What is customer segmentation?
Breaking down customers into segments according to attributes such as customer behavior, loyalty, demographics, etc is referred to as customer segmentation. This allows for a business owner or marketer to more precisely target customers that are categorized into smaller groups with more relevant content. Creating marketing activities around this idea could lead to more conversions and efficient campaigns.
The research tells us that customer segmentation has been on the rise. According to a survey handed out to over 1,000 marketing, digital and e-commerce professionals, customer segmentation is high on the priority list. 72% of the professionals who participated in the survey stated that they used customer data and segmentation.
Why customer segmentation is important
One of the biggest benefits of customer segmentation for a WooCommerce store is more efficient marketing. Because campaigns based on customer segmentation are highly targeted, they will perform better and cost less. Some other main advantages include the following:
- Personalized customer journey
- More effective upselling and cross-selling
- More efficient marketing and better ROI
- Better customer retention
- Discover new market opportunities
How to create customer segments for e-commerce
Now that you have a better understanding of customer segmentation and its importance, you might be wondering: “how do I go about engaging in customer segmentation?”
Customer segmentation for e-commerce requires a massive amount of data work, meaning that you’d need software to sort through the data. There are dozens of tools that do customer segmentation to some extent, and few of them are actually good.
When selecting a tool for customer segmentation, two important factors include the accuracy of the results and the depth of filtering.
In this article, I’ll show you how to create some of the most important customer segments for e-commerce stores using Growmatik. But since there are too many segments to cover in one single article, I’ve divided this topic into two articles.
Now, let’s dive in!
Demographic segmentation is a practice of dividing customers based on the customer’s personal information such as age, gender, company, and much more. Using demographics as a customer segment for e-commerce is the first step in personalizing your customer’s experience. Here are a few examples and how to create them.
Age is one of the basic demographic segments. It is of high value because customer preferences and needs continually change as they age. For example, a clothing shop can offer different collections to target age-based segments such as babies, children, teenagers, adults, middle-age and seniors.
With age-based segmentation, your audience will respond better to advertisements. For example, to better communicate with millennials, the clothing shop should invest most of its resources on social platforms such as TikTok and Instagram while emails would be ideal for seniors.
To create this segment using Growmatik, assuming you already have the age information of your customers, you can import contacts and map the age fields to a new custom attribute as “age” in Growmatik.
Gender-based segmentation can be helpful if you’re selling gender-specific products or services. You can use this segment to send more relevant newsletters and product recommendations to your customers.
There are different methods to identify your customers’ gender. In Growmatik, there is a built-in gender filter which uses a gender rank to determine customers’ gender. To activate this filter, go to People page, filter for User personal detail > Gender and choose a gender.
This approach – while being the easiest – is not 100% accurate. If you want more reliable results, the best you can do is, as you guessed it: simply ask the customers! But know that this is not a very popular method among e-commerce stores since some people might be hesitant to share that information with you as it might be seen as getting too personal.
To segment your customers based on their gender, if you have already collected this information, you can import your contacts to Growmatik with their gender information and map a new custom attribute to the gender column within your CSV file. Later, you can access your customers’ gender information via the custom attributes filters on the People page.
If you’re aiming to reach out to the right customer at the right time, this customer segment for e-commerce can help you drive laser-targeted campaigns. You can utilize this segmentation in two ways:
- You can offer specific products or services to the people based on the type of business they are doing. For example, offering painting tools and equipment to artists makes more sense than offering these items to business people.
- You can segment your offers based on the customers’ occupation and their level of income to increase the likelihood of purchase. For example, while recommending a high-end smartphone to an executive-level employee is normal, it might be a bit too luxurious for someone working in the government sector.
- And finally, you can design new marketing campaigns specifically curated for a job title. For example, you can offer special discounts for teachers on Teacher’s Day.
To segment your customers based on their occupation, you can again import your customer contacts into Growmatik and map the column associated with occupation to a new custom attribute.
Birthdays are special days. People are usually happy and excited on their birthdays, meaning this is a great opportunity for you to come out and say “hi” to warm up your relationship with your customers.
Just by saying “happy birthday,” you contribute to your long-term relationship with customers. And if you’re generous enough, spice it up by offering a discount coupon such as a little birthday gift and you can hopefully turn this interaction into a sale.
To segment your customers based on their birthdays in Growmatik, just like the previous segmentations, import your customers and then map the birthday column inside the CSV file to a new custom attribute.
