How Customer Segmentation Can Enrich Your Shopify Ecommerce Sales
What exactly is customer segmentation in ecommerce? Simply put, it's the
process of dividing your customers into groups and cohorts based on
shared characteristics, such as demographics, behaviors, and
preferences. By doing so, you can tailor DTC ecommerce marketing efforts
to each segment's unique needs and desires, ultimately leading to
greater satisfaction and loyalty.
It allows you to identify your most valuable customers and focus your
efforts on retaining them. Additionally, by gaining a deeper
understanding of your customers, you can craft more targeted marketing
campaigns and create personalized experiences that resonate with them on
a deeper level.
Let's explore some benefits, best practices, and examples of successful
customer segmentation for Shopify stores, and see how you can implement
these strategies for your own business.
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Benefits of Customer Segmentation for Ecommerce Businesses
As an ecommerce business, your customers are the lifeblood of your
success. That's why it's so important to understand their behavior and
preferences, and this is where Shopify Customer Segmentation comes in.
By segmenting your customer base, you can gain valuable insights into
their interests and needs and use this information to improve their
overall experience with your brand.
One of the key benefits of customer segmentation is that it can lead to
an improved customer experience. By tailoring your messaging and
offerings to specific customer groups, you can ensure they receive
relevant, personalized communications that resonate with them. This can
lead to increased customer satisfaction and loyalty, ultimately driving
revenue growth.
Customer segmentation can also help you to retain more customers over
the long term. By identifying the customers who are most likely to
churn, you can take proactive steps to keep them engaged and invested in
your brand. This might involve sending targeted offers, providing
personalized recommendations, or engaging with them more frequently to
build a stronger relationship.
It can also help you to create more effective marketing campaigns. By
understanding the different segments within your customer base, you can
tailor your messaging and promotions to specific groups, increasing the
likelihood of a positive response.
Best Practices for Shopify Customer Segmentation
Customer segmentation can be a powerful tool to help ecommerce
businesses enrich sales and improve customer satisfaction. According to
Klaviyo
, a highly segmented audience can return 3x the revenue of an
unsegmented audience, with half the unsubscribe rate to boot. So, how do
you create a highly segmented list?
Klaviyo recommends targeting 5% or less of your total customer base and
defining the segment by two or more conditions, such as location and
gender, along with specific recipient behavior. But the question is, how
do you segment your entire customer base into 20 different yet
intentional groups? This is where Fairing comes in.
Fairing's post-purchase surveys offer more than just attribution
insights. They also help you learn what customers want and how they want
to be segmented. Customers want personalization, but they want it on
their own terms. So let them
self-segment
.
Collecting customer data
When it comes to best practices for segmentation, it all starts with
collecting customer data. This means gathering information such as
purchase history, demographics, and behavior on your website or app.
Post-purchase surveys, sign-up forms, and analytics tools like Google
Analytics or Shopify's built-in analytics can help you with this.
Identifying customer segments
Once you have collected customer data, you can start to identify
different segments within your customer base. This involves grouping
customers based on shared characteristics or behaviors, such as age,
location, purchasing habits, or product preferences. You can use tools
like Shopify's customer groups or third-party apps to automate this
process.
Personalizing marketing efforts
Once you have identified customer segments, you can tailor your
marketing
efforts
to better reach and engage each group. This can include targeted email
campaigns, personalized product recommendations, or customized landing
pages for different segments. By personalizing your marketing efforts,
you can improve the customer experience and drive more sales.
By following best practices for collecting customer data, identifying
segments, and personalizing marketing efforts, you can get the most out
of your Shopify customer segmentation efforts.
Examples of Successful Shopify Customer Segmentation
Now that we’ve covered the benefits and best practices for customer
segmentation on Shopify, let’s take a look at some real-world examples
of how you can successfully implement this strategy using post-purchase
survey data.
“How are you planning to use our product?”
This question is a real powerhouse when it comes to segmentation. It's
all about getting those follow-up questions in there to really get to
know your customers on a personal level. If you're selling something
like mushroom coffee, you might ask your customers if they're interested
in:
- Getting a healthier start to their day
- Trying an interesting alternative food
- Saving money by brewing at home
And just like that, you've got some valuable insight into their
preferences. Maybe you offer your Money Savers segment a sweet discount,
while your Fearless Foodies get early access to new flavors.
See, it's all about giving your customers what they want before they
even know they want it. Trust me, the reverse is a bad idea, which is
why segmentation is so important.
“Who Is This Purchase For?”
This is a great question to ask after someone's made a purchase. You can
set it up in your Fairing Question
Stream™ and ask your new customers who
they're buying your product for. Are they buying it for themselves, a
friend or family member, a co-worker or client, or someone else
entirely?
This question can give you some pretty valuable insights into your
customers' behavior. For example, if someone says they're buying it for
a friend or family member, you know they're a gift-giver. And that means
you can tailor your marketing automation workflows to suit their needs.
You can also use this information to clean up your performance metrics
and get a better idea of how your customers behave over time.
Plus, gift-givers can often have a more predictable repurchase window
than traditional customers. So, keep that in mind when you're crafting
your sales and marketing strategies.
“How would you classify yourself?”
This is a great question to ask your customers right off the bat. It's
all about testing your core assumptions and getting to know your
customers on a deeper level.
Take the example of a niche electronics brand that thought 75% of its
customers were professional users. After asking their customers to
self-segment as student, hobbyist, or professional, they learned that
only 20% of their customers were actually professionals.
Talk about a game-changer! This just goes to show that you can't always
rely on your assumptions. Sometimes, you need to ask the tough questions
to get the real answers. So, don't be afraid to dig deep and get to know
your customers on a personal level. It's the best way to build a loyal
following and keep your business thriving.
Conclusion
We've covered a lot of ground regarding customer segmentation on
Shopify, but before we say goodbye, let's do a quick recap of the
benefits and best practices we've discussed.
Customer segmentation can help you increase customer engagement, improve
your marketing efforts, and ultimately enrich your sales. By grouping
customers based on shared characteristics, you can tailor your messaging
and promotions to resonate with each group better. This can lead to more
effective communication, better customer satisfaction, and higher
conversion rates.
Regarding best practices, we've covered a few key strategies for
effective customer segmentation. First and foremost, be sure to ask the
right questions. Think carefully about what characteristics you want to
use to group customers, and design your surveys or questionnaires
accordingly. Additionally, analyze your data effectively, and use the
insights you gain to drive your marketing and sales efforts.
Remember, customer segmentation is about creating personalized
experiences that resonate with your customers. By taking the time to
understand their needs and preferences, you can build stronger
relationships, drive more sales, and ultimately achieve greater success.
If you're not already implementing customer segmentation on your Shopify
store, there's no time like the present to get
started.