6 Key Customer Segments You’re Probably Overlooking (But Shouldn’t Be)

Posted by Hannah Stacey 25 Sep 15

Successful ecommerce marketing is all about relevance - saying the right thing to the right customer at the right time. Relevant messages get people opening your emails, clicking on your ads, and (hopefully) buying your stuff.

Customer segmentation (which you can read more about in our guide) has long been used by online retailers as a way of achieving greater marketing relevance by controlling which messages end up in front of which people. Typically this has involved tactics like segmenting newsletters by things like gender, age group or geography.

The truth is that these forms of segmentation are just the tip of the iceberg - with access to so much data about customer behaviour and preferences, there’s an amazing opportunity for online retailers to start targeting specific groups of customers based on detailed insight.

This blog post will take a look at six key, but often overlooked, customer segments, explain who they are and how to identify them, and offer some thoughts on how you should engage them.

1) Top spenders

Your highest spenders often contribute a disproportionately large amount to your overall revenue (at Ometria, we've found that the top 20 per cent of customers tend to account for 55-65 per cent of overall revenue). It’s therefore incredibly important to be able to identify and keep this segment happy, engaged and purchasing regularly.

Who are they?

There are many ways of defining your top spenders, but perhaps the simplest is by using historic lifetime value. Typically, this segment should include the top twenty per cent of your customers, based on the total amount of money they have spent with you.

However, in certain cases, the boundary should be set to encompass a smaller percentage (say, 5 or 10) - for example, when the lifetime value required to qualify as a ‘top spender’ is not significantly higher than your average order value.

What action should I take?

1) Analyse what caused them to become great customers

The more people at the top spender party, the better, and analysing your current best customers could uncover vital clues as to how to nurture more people into this status. Key things to look at include:

  • Acquisition source - are my best customers coming through a particular acquisition channel?
  • Marketing promotion - did a particular marketing campaign or promotion bring in a lot of my current top spenders?
  • Purchases - are my best customers buying a certain product or from a certain category?

 

2) Set up a VIP recognition programme

These guys are your best customers, and should be treated accordingly! It’s therefore important to plan and roll out a strategy focused on keeping them engaged and loyal to your store.

While specific tactics will vary from brand to brand, examples of retention tactics include:

  • Handwritten notes from the founding or executive team
  • Enrolment onto a loyalty programme
  • Offering express free shipping
  • Giving rewards for reaching certain spend levels
  • Personal shopping sessions/advice
  • Early access to new collections
  • Giving elite customers their own personal customer service representative

Extra top tip!

You may want to segment your top spenders even further - for instance, into ‘VIPs’ (top 5 per cent) and ‘elite VIPs’ (top 1 per cent), in order to create special strategies for nurturing them further.

2) First-time seasonal buyers (who have not shopped since)

For most retailers, converting one-time purchasers into repeat customers is a key priority. But achieving this objective is particularly challenging in the realm of the seasonal shopper, as keeping your brand front-of-mind when they’re unlikely to be engaging with your store on a regular basis can be a tough task.

Who are they?

First-time seasonal buyers are people who shopped during a peak season time (for instance, Christmas, Mother’s Day, Black Friday (or indeed Cyber Monday) but have not shopped again since. 

If the occasion in question is an annual affair, the timeframe for re-engaging these customers would typically be around the 11 to 13 month mark (though this would need to be adjusted for events that happen more frequently).

What action should I take?

Ever noticed how flower delivery companies are scarily good at targeting you around the time of your gran’s birthday each year because you made an order a couple of years ago? Take a leaf out of their book!

Ensure that you step up your promotion of the event that caused this type of shopper to make a purchase for the next time it comes around - create drip campaigns to notify them ahead of time, try to work in some upsell and, if necessary, include an incentive if they don’t come back to shop.

3) First-time coupon shoppers

Discounting strategy can be a touchy subject, with a whole host of issues - from brand image to merchandising to stock levels - to consider. As a result, it’s important to think carefully about how customers who use discounts or coupon codes are treated in order to maximise their value to your business.

Who are they?

Customers who used a discount voucher or coupon code in their first purchase. 

What action should I take?

1) Dive into the data

Examining your own customer data is the only way of devising a strategy for best marketing to coupon shoppers:

  • Do first-time coupon shoppers tend to repeat better when they’re offered a second coupon? Obviously, the ultimate objective is to convert discount shoppers into full-price-paying customers, but knowing whether further coupon codes are a powerful incentive for turning one-time discount purchasers into repeat customers is important insight to have.   
  • Do your best customers come in through a coupon code? A lot of brands worry about handing out too many coupons, but if you find that your best customers used a coupon the first time round, it’s important to recognise this, and build a strategy around it.

 

2) Create dedicated marketing flows for this segment.

Devise a marketing programme that coupon shoppers join when they shop for the first time. At the beginning, this campaign should focus on trying to convert these customers into full price shoppers (perhaps using cross-sell based on their first purchase), but a second coupon can be used as a last resort, especially if it emerges that your top customers came in through a discount code.

4) People that browse frequently but have never bought

Those that are frequently active on your site but who have never made a purchase are an infuriating reminder of revenue that could be made. Don’t let them slip through your fingers! 

Who are they?

Identifiable contacts (for example, those who have signed up to your mailing list, entered a competition or created an account) who have not yet made a purchase, but frequently visit your website.

How you define ‘frequently’ will depend on the vertical you operate in - for instance, if you sell FMCG goods, you might consider someone to be a frequent browser if they visit your site more than once in a week, whereas in fashion it may be more than once in a month.  

What action should I take?

1) Personalised emails and social retargeting

Set up a workflow aimed at getting these guys across the line. Incentivised browse and cart abandonment emails and social retargeting can be effective tactics, especially if they are personalised with products and categories that the frequent visitor has displayed a clear interest in (i.e. visited, say, more than two or three times within a given period).  

 

2) Customer service contact

If a customer continues to visit and not purchase, and only if you have the bandwidth, consider having a customer service rep send a personal message to these customers individually and ask whether they’re having any issues.

5) Unhappy customers

This segment encompasses marketing and customer service, and is incredibly important from a reputational perspective.

Who are they?

Customers who had an issue with their order that haven’t shopped again in the timeframe you’d expect a regular customer to come back and make a further purchase (this segment requires you to be able to integrate customer service data with transactional and interaction data in order to tag potential unhappy customers - either automatically or manually).

What action should I take?

Send a personal message (either through email or direct mail) to the customer in question with the aim of winning them back around, potentially containing an incentive.

For smaller or high-end retailers, this could be a personal note from a founder or customer service rep, but the process could also be automated so that a message is triggered based on a set of rules.

6) Regular sale shoppers

Lastly - a quick trick that you may want to try out with sale shoppers.

Who are they?

Customers who regularly shop on the first day of a sale or promotion that you’re running.

What action should I take?

If possible, it may be worth creating a priority sale shopper segment, to whom you give access to any sale or promotion that you’re running a day before everyone else.

You should then test to see whether this early access boosts the average order value of these loyal bargain hunters significantly.

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These six segments are intended to be a starting point - as inspiration for you to think more about behavioural segmentation and how you can start to make your marketing relevant to where a customer is at in their journey. If you have any questions, feel free to comment below!

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Topics: Ecommerce examples

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