The e-commerce world is quite large and interesting. To succeed, you need to focus on many things that interact with each other. Running your online store, you should always keep an eye on the ball – new ad formats, technology innovations, and fashion for specific goods. These are just a few of the major factors. One of the tasks where good performance will undoubtedly affect the success of our online business is customer segmentation. Find out what lies behind this slogan and what it means for the functioning of the webshop.
What does customer segmentation mean?
Customer segmentation is a constant analysis of consumer behavior, needs, and expectations and grouping them by the above-mentioned aspects. Splitting users into groups with specific preferences aims to adjust the store’s business strategy to the right people. Through segmentation, you will find the perfect recipients and users for your products. Therefore, you have a chance to improve your offer and modify it, following the constantly changing consumer behavior. Customer groups are typically defined by demographic or geographic information, but mostly by behavioral differences. Correctly executed customer segmentation will allow you to create a satisfying marketing message and, as a result, increase the conversion rate. Would you like to see other benefits? Here we go with more advantages!
What is the value of customer segmentation?
The list of advantages of performing this process correctly may be very long! We will focus on the most important aspects (from both sides: the store and the consumer).
- Well-executed customer segmentation provides benefits to each party. The store does not waste the budget or carry out advertising experiments. Respects the customer’s behavior as well as his preferences and expectations. As a consequence, the marketing message finds fertile ground. On the other hand, the consumer receives messages adapted to his needs, without annoying, and inappropriate advertisements or offers.
- Customer segmentation results in… savings! There is no need to spend money on experiments to find the right target group. We already know who we are dealing with and what he is like. Furthermore, the message we send is consistent with our brand, which creates a positive brand identity. Thus, we aim precisely where we want to strike.
- These measures protect against creating a negative image of the company in the eyes of people who are not our current target group. We do not torment them with inappropriate messages nor put them off in the future.
- Do you want to develop a marketing strategy that works for your store? Segment your customers! You get more trust that clients will behave predictably in the future.
- This process will also help determine which pricing strategy may prove to be the best, given the needs and expectations of customers interested in your products.
How to group your clients?
To segment clients properly, we need to ask ourselves several questions. The answers will enable us to discover new horizons and possibilities. We are not able to act properly and define marketing activities or operational strategies without learning about our clients. That is why customer segmentation is so important. Some of the questions are listed below, broken down into specific areas:
- Where does the client come from?
- Is it a small town, a village, or a big city?
- In which country is he staying?
- Marital status
- What is the customer’s journey on our website?
- What does the client choose or consider most often?
- How did he find our store?
- Which products, categories, or subcategories draw the most attention?
- What keywords does he enter in the search engine?
- How many items did he previously purchase from the store?
- Did he use any promotional codes, discounts, or participate in any store loyalty programs?
- How much money does he spend at one time on shopping?
- How often does he come back to view the site or make subsequent purchases?
Collecting such data will let us get to know and understand the activities of consumers in the target group of the online store. This way, you will find what type of persona brings you the greatest profit, and what drives them to make decisions. As a result, you can adjust all activities to the expectations of such customers.
Proper segmentation of your store’s customers is the key to success! Analyze the characteristics and behaviors of consumers, group potential clients, and adapt the advertising messages and the products to their needs! This way, each party will benefit – an online store that can calmly and rationally plan its activities, and a customer receiving only interesting messages.
Miłosz manages sales at Brandly360. For many years works on projects involving the implementation of software for businesses. On a daily basis, he works with trading companies, providing tools and services that improve work and follow the most recent market trends. Driven by a passion for data analysis, modern management systems, and process improvement.