How to Segment Customers: 10 Best Customer Segmentation Strategies to Get Loyal, Repeat Shoppers
If you are having trouble converting visitors on your ecommerce site, customer segmentation may be the answer. Independent brands have to elevate the shopping experience and find practical ways to compete with Amazon and other big retailers.
However, creating positive customer experiences and guiding new visitors down your marketing funnel is tough with generic, one-size-fits-all messaging. The modern shopper expects a personalized shopping experience tailored to their unique buyer profile.
The average conversion rate across all ecommerce industries was 3.65% in 2022. Using customer segmentation, you can drastically increase ecommerce sales and elevate the user shopping experience.
You can divide your audience in many ways, but some are better than others. We’ve identified the ten best ways to divide your audience and how to communicate with each segment to turn them into loyal, repeat customers.
10 Best Examples of Customer Segments:
- Age
- Gender
- Geographic
- Cart Abandonment
- Purchase History
- High Average Order Values
- Coupon Lovers and Thrifty Shoppers
- Newsletter Subscribers
- Loyal Shoppers
- First Time Shoppers
1. Age
You’d be amazed at what you’ll learn about different audiences by segmenting them by age. Each generation grew up in a unique time and developed different shopping behaviors and preferences.
Younger generations like gen Z may love splurging on trendy products they found on TikTok and prefer mobile shopping. In comparison, older generations would rather shop on desktop devices using discount codes they received in their email inboxes.
Experiment with different age-based customer segmentation strategies and give each audience a personalized shopping experience based on their collective preferences.
2. Gender
Gender is an excellent way to segment your audience, especially if you are in retail. You can quickly lower the amount of wasted marketing to audiences that don’t align with particular product recommendations.
Many brands send the same product recommendations and promotions across their audiences. If you’re selling a new line of summer dresses, you’ll probably want to target female customers.
Once you segment your audience, you can begin to test campaigns with offers to a specific gender to maximize your marketing efforts.
3. Geographic
Location is an excellent way to segment your audience because each shopper will have unique product preferences and cultural influence based on where they live. Sending promotions for surf gear to a resident in Oklahoma or giving coupons in USD to your European audience likely isn’t going to win you any new business.
Many brands waste a huge chunk of their marketing dollars on campaigns irrelevant to specific shoppers based on where they live. Once you divide your audience based on location, you can capitalize on their unique desires for better recommendations based on local trends and preferences.
4. Cart Abandonment
If you suffer from high cart abandonment on your site, you’re not alone.
The average cart abandonment rate across all industries is close to 70%. Shoppers may leave due to high shipping costs, extra fees, or a frustrating checkout experience. Once you segment your cart abandoners, you can investigate why they exited and offer enticing discounts or free shipping to encourage them to finally convert.
5. Purchase History
Your customers’ purchase history is some of the most valuable data you can use to segment your customers. Examining the products your customer has purchased in the past will help you create recommendations for similar products that align with their interest.
Include promotions of complementary accessories or even offer special deals for bundled packages. You can incentivize them to leave a review on the products they previously purchased for social proof for other shoppers and reward them with points in a loyalty program to keep them coming back.
6. High Average Order Values
Make sure to roll out the red carpet for your big spenders. Although allocating a good portion of your marketing budget to new customer acquisition is crucial, you can hit your most essential ecommerce KPIs by treating your top clients like royalty.
Make no mistake, customers with high average orders are your most valuable marketing segment. Once you filter your customers by revenue and identify the top spenders, keep them engaged with early access to new products, dedicated shopper support, special bundles, shipping deals, or push notifications with easy reorder options included.
7. Coupon Lovers and Thrifty Shoppers
Some shoppers will only hit the buy button if they have a coupon or discount code handy. Once you segment shoppers who used a coupon to make a purchase in your customer database, you can entice them with several strategies.
Send exclusive, time-sensitive coupon codes to subscribers to turn them into loyal, repeat customers. You can create custom offers based on their purchase history, so the discounts are specific to each shopper’s interests. You can also get them to help promote your brand by offering discounts for referrals to encourage your shoppers to bring new customers through your funnel. Also, make sure to target your thrifty shoppers for seasonal or holiday promotions.
