subscribers

If you invest time and money in content and email marketing, youʼd want to know who actually reads it, right? It can help you come up with ideas to include or products to promote.

Tag them
We suggest tagging all subscribers so itʼs simple to monitor their behavior and orders and see if they were influenced to buy by something they read.

How to stimulate purchases from subscribers?

  • Regularly update them on new products, patents, features and so on.
  • Create informative, educational or entertaining content to engage them.
  • Include your products only subtly in all content, donʼt be too obvious.
  • Give them insider tips, professional consultations or any other form of value related to your products so they keep reading your stuff.
  • Occasionally, include special offers only for readers.

Registered browsers (leads)

Most stores generate leads with pop-ups, newsletter subscriptions, coupon giveaways and wishlists. If you also have registered users who havenʼt made a purchase yet, youʼre leaving money on the table.
Who are they?

The simplest segmentation is by the number of sessions (better be significant, more than 5, for example) and the number of orders equal to zero.
The really good thing, in this case, is that browsing shows interest – they didnʼt just register to download the pdf and forget about you.

Now, how to make them buy for the first time

  • Create product-heavy content in emails and on your blog that links to products directly
  • Give a discount for 1st order
  • Use the products and categories they looked at for remarketing
  • If itʼs a wishlist you gather emails with, fake a sale of their chosen items.

By location

On a personal note, I get frustrated when I get a promo email with fashion winter essentials, for example, that include a silk strapless dress and sandals. I live in a 4-season country and it really bugs me that someone thinks I can wear those things in winter here. You bet I donʼt buy it.
So, if you sell in multiple countries, itʼs a good idea to consider customer location when coming up with promotions. Now, winter is approaching in Australia, but summer is coming in Europe and youʼd best be preparing two different campaigns.
Whatʼs more, location is tied to certain cultures and lifestyles and you should show understanding and respect to the different traditions. Just like you canʼt serve tea without milk to a British person.

In what promotions location is important

  • Anything season-related: summer sales, beach essentials, spring cleaning, prevention of fall vitamin deficit, coping with winter blues, etc.
  • For products like skin care, sports, outdoor gear, clothes, food.
  • Any culturally-connected promotions: Christmas, spring break, Fatherʼs Day, Valentineʼs Day, Boxing Day, Singleʼs Day and so on.

Itʼs true people are aware of all these differences and might not take it personally if you shower them with spring break sales.
However, if they donʼt have such thing, your efforts are kind of pointless and look silly, donʼt they? Not to mention that pushing someone outside of their comfort zone (religious holidays, inappropriate clothes) is unnecessary.

The indecisive buyers

I bet you have a few customers who browse your site a lot but buy rarely. They might be chatting with live assistance or abandoning carts all the time. They find it hard to make a decision and youʼre losing their orders.
How to find them?
Filter all customers by the number of sessions (choose a good enough number like 7) and then by the number of orders (quite small like 3). Thus, you make sure those people browse twice as often as they buy.

Help them decide faster

  • Give more info about the products – more pictures from different angles, videos in use, size details.
  • When different colors are offered, change the picture to display the color.
  • Highlight all important info like deliveries, returns and exchanges.
  • Add social proof like an Instagram feed or Fomo.
  • Implement wishlists to keep items of interest easy to find.

(See the full list on the original Metrilo article)

See, in all examples, we donʼt fight peopleʼs habits. Weʼre not trying to change them – theyʼre your customers already and our goal is to keep them close without making them feel uncomfortable.
Instead, weʼre using what they reveal about themselves and their shopping habits to serve them in the best way possible. All the data we collect about them can also be used to refine our SEO techniques.
By studying them and adapting to their preferences so your marketing efforts donʼt feel intrusive, but welcome and timely.

Leave a comment

Your email address will not be published. Required fields are marked *