People operating on the e-commerce market know very well that customers display diverse shopping behavior. They have different needs and expectations both for the product they buy and for the online store itself. If we take the time to determine the profile of our model customer and analyze the data on consumers who bring us the most profit, we can effectively increase sales and refine our offer.
Audience segmentation – what is it?
Customer segmentation is based on an analysis of consumer behavior and specifying the characteristics of customers who generate the most profit. It allows you to divide customers into groups with similar tastes and consumer behavior, to which you can most effectively adjust your business strategy.
Segmentation also makes it possible to find those customers to whom our products will suit them best. Further adjustment of offers to consumer needs will result in higher conversion.
Audience segmentation – why is it worth using?
First of all, it is worth noting that customer segmentation is beneficial for both parties of the transaction:
- manufacturer/seller – finds potential customers and gains information that can be used to increase sales
- customer – browsed by him offers are well personalized, giving the impression of “tailor-made”.
Of course, there are more reasons why you should implement this solution in your e-store:
- Using information about existing buyers is cheaper than trying to attract entirely new customers.
- By reaching a specific group of recipients, we can create or strengthen the desired image. Too wide group of recipients blurs our message, which makes it harder for consumers to identify with the brand, which is especially important when we want to gain a loyal customer.
- By finding out who our model customer is, we have a solid foundation for creating further promotional strategies and product sales. Sometimes this information leads to surprising (at least at first glance) conclusions. For example: from the website projektdzisiaj.pl we can find out that buying toys is not only interested in people who have children. Almost half of buyers are people without children who buy gifts.
- Trying to reach certain groups is a waste of time and money, because people belonging to them either will not be interested in our product, or will not be willing to buy it in the form proposed by us. For example, if you sell luxury watches, trying to reach customers with high price sensitivity misses the point. Similarly, the opposite is true: people willing to spend a lot of money on a high quality watch will not be interested in a more budget product.
- Segmentation naturally increases our brand recognition among the customers we are interested in.
How do you segment your customers?
For segmentation to be most effective, you must first establish criteria for dividing consumers and ask yourself a few questions:
- Who is our customer?
- What activities does he/she perform on our site?
- What are their buying preferences?
It’s worth collecting all the information that will tell us how Internet users become our customers, and what kind of shopping behavior our existing buyers have. Examples of questions that can help us include:
- What is the client’s gender and age? Where does he/she live?
- How did the customer get to our e-shop?
- What passwords did he/she enter in the browser and in our e-shop?
- What categories and products did he/she browse?
- What products did the customer purchase?
- How much did they buy and how much did they spend on them?
- Did the customer buy only once or did he/she come back regularly?
After gathering all the information, we should analyze it thoroughly and find the most important regularities. Find out which customers bring us the most profit and are willing to return to our store. Customers with similar tastes, habits and shopping behavior should be grouped and divided into segments.
Once we’ve isolated the various most profitable groups and identified their needs, we can move on to planning a strategy for reaching each of them. We will use the data we have gathered to create personalized content. Such which will be best suited to the segments we have identified.
Based on the specific characteristics and behaviors of the selected target group, we can choose the optimal method of action, such as
- reaching customers who buy frequently and cheaply
- reaching customers who are willing to choose complementary products
- offering products to clients who are inclined to make less frequent, bigger purchases from a given category
There are many ways to target our message to the consumers we are interested in. For example, we can use newsletters, banners, personalized exposure of offers, notifications and pop-ups, or re-marketing. There are no major limitations here. The better we match our offers to our model customers, the better. The condition is a properly conducted segmentation that will provide us with a data base to use in future actions.