8. Newsletter Subscribers
Keep a close eye on your newsletter subscribers. They signed up because they wanted to stay up-to-date on your latest promotions and products. Give your subscribers what they want and develop valuable editorials that inform them of the value of your products, and make sure to mix in some content purely to keep them entertained.
Include special offers based on specific segments, such as a free gift if they make a purchase. As you segment your audience further based on a rule-based criterion, you can deliver dynamic content that is highly specific to each shopper to increase conversions.
9. Loyal Shoppers
Loyal shoppers bring in steady revenue for your business and frequently shop in your store. You don’t need to shell out a bunch of money on marketing to keep them engaged, and they are brand enthusiasts. Don’t neglect them!
Once you segment your loyal shoppers, get them to join your loyalty or rewards program. Give them exclusive access to new products or even pick their brains on what products or features they want. Incentivize them to leave reviews or refer new customers with great coupon offers, loyalty points, shipping discounts, or gifts.
10. First Time Shoppers
Don’t let first-time visitors leave without making a purchase or at least get their contact information! Segment new shoppers and deliver dynamic content and offers to guide them down your funnel. You can use pop-up offers with access to discount codes if they enter their email address, so if they are not ready to make a purchase, you can keep them in your funnel and send them follow-up emails.
Dive into your marketing analytics and see what device they are using and the source of their visit (search engine, social media post, PPC ad, etc.). If the visitor was browsing your winter collection, use that data to send dynamic content and offers for winter gear directly to their inbox. Make sure you include plenty of social proof on your website, such as reviews or testimonials, to lower the action threshold and get them to purchase.
Plug Into Intelligence Commerce and Transform Your Business with our Advanced Customer Segmentation Technology
There are many benefits of customer segmentation, and it’s never been easier to segment your audience than with Nogin. Once you plug into Intelligent Commerce, you’ll gain the customer segmentation technology you need to deliver dynamic and personalized content to each shopper.
Our rule-based criteria and machine learning technology automatically target visitors with content and offers that align with their buyer profile. You can seamlessly manage unlimited content placements throughout your store and automatically deploy offers for qualifying customers in each segment.
Best of all, our customer segmentation requires no analysis on your end. As visitors interact with dynamic content and offers, the data is fed back into our Content Management System, which is connected to our Luminate Research and Development network.
We automatically run A/B testing based on the results of the campaigns to refine messaging and find the best offer for each segment. Our data scientists continually update algorithms to improve conversion results and keep visitors shopping with engaging content and personalized recommendations.
If you’re ready to make the move to enterprise commerce and gain the customer segmentation tools you need to grow your business and much more, it’s never been easier than with Nogin. Our headless enterprise technology plugs into Shopify Plus, supercharging it with market-leading functionality that outperforms against legacy enterprise platforms. Migrate to an enterprise level with no upfront costs in less than eight weeks!
Here are some of the main benefits you can expect migrating to Intelligent Commerce:
- Our servers are connected to Meta, Google, TikTok, and other social media platforms, so your ad performance won’t be affected by updates and changes, such as the iOS 16 update. While your competitors’ ad performance suffers, yours won’t.
- We can handle multiple frontends and multiple backends.
- Access 40 enterprise-level tools and features that improve conversions and lower marketing spending, shipping, and returns.
- Replatform to a superior enterprise platform without replatforming fees and go live in just 6 weeks.
- Your store will connect to our Luminate research and development technology that tests, analyzes, and deploys superior ecommerce tactics based on the best strategies across our brands. (Over $1 billion in annual Gross Merchandise Value.)
- True global enterprise ecommerce to reach and convert international customers.
- Our 3PL ecommerce fulfillment solution will lower your shipping and return costs.
- Leverage marketing automation driven by Artificial Intelligence (AI) and machine learning to convert more customers at lower acquisition costs.
- Plug into our enterprise ecommerce platform solution with NO upfront costs!
Nogin is a different approach to enterprise ecommerce, and the results speak for themselves:
- Our clients achieve an average 3X growth rate.
- Conversion rates are 40% on our platform.
- Traffic costs 30% less on Nogin.
If you want to recession-proof your business and instantly become more profitable, it starts with a smarter approach. Learn more about the research and data behind a Commerce-as-a-Service business model and download the Coresight Research Reports below, or contact us today: