Using customer segmentation, brands can provide a personalized shopping experience to their customers. Around 63% of customers expect brands to provide personalization as a standard of service said Business 2 Community and around 74% of customers get frustrated when websites provide unrelated content, promotions, offers, etc.
Seeing the demand for personalization, many brands have started to address the expectations of their customers. They are sending batch-and-blast emails to make effort towards personalizing their customers’ experience. Sending timely and relevant messages to tailor your communication as per customer behavior can help boost your email marketing revenue exponentially.
And customer segmentation is the key to yield significantly higher revenues even up to ten or twenty times. With this article, we want to present simple customer segments every retailer must use. So, without further ado, let’s dive into customer segmentation strategies.
Simple Customer Segments Every Retailer Must Use
Through our extensive research, we have come up with customer segmentation that companies can use for both one-off and automated campaigns. This means your retail online business will make money while communicating without you lifting a finger.
1. First-Time Purchasers:
First-time purchasers are one of the essential segments every online retailer has. All of your customers must be first-timers at one point. But to convert them into your loyal customers, online retailers need to put in extra effort and nurturing. And to achieve that, post-purchasing messages play a significant role.
Also read: What is Customer Acquisition & How to acquire more Customers?
One report suggests that post-purchase emails perform better than promo emails. A simple post-purchase email, on average, can lift your conversion rate by 217.5%. So, you must segment first-timers and implement this strategy into your email marketing campaigns to boost their morale and make them your loyal customers.
You can set up and prepare workflow for three to four emails that are automated to send when someone makes their first-time purchases. But the question is what to convey in your post-purchase emails?
Here’re few messages to include in your post-purchase email marketing campaigns for first-time customer group:
- Welcome them in your family with a message, “We Thank You for Placing Order with Us and Want to Welcome You to Our Family!”
- Best time to introduce your loyalty program.
- Also, introduce and invite them to your online community and ask them a favor to share their feedback on these communities.
- Ask them to leave a review after they have made a purchase and received the order. This works best if you send it over an SMS. This will make them review your product more actively. Also, you can offer a discount on their 2nd purchase in return for reviewing the product they purchased.
- Share a blog post or a page detailing tips, dos, and don’ts on how to use the product in a better way.
- Include friendly product recommendations that are relevant to the product ordered.
You can always look for other ways to improve the experience of your first-time customers. The data like age, gender, etc. can help you deliver a more personalized experience to this customer segment.
2. Loyal Customers:
As per one report by Invespcro, acquiring new customers cost five times more than retaining your existing customers. Once you have retained your customer and made them loyal followers of your brand, you don’t have to spend any recurring costs of acquisition. You’ll get to enjoy only revenue out of them.
However, how you treat your loyal customer over time matters for your online brand. Make them feel valued and appreciated so that they don’t become a lapsed buyers. First, identify who they are and how long they have been purchasing from your online retail store. Knowing your customer better will help you to improve your relationship with them.
Analyze the past data of your repeat customers. How often they make purchases? When they become a loyal customer? After which purchase they became a lapsed customers? Collecting such data will be helpful for you to better serve your loyal customers.
Take note of the following points how you can use this customer segment:
- Prepare and send them one-off promotional offers and campaigns allowing them early access to special deals and discounts to make them feel valued and special.
- Retailers can go the extra mile to offer something valuable for being loyal to them and express gratitude with a gift or loyalty discount.
The goal of this communication is to delight customers with a surprise that makes them feel more connected with your brand and stay loyal to you.
To top it off, you can create a segment for people who have been shopping from your online store for few years and have placed over 15 orders. To delight customers in this segment, you can be unique in your offerings e.g. including a hand-written note or a piece of company swag with a delivery package.
3. Customers with High/Low Average Order Value:
Identify and segment customers based on their average spending limit. Many of your customers will have high average order value (AOV) and others will have low average order value. Segment such customers by filtering them by sales, AOV, or customer lifetime value. Form a high AOV group for customers spending above-average order value and a low AOV group for customers spending lower than average order value.
Take a look at our Customer Specific Product & Price Extension for Magento 2
To narrow down the high spenders, even more, form a group with a much greater AOV to enable them with more exclusive rewards. Now, you can utilize such segments for different email marketing scenarios.
Here’re ways to market customers in different groups:
- What you can do for customers in the low AOV group is to offer them a discount coupon or free shipping that encourages them to spend even more than what they usually do.
- Offer express shipping, exclusive rewards, personalized content, free gift wrapping, value packs and bundles, and many more things for customers in high AOV group. You must treat your loyal and higher spenders with warmness to make them feel they are a valuable asset for your business.
4. Lapsed Customers:
We already discussed that loyal customers are highly valuable but what’s more critical is to know when they are about to lapse. This will help you to come up with ways to make them re-engage with your brand and increase customer lifetime value (CLV). One best way to do so is by creating lapse-automation campaigns that will be triggered when customers haven’t purchased within a certain period.
Differentiate your campaigns for customers who have lapsed after first-time purchase and customers who lapsed after ordering several times from you. Ask lapsed first-timers how their experience with your brand was? And how was the product? You can offer up incentive or discount for their next purchase with you.
Checkout our Shipping and Payment Method per Customer Group Extension
For customers who lapsed after ordering several times, you must tailor your messaging based on the data you have about them. Send them product recommendations based on the past product search and purchase history. Here, you can also try out offering some incentives to make them engage with your brand again.
5. Unengaged Subscribers:
No matter how much extra effort you put in to make your customers and email subscribers engage and retain, some of them won’t budge and will be labeled as unengaged. You’ll come across 2 to 3% or more of such subscribers per month.
What you can do is identify them and try a little hard to make them re-engage or remove them from your subscribers’ list. The reason behind them being unengaged with your brand emails is either they don’t fit into your buyer’s persona or they are not interested in products you are selling.
Once you have decided what to do with your unengaged subscribers, you can either run re-engagement campaigns or be done with it. Send them an email saying “Last Chance to Hear from Us.”
Segmenting your customers for personalizing their experience may sound like an advanced way of doing your email marketing. However, by creating easy to manage customer segments, you can effectively deliver personalized messaging through emails. Not only that but you can also implement automated campaigns targeted to increase your AOV, CLV, and customer loyalty as well.
Need help with your online retail business? Mconnect Media can help you resolve all your online business-related problems and provide you gilt-edged solutions that match your bespoke expectations. So, what are you waiting for? Contact us to kickstart your project right now.