Have you ever received an email from an ecommerce store about a product that you have already purchased?
I'm sure you did.
When I receive an email asking me to purchase an item I already have, I unsubscribe and never shop again from the store.
You didn’t take the time to check my buying history, I don’t want to be with you anymore.
Customers prefer receiving personalized offers and content.
According to the 2017 State of Personalization Report, 71% of consumers are frustrated when their shopping experience isn’t personalized and 44% of consumers reported that they're more likely to buy again from a store that offered them a personalized shopping experience in the past.
Nothing works better than segmentation for personalization. If you intend to offer highly personalized products and content to your customers, you need to segment users based on appropriate variables.
Here are 5 best ways to segment users for your ecommerce store.
Demographic segmentation divides your target market into small chunks based on personal attributes such as age, gender, marital status, education, income, and occupation.
Offering personalized experience becomes easier when you divide your audience into multiple age groups. You can create highly targeted marketing campaigns without wasting resources on mass marketing.
Segmenting consumers on the basis of age is perhaps the best thing you can do. The preferences, buying behavior, life challenges, interests, hobbies, and life problems change with age. You can target the right age group based on your product.
There are two primary ways to segment the audience on the basis of age.
First, segmenting on the basis of age ranges: 12-17, 18-24, 25-34, 35-44, 45-54, 55-64, 65 and above.
Second, segmenting on the basis of generations: Generation Z, generation X, millennial, and baby boomers.
Here is an example of how people in an age group have similar preferences and why it’s important to group them together. See how social media usage preferences change with age.
This is quite obvious.
You cannot target men and women with the same marketing techniques. Men have different preferences, likes, and interests while women have totally different preferences even they both belong to the same age group.
Here is how Clarks Footwear customizes emails based on gender. You can’t offer women footwear to men and vice versa.
3. Marital Status
There are certain industries where marital status segmentation works best. For instance, parenting niche. There are certain products that you have to sell to a couple so it’s essential to segment users based on their current relationship status.
It’s quite common to segment and target audience based on its average income or salary. If you’re selling expensive wristwatches, you need to ensure that people you’re targeting can actually afford them.
Create income slabs and choose what slabs you need to target. Alternately, you can create different versions of your product (works best in the service industry) for each income group. For instance, car manufacturing companies target all income groups and have multiple variants ranging from affordable cars to expensive luxury cars.
The way how users behave or have interacted with your product, brand, or website in the past is a common segmentation technique. There are several consumer behaviors variables that are used for segmentation:
- Activity level
- Purchasing behavior
- Customer lifecycle stage
- Occasional or seasonal buyers
Create different segments for laser targeting and personalizing customer’s interaction with your store.
This is how Crocs persuades customers for a repeat purchase.
And this is how Blue Apron sends a re-engagement email with a discount to generate a sale.
Here is a perfect email that Urban Outfitters sends to inactive users for re-engagement.
The thing is: You need to monitor user and customer behavior, segment them appropriately, and send personalized products.
This type of segmentation groups users based on their interests, attitudes, lifestyles, social status, opinions, and personality traits.
The common variables you can use for psychographic segmentation include:
- Activities and interests
- Social status
- Personality traits
- Values and attitudes
Segmenting users based on psychographic variables is a bit challenging and isn’t as easy as segmenting for demographics. You need to collect data (surveys and interviews) from your ideal customers to better understand them.
You cannot figure out the interests and opinions of your customers without getting feedback from them.
This is how Amazon collects relevant data from customers for personalization.
Poo Pourri sends this interesting email to its customers to find their interests.
Customers are segmented based on what product they click and will start receiving similar product recommendations in the future.
Geographic is a demographic variable but it is discussed separately due to its high importance.
Segmenting users on the basis of their location is one of the best ways to improve conversions, targeting, and personalization.
Litmus sent highly targeted emails to promote its conference in Boston, London, and San Francisco. The campaign achieved a whopping 68% open rate.
Because users received personalized emails based on their current location.
Geographic segmentation can take several forms and you can use it to send highly customized emails and products to your customers.
Here is an example by Brooks Running Company that targeted users based on the weather in their location. This targeted email campaign had a conversion rate of 61%.
When users are segmented on their location, you can dig deep to identify several variables including:
- Local holidays
- Local influencers and celebrities
And so on…
Sales Funnel Stage
It’s related to behavior segmentation where you segment users on their current stage in the sales funnel.
There are three main sales funnel segmentation variables:
- Top of the funnel
- Middle of the funnel
- Bottom of the funnel
People who are at the top of the funnel have different preferences and interests as opposed to someone who has moved to the bottom.
It is essential to segment your audience based on its stage in the funnel so as to serve it relevant content and products. For instance, people at the top are interested in awareness content like eBooks, whitepapers, educational content, and how-to content.
Segmenting audience for your ecommerce store is the best way to move forward. You can serve your ideal customers with relevant content and products – and this is what your audience needs.
All you need is an email marketing software and integrate it into your CRM. Rest is easy. Define and create segments (aka lists) and the remaining process is fairly automated.
Data collection is the hard part though.
But when you’re offering a personalized experience to your customers, they will happily share any details with you.