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    Home » Importance of Customer Segmentation in E-commerce
    Digital Marketing

    Importance of Customer Segmentation in E-commerce

    Alexander LoganBy Alexander LoganJanuary 14, 2022No Comments5 Mins Read
    customer-segmentation-for-ecommerce

    As an online business, knowing your audience roughly translates into knowing how to survive in the eCommerce market. Customer segmentation helps in grouping customers based on relevancies, common attributes, demographics, and more. The categorization helps businesses to identify specific patterns, and shared traits, which can then be used for targeted advertising. But before all that, it is important to capture the right data for customer segmentation. Having the right data helps to track individual events and actions, and set up specific triggers to better personalise the experience.

    Customer Segmentation Answers Questions About Your Buyers:

    In the eCommerce market, growth relies on offering customer-focused products and analytically leveraged insight, either one is incomplete without the other. Knowing your segments helps in answering typical questions about your customers, and mapping out an advertising plan for each niche. For example, customer segmentation can answer:

    • What is the age, gender, and location of my customer?
    • What are the common browsing habits and interests of each niche?
    • Which device do they visit our platform with?
    • Where do our customers find us from, and how long do they stay?
    • How frequently do they spend money at our e-store?
    • What are the common characteristics of shoppers that abandon their carts?

    Combining customer-related insights with behavioural data empowers businesses to understand who, why, and when to buy from them, and use that information to their advantage. It enables your business to deliver personalised experiences, and revamp your products to better survive and thrive in the market.

    Customer Segmentation Helps Define Your Customers:

    Customer segmentation is a derivative of intensive market research, it records the needs, ideas, and interests of the customers. As a business, you can offer your services directly to the customer via the B2C model, or offer your services to another business, i.e., B2B. Depending on the foundation of your business the type of data collection and categorization would slightly differ.

    Segmenting for B2C:

    For a B2C model, you would be reviewing data according to the demographics of your customers, their motivation, values, activity level, lifestyle, media usage, devices, browsing time, etc. Similarly, you will profile where your customers come from, and how you need to better advertise to reach them.

    Segmenting for B2B:

    If your customers are a business, you will be collecting information regarding industry, company size, locations, most purchased products, order volume, company structure, philosophy, turnover, and more. Company profiling can help your business avail different opportunities, and create different packages accordingly.

    Identify Different Types/Segments and Profile of Buyers:

    Additionally, you can profile your customer segments into 5 different categories based on their interests, perceptions, buying behaviour, and intentions. Below mentioned are some common segmentation models for an eCommerce business.

    The Goal Oriented Buyers List:

    The customer segment that knows what they want, and makes a purchase as well are the ones that fall into this category. These customers already know which features they are looking for, and what benefits they need with respect to a specified price range. After profiling these customers, your business needs to clearly communicate your unique selling proposition, make the product accessible, and clearly communicate its price, and features.

    The New Customers List:

    Starting the connection with your customers on the right foot is equally important as retaining your old user base. Make sure that your new customers find your brand authentic and reliable, and are eager to make their first purchase. Enrol your customers in a welcome campaign, give them testers and small gifts along with their product to encourage them to get familiar with your brand.

    The Returning Buyers List:

    You need to identify which customers are bringing you the most revenue, and offer them more value to encourage them to spend more. By adding a trigger that automatically categorises customers after they spend a certain amount on your site, you can create a VIP list. Tap these customers with specific loyalty offers, or spend more to win more campaigns. Give these users an incentive to purchase your products more with offers and discounts.

    The Inactive Buyers List:

    In the eCommerce market, it is common knowledge that nurturing your existing customers is more valuable than spending money on getting new customers. Don’t let existing customers forget about your brand, rather automatically enrol them in an inactive customer list that offers gifts to returning customers. Create a win-back campaign and offer promotions that encourage the buyers to re engage with your brand.

    The Lead Nurturing List:

    Just because some customers haven’t bought your product yet, doesn’t mean they never will. It is important to add them in the lead nurturing list to constantly engage with them, and encourage them to convert into paying traffic. After all, many customers need to be reminded about the value proposition, the significance, and discount offers to take advantage of the promotion. Adding them into a separate category helps to create customer offerings.

     

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    Alexander Logan
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    Alexander is a professional blogger and journalist, who frequently writes about business, finance, law, and technology to help people understand and know everything happening around them.

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