You can also categorize your customers based on their location, such as country and city. This valuable segmentation helps you with:
- Translating the copy of your email, pop-ups and website content
- Including cultural references in your campaigns for more relevancy
- Integrating the correct currency
But how do you go about doing it? With Growmatik, there are two ways you can segment your customers based on their location data:
To personalize the content of your website and pop-ups based on location: Go to the Automate page and add a new rule by clicking on the plus button. Select Location as the condition and then in the action field, choose any action you desire such as Show popup, Show page and Personalize page. When you’re done with the content, create the rule and exit.
To send emails based on location: Go to the People page and filter for User personal details and select the country, region, or city.
This is an important customer segment for e-commerce since it enables you to define the first stage of the customer’s life cycle.
You can design marketing campaigns for your new customers based on the type of new customers, and of course, the type of business you are running. One common method among e-commerce stores is to welcome new customers and share some useful information and links to get them started. Some stores go further and offer a discount coupon for their first order (if the new customer has not yet purchased anything).
How to segment new customers
In Growmatik, go to the People page and filter for User Subscription > Signup date and set it to a recent date.
You can also identify the customers based on their first order by filtering for Shopping activity > Purchase date, while selecting the first session selector on the top.
High-value customers (aka Champions)
These are your best customers who consistently make purchases and spend more money. It is certainly wise to treat these customers with more care than others. These are your best customers for a reason: they like what you offer and how you do it. And for the same reason, they are your brand ambassadors as well.
How to segment high-value customers
In Growmatik, go to the People page and filter for Shopping activity > Order value. You can combine this filter with other attributes such as Number of orders and Purchase date to generate more accurate results.
Repeat customers are those who come back to your store. This is usually an indication of interest, therefore, it is of high importance in marketing. There are multiple ways to create this type of segmentation.
How to segment repeat customers
You can create all types of repeat customer segments for e-commerce using Growmatik. One method, for example, is combining these filters:
- Number of orders: 1
- Purchase date: more than 3 days ago
- Visit date: less than 3 days ago
Remember that this combination is just to give you the idea. There are, of course, other attributes – which could be more appropriate to your business – that you can combine and generate more accurate results.
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Abandoned carts are one of e-commerce’s biggest pain points. In fact, e-commerce brands lose $18 billion each year just because of cart abandonment. Customers abandon their carts for different reasons, but if you identify those customers soon enough, you can use it to enhance your checkout experience or send reminder emails to customers to come back and complete their checkout.
How to segment cart abandoners
In Growmatik, go to People page and filter for Shopping activity > has abandoned cart. Alternatively, you can target cart abandoners in the Automate page when creating a rule. Just select User behavior > Abandoned cart.
Reactivated customers are those who come back to your shop after a period of inactivity. You can use this customer segment for e-commerce to personalize the content of your emails or website.
But how to reactivate inactive customers is beyond the scope of this article. Read this for tips on reactivating inactive customers.
How to segment reactivated customers
This segment is quite similar to returning users but with one slight difference. Customers who are returning to your store have been idle for some time. In Growmatik you can combine these filters:
- Purchase date: more than 60 days ago
- Visit date: less than 3 days ago
Again remember that this combination is just an example. You definitely need to adjust some parameters – such as the time length, etc. – or combine it with more attributes to generate a more reliable result.
For instance, if you’re sending regular newsletters to your customers, you can add these attributes as well:
- Email opened: more than 60 days ago
- Signup date: more than 60 days ago
Inactive customers (aka idle shoppers)
These customers haven’t made a purchase in a while. This segment requires your urgent attention or it will be lapsing sooner or later. Why? Because you likely lose about 22.5% of your subscribers each year.
There are dozens of ways to reactivate idle customers. You just need to ask yourself this: “How can I make this idle customer return to my shop again?” Because no one knows your business and customers better than yourself.
Just remember that the value you promise to contribute to people’s life is the best way to convince people, so try to remind your idle customers this. Here are some of the best practices to restore customers.
How to segment inactive customers
There are many ways to segment your idle customers in Growmatik. One common method is by combining these filters:
- Purchase date: more than 60 days ago
- Visit date: less than 30 days ago
- Email opened: more than 120 days ago
- Signup date: more than 160 days ago
Again, make sure to change the time length based on parameters such as your product average value, CLV (customer lifetime value), newsletter frequency, etc.
End of part 1
Although this article has covered a lot, we are far from done. There are still 9 important segments to review. In the next article, we move on to review deeper customer segments and how to create them using Growmatik. Read on to master the art of customer segmentation.