6 Simple eCommerce Customer Segmentation Strategies to Increase Sales

In the contemporary age, why one-size-fits-all marketing is not a good choice?

The audience tends to respond better and be of enormous value to your store when they think their needs and interests are being specifically addressed.

Customer expectations are at an all-time high and sometimes it’s difficult for companies to meet.

Lately, 62% of companies now invest to meet the changing needs of customers.

But what is the change that can help you understand your customer expectations?

It is Customer segmentation

Hearing it the first time or heard but never gave a thought on it?

Sometimes eCommerce store owners fail to target the desired customers, and one of the reasons is there is no proper segmentation of existing customers in their data. 

Most of the owners stand with the assumption that bulk marketing will generate more sales and customers. However, it is an expensive, time-consuming, and ineffective technique to market with a large customer base at a time. 

So rather use the concepts of customer segmentation and target the relevant customer in the digital sphere.

So what exactly is Customer Segmentation?

Customer Segmentation is the procedure of splitting your large audience into different groups based on several categories such as demographics, lifestyle, and most importantly their physiographic behavior. eCommerce stores can make the best use of this theory to implement it while targeting the audience.

Why is Customer Segmentation a must?

Now let’s look at the significant positive outcomes after having a good customer segmentation  

  • More customer retention – This can bring you a large number of returning customers.
  • Improves your rank in the competitive market – It makes your business stand above your competitors.
  • Builds brand identity – Your brand gets well recognized.
  • Better customer relationships – You develop a strong relationship with your customers by giving them what they desire.
  • Heads to price optimization – You use your resources to the fullest by targeting the right segment.
  • Economies of scale – You can sell your products at the lowest potential cost and maintain your business scalability.
  • Develops a channel of distribution – Proper segmentation of your market will direct you to effective targeting.

Customer Segmentation Strategies to Increase Your Sales 

As a store owner, if you discover the accurate way of implementing and executing your strategies then only you can see the impact of benefits on your eCommerce business. 

To accomplish your goals you must have clarity about important strategies and should also know how to use it correctly to experience the positive outcomes of it.

Consider the following 6 strategies to drive your sales higher.

1. Segment Your Customers Based on Their Past Purchase Behavior

customer behavior analysis

To begin with, you must track and target your existing customers as to when your existing customers are content, the chances are they will buy from you again.

As we know, enticing existing customers is far more cost-effective than it is to acquire a new customer. 

Thus, your existing customers are your most important segment of all.

Initially, you can track your visitors with a discreet checkout chatbot that will automatically assign a tag to each visitor who completes the checkout process. 

Such visitors will be maintained in your database along with the tag.

When the customer places their order, they are generally redirected to the “thank you for buying with us” page. 

Here, you can determine the URL of the page in the trigger, and add the tag name.

You can name this segment however you want, but keep it precise, e.g. “Checkout complete” or “New Purchase” 

You can segment based on their purchase behavior such as Loyal Buyer, Purchased (item category), purchased multiple items, High-end buyer, Purchased on Black Friday, and so on

2. Customer Segments Based on Customer Satisfaction Level

customer-satisfaction-survey-actionsIn this case, you can go for two options to achieve different results. 

You can share survey emails to your customers to review your customer support.  

Accordingly, segment customers with respect to their satisfaction level. 

a. Create a separate segment for satisfied customers

You can check if the satisfaction level and the conversion rate are correlated. For this when a customer makes a purchase, track the connection between their happiness and their Repeat Purchase Rate.

The formula for the same:

The number of customers who made more than one purchase / Number of customers who made at least one purchase.

b. Create a segment of your unsatisfied customers 

Do you know the Pareto principle?

It can be the best fit here.

20% of unsatisfied, unhappy, and furious customers will produce 80% of your negative reviews and comments.

How to address this situation?

You can add tags to your unsatisfied customers and keep a track of your bad ratings

After that, get ready to perform. 

Initiate personalized emails, discounts, and chatbot messages to make up for the poor customer experience your customers might have had.  

