Here at Ometria we've been doing a lot of work for clients on 'customer segmentation' recently - a phrase on everybody's lips. I've heard seminars on how to do it at practically every conference I've been to this year. Customer segmentation is an increasingly important activity for online retailers in a space that is saturated with competition.
The kinds of 'segments' we are creating include:
- Hero customers (those that consistently spend above average and show excellent engagement with your brand), who get personalised email messages of gratitude and perks from the GM or owner.
- New customers (who have arrived in the past seven days), who get triggered welcome emails from the GM or owner a week after shopping, in some cases with a customer service hotline to call them on.
- Shoppers who bought last Christmas (and who have not bought since), with an email offering all sorts of goodies, including a free upgrade to express shipping, to woo them back.
And so on.
But what has struck me is how, without fail, it's assumed that all this activity should be the domain of the marketing team. That's normal, right? It's just a more targeted way of doing email marketing, after all.
Well yes, and no. In my view it's more than that. In the broad sense, it's marketing, but the closer you get to the customer, the more input you need from a customer advocate, and how many ecommerce companies have one of those?
Segmented is an ugly word - what it really means is the ability to get up close and personal with your customers, which is a great opportunity to nurture them. There are plenty of studies around that point to the effectiveness of this personalisation, as well as the fact that most retailers are still not doing it.
Mainstream marketers will tell you that it depends on the size of your database, that you need meaningful numbers to create meaningful segments. But that totally ignores the customer experience you should be looking to deliver.
Those companies that see the highest growth in ecommerce are those that best look after their customers – whether they have 50 or 50,000. Overwhelmingly, customers prefer doing business with a brand that manages to personalise the shopping experience. It started with tone of voice - with companies like Innocent or Boden who personalised the language and spoke in the voice their consumers could identify with. And what's exciting about today is the way in which data is allowing us to reconnect more personally with our customers - and segmented emails is a prime example of this.
But personalised campaigns should not simply be seen as an automated, slick marketing effort to drive clicks, but a way to nurture and retain customers with really excellent customer service. It should not be just about offers and promotions – though these have their place. It should, above all, be about making them felt wanted, valued and appreciated – so they will come back for more!
Let me give you an extreme example: a client of ours found their ‘hero’ segment numbered just 10. So instead of emailing them, they called them all personally. Result? They won £6000 of new business. If you could call all your customers, you would, no? A personalized, finely targeted email to the right customer is the next best thing.
Another example - two companies sent out cart abandonment emails. Once again, it's astonishing how few retailers do this, considering the uplift is now well proven - something like a net gain of 18% of new orders.
So the first one reminded me that I had not completed checkout, and that I should go back in as soon as possible to complete the purchase. The second one thanked me for shopping, and said that my basket had been saved in a wish list in case I wanted to find it again next time I visited.
Which would you rather receive? The differences between them are subtle, but significant. Clearly the first one had been written by a marketer keen to get the sale - they are about pushing, and achieving that 18%. The second one was written by someone who understood customer service - putting the customer first. The goal was not first and foremost to get the sale, but to retain and nuture the customer over the long term.
So for 2014 here's what I propose. Every ecommerce company should appoint a customer advocate. Wherever there is a customer touch point - whether at the customer service end or the marketing end - they should have the final responsibility for how the experience is delivered. He or she will be focussed on long term goals - customer engagement and lifetime value (which our segments allow you to filter for) - and not simply on short term return on investment. Or perhaps we should retrain our marketing staff to become customer advocates - because the old way of marketing is dying. Smart marketers today should be focused on the customer, on building a relationship with that customer over the long term. Long live the new market of one!