In my ecommerce blog series, so far, we have touched upon ecommerce structure and elements which helps in initial steps for digital commerce; now it’s time to get your e-commerce to the Next Level!!!
ECommerce is a global store for businesses, it brings a large variety of customers, and because of wide customer range ecommerce requires customer segmentation.
There are two main reasons to apply customer segmentation:
- Customers could have specific need based on their demographics and the nature of the business
- Sales and Marketing team could have specific strategies for customers based on their activities on the website like first time visitor, repeat purchase, high order value and many more.
Customer segmentation is all about understanding your customers and communicating with them accordingly. It’s a feature of clustering customers so that they get the specific message and retrieve product information quickly which results in increased sales and customer retention.
There are several ways of slicing and dicing your customer base including:
- Demographic segmentation based on Gender, Age and Location
- Customer life cycle segmentation based on the last activity, frequency, Lifetime value.
- Product affinity based on product and category viewed and purchased
Some good examples of Customer segmentation:
- By location
- By Gender and Age
- Top revenue account
- Welcome series communication
- Browse abandonment campaigns
- Post-purchase campaigns
- Offer and promotion
Some of the key benefits that customer segmentation brings to ecommerce:
- Customers are more likely to buy from you when products, offering, and services are relevant to their circumstances and interests which increases conversion rates.
- Acquiring new customers is costlier than retaining the ones you already have – focusing on increasing the lifetime value of each customer as much as possible by providing them specific offerings, promotions based on their previous purchases, new offers matching their business need, discounts, relevant marketing messages.
- Better match of your products or services offering to your customers need by creating tailor-made marketing initiatives.
- Businesses can use customer segmentation to identify what does work but more importantly what doesn’t work and alter accordingly
With over 80% of global consumers trying online shopping at least once, the greatest opportunity for ecommerce companies is to build a long-lasting and profitable relationship with this already existing audience. Such a strong relationship requires an utmost focus on the customer as a whole. Customer segmentation helps in building a strong relationship with customers. It helps you send the right message to the right person at the right time. While selecting an ecommerce platform, one should consider customer segmentation element as a required feature.