You can also build a bot that will send you a notification whenever an unsatisfied customer revisits your page. This will give you an opportunity to capture them personally and make things correct for them.

Once you start customer segmentation based on the quality of your customer service, you’ll realize where you stand in the customer experience and improve it for better customer satisfaction.

3. Create Segments Based on Product Browsing History

product-browsing-history

Another variety of online behavior that can be tracked is Product Browsing. You can track what your customers viewed in the following ways:

a. Automatically with the use of a chatbot

Establish a bot that will tag your customers with specific customer property whenever they visit certain pages. Such as, If there is a visitor who views a page with red shoes, your bot will tag them with “red_shoes” or something relevant.

b. Manually with live chat Viewed Pages feature

In this, you can view what pages your every visitor browsed, then add a tag to them instantly.

When you are done, it’s time to target your segment(s) with a personalized email campaign. 

In this email, you can share special offers, product recommendations, and many others.

Else, if you like to act while the visitors are still at your store, set up a chatbot to suggest relevant products to a given segment. It will allow you to prioritize your marketing endeavors and promote the most popular products.

4. Treat Returning Visitors as a Separate Customer Segment That Demands Special Attention

returning-visitors

Any guesses why returning customers are so important? 

Because your store already has their attention.

Unlike new visitors, they have already visited your store before and know your goods and costs. 

Another fact could be that they have already reviewed their options with other stores and they are still more willing to place an order with you. 

So you need to segment your returning customers to increase the possibilities to market your business to them and convert them into loyal customers successfully.

Always remember, customer experience will influence whether your visitors will stay on your website longer or will leave it again.

5. Customer Segment Based on Cart Abandonment

cart-abandonment

Unlike new visitors, we know that returning visitors have higher conversion rates.

However, there is no assurance that each visitor (returning or the new one) will actually place an order. 

So to see between the “Add-To-Cart” and the “Purchase Made” stages? 

The answer is Cart abandonment.

Do you know what your cart abandonment for your store rate is? No? Check this below formula for the same 

To calculate the rate, you will first need a formula for cart abandonment rate (AR):

100% – (Conversion Rate ÷ Add to Cart Rate) = Cart Abandonment Rate

100% = all transactions initiated

70 percent of new shoppers abandon their shopping carts

In addition, almost 80 percent of returning visitors with previous browsing history abandon shopping carts as well

With these stats, you can observe that the stakes are really high and you should absolutely focus on the segment with the visitors who abandon their carts.

You can add two chatbots to your store that will apply custom tags such as “Item added to cart” and “Purchase made” to the visitors on their respective shopping stages. Then, go to the Contacts list and filter your visitors by marking the values:

  • Contains: “Add-To-Cart” 
  • Does not contain: “Purchase Made”

6. Calculate CAC and Conversion Rate for Different Customer Segments Based on Demographics and Location

When you plan to create any segment, it’s necessary to have a specific goal in mind. Exclusively doing it for customer segmentation is of no point 

To take complete leverage from the customer segmentation you should combine market segmentation criteria with various customer data, such as CAC (Customer Acquisition Cost), CLV (Customer Lifetime Value), Conversion Rate, Add-to-Cart Rate, and with many other eCommerce/marketing metrics.

Also to segment your customers by nation or region, go to the Contacts list, filter the contacts according to the same, and create individual segments for each region you have on the list.

Final Thoughts 

With 4 out of 5 businesses competing primarily on customer experience, you should take customer experience seriously to stand out from the noise and gain loyal customers.

Now to offer an optimal experience to them, you must know your customers and their behavior patterns better than ever before.

Once you know them well enough, you can leverage it to personalize every interaction. Customers these days have more power and alternatives than ever before. Therefore, you are accountable for understanding and acknowledging their needs.

Customer segmentation helps to create more focused strategies that can lead to higher customer retention, visitor conversion, and customer experience.

If you are looking for a platform that can help you with customer segmentation and analytics, then Try Audiencefy to grow Shopify sales and exponentially increase revenue today.

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