Resources

Customer Segmentation
Has Changed for the Better

Introduction

Consumers are far more likely to buy from a brand that recognizes them by name, recommends options based on past purchases, and remembers their purchase history, according to research from Accenture.

But if you’re sending out the same message to everyone regardless of their shopping history or personal preferences, customers won’t feel that you understand them at all. That’s why customer segmentation is necessary to show your customers you get them, want to help them, and will treat them as individuals.

The concept of customer segmentation is not new — marketers have been doing it for years and years. But traditionally, segmentation is based on simple demographic information, such as location, gender, and age. With advances in technology today, you can get far more granular with your segmentation and approach closer to one-to-one marketing.

Now, it’s about more than sending customers a basic email that offers a few product suggestions. It can be as multi-channel and multi-faceted as the rest of your marketing. You can segment by a variety of customer behaviors, and then push those segments to multiple platforms, including:

However, if you want to effectively segment your customers, you need to know exactly who they are and what they are interested in, at as granular a level as possible. Once you understand your audience, only then can you engage with them on the right channel, at the right time, with the exact message they need.

How Has Customer Segmentation Changed?

Customer segmentation simply means dividing your customers into groups based on characteristics or past behavior. Traditionally, marketers used basic demographic or geographic criteria to segment their customers into large groups.  But today, customer segmentation is driven by the increasing depth of customer data marketers no can access. 

Today’s marketers can truly personalize communications by using in-depth behavioral data. The segments you choose to use depend on your industry and products, but here are a few examples that you can use:

  • Customers who have opened an email in the past week
  • Shoppers who have viewed specific product detail pages on your site
  • Buyers who haven’t engaged across any channel in 30 days
  • One-time customers who haven’t made a second purchase yet

In order to create these in-depth segments, you first have to collect all the relevant data on your customers. Then, you need to unify that data from all of the different systems – marketing automation, ecommerce platforms, social media, and more – into one centralized location like a B2C CRM.

This single source of truth is your starting point for segmenting your customers more accurately and effectively. You need user resolution technology to be able to stitch together all their behavior on your site under one ID. This allows you to understand who your customers are and exactly how they have interacted with your brand historically.

Say a customer browsed the same product pages a few times anonymously, then one day they come to your site and sign up for your email newsletter. Once you have their email, you can unify all their historical interactions under that known buyer ID. With that data, you can more accurately segment them and send relevant triggered messages that are completely tailored to the products they’re most interested in.

Get Dynamic Segmentation

While customer segmentation based on customer behavior is incredibly powerful, that behavior constantly changes. Hence, segmentation is not a one-time thing. You don’t just segment your marketing list based on historical data and then sit back.

Instead, you have to dynamically segment your customers using real-time data based on what they do on your site today and tomorrow. With dynamic segmentation, you don’t have to constantly create new segments when customer data changes or you want to send out a new marketing campaign.

With dynamic customer segmentation, buyers are automatically added and removed from segments based on their behavior. For example, if they make a purchase, they are automatically added to the new buyer segment. If a customer hasn’t made a purchase within your defined timeframe then they are added to your at-risk segment and sent an email to re-engage them.

Customer Lifecycle

Here you can see a view of segmentation of your buyers by lifecycle stage, so you can automate triggered messages to customers based on their stage in the buyer’s journey. This approach ensures you take appropriate, targeted actions based on accurate, up-to-date information. It also saves you time so you don’t have to constantly update your segments manually.

Segment Across Platforms and Channels

Most marketers often restrict customer segmentation to emails alone, but you can apply these dynamic segments to other channels just as effectively. Dynamic segmentation can make your paid acquisition campaigns extremely effective, for example. Given that the cost of acquiring new customers has increased by more than 50%, you need to leverage the data you’ve already collected to drive higher-value purchases.

How do you achieve this? You can use segment sync to create a Lookalike Audience for targeted ads on Facebook, Instagram, or Google. By reaching a targeted list of shoppers with ads that have the right personalized message for exactly that group, you can not only boost the ROI of your paid acquisition strategy, but also improve the customer experience.

A great example of this is this Google retargeting ad from makeup brand, Glossier. Rather than just putting out a generic ad to everyone, they used a cart abandonment segment to entice shoppers to return and make their purchase of specific products left in the cart, along with other personalized product recommendations.

In addition to segment sync campaigns, you can also send opted-in buyers a browser push notification next time they visit your site with a coupon for that product. Similarly, you can use SMS marketing to send messages to specific segments of your buyers via text. This personalized approach ensures you are serving your customers the right content in the right channel at exactly the right time, which can seriously help drive loyalty.

Stio Achieves Results with Lifecycle Segmentation

Creating detailed and dynamic customer segments can drive serious results for your ecommerce business. This includes:

And that’s not just theoretical. Outdoor apparel brand Stio engages customers differently based on the exact stage of their customer lifecycle today.

Data is not only available, but also dynamic and actionable. I can filter the lifecycle dashboard by different segments and apply product and category dimensions to understand affinities that I never would have been able to with other platforms.

Mike Swanson, Lifecycle Marketing Manager, Stio

Instead of mass marketing to all customers, Stio gives different offers and messages to different segments depending on their past buying behavior and where they are in their lifecycle. They present more aggressive offers to one-time buyers and more personal touches like letters from the CEO and thank you campaigns to loyal customers.

Stio has seen massive results from segmented behavioral campaigns. These campaigns make up just two percent of Stio’s email volume, but they drive 42 percent of their overall email revenue. And the revenue per send of behavioral campaigns is 28X that of promotional campaigns.

Next Steps: Invest in a B2C CRM

A B2C CRM provides the foundation to help you to create detailed and dynamic segments to enable you to get better ROI from your marketing campaigns.

This technology can help you with your segmentation and paid acquisition programs by:

  • Collecting and integrating data from different channels and platforms
  • Automatically adding and removing shoppers from segments
  • Filtering and reporting data so you can identify your most valuable customer segments and optimize accordingly
  • Calculating the most effective path to customer acquisition

Further Resources

Now that you understand the basics of customer segmentation, here’s even more:

Dynamic Customer Segmentation is a Creative Marketer’s Best Friend

By ingesting the right customer data, dynamic segments grow and shrink as your customers move in and out of the segments — automatically triggering the right campaigns at the right time. Sound better than traditional email segments? That’s because they are.

The Power of Super Specific Customer Segmentation

Find out more about how having the right data behind your B2C marketing can help you create detailed and dynamic segments and drive far better results for your ecommerce business.

Elevate Your Paid Acquisition Campaigns with Segmentation

Learn how to combine segmentation and paid ads to create high-value acquisition campaigns that are tailored to your target audience and drive serious ROI.

What is a B2C CRM?

We’ve created this detailed guide to help you understand exactly what a B2C CRM is (and isn’t), how it differs from a B2B CRM, and how it can help power up your marketing campaigns, drive customer loyalty, and improve ROI.

Want Even More?

Learn how the Zaius B2C CRM helps you to achieve dynamic customer segmentation for your brand.