As an online store owner, you know that your customers are not all the same. They have different needs, preferences, and behaviors, and they interact with your business in different ways. This is why customer segmentation is a crucial strategy for eCommerce success. By dividing your audience into distinct groups based on shared characteristics, you can tailor your marketing efforts to their unique needs and increase your chances of conversion and retention.
BigCommerce, a popular eCommerce platform, offers various tools and features that make customer segmentation easy and effective. In this article, we will explore the benefits of customer segmentation, the different criteria you can use to group your buyers, and how to leverage BigCommerce’s capabilities to implement targeted marketing campaigns.
Table of Contents
The Benefits of Customer Segmentation
Customer segmentation allows you to understand your audience on a deeper level and identify patterns and trends that can inform your marketing strategy. Here are some of the main benefits of customer segmentation:
Better personalization. When you know your customers’ demographics, behavior, preferences, and purchase history, you can create tailored messages and offers that resonate with them and make them feel understood and valued.
Higher engagement. Personalized campaigns have higher open, click-through, and conversion rates than generic ones because they speak directly to the recipients’ interests and needs.
Improved customer retention. By delivering relevant and engaging content at the right time and on the right channel, you can keep your customers coming back and foster long-term loyalty.
Increased revenue. When you target the right customers with the right messages, you are more likely to convert them and increase their average order value and lifetime value.
Criteria for Customer Segmentation
Now that you know why customer segmentation matters, let’s look at the different criteria you can use to group your buyers. Typically, customer segmentation is based on a combination of demographic, psychographic, and transactional factors.
Demographic Criteria
Demographic criteria refer to the basic characteristics of your customers such as age, gender, location, income, education, and occupation. These factors can give you a broad sense of who your customers are and what they might be interested in.
For example, if you sell fashion products, you might segment your audience by age group (e.g., millennials, Gen X, baby boomers), gender (e.g., women, men, non-binary), location (e.g., urban, rural, international), or income (e.g., high-end, budget-friendly).
Psychographic Criteria
Psychographic criteria refer to the psychological and emotional traits of your customers such as personality, values, attitudes, interests, and lifestyle. These factors can give you a deeper understanding of why your customers buy from you and what motivates them.
For example, if you sell outdoor gear, you might segment your audience by adventure level (e.g., extreme, moderate, beginner), environmental values (e.g., eco-conscious, sustainability-driven), hobbies (e.g., camping, hiking, surfing), or personality traits (e.g., adventurous, laid-back, conservative).
Transactional Criteria
Transactional criteria refer to the behavior and buying history of your customers such as frequency, recency, average order value, purchase category, and product preferences. These factors can give you a clear sense of what your customers like and how they interact with your store over time.
For example, if you sell pet products, you might segment your audience by pet type (e.g., cats, dogs, birds), purchase frequency (e.g., frequent, occasional), purchase history (e.g., first-time buyers, loyal customers), or product category (e.g., food, toys, accessories).
Combined Criteria
Of course, you can also combine several criteria to create more specific customer segments that align with your business goals and marketing strategy. For example, you might create a segment of high-income, eco-conscious, adventure-seeking millennials who buy outdoor gear regularly and prefer sustainable materials.
BigCommerce Customer Segmentation Capabilities
BigCommerce has several built-in features that allow you to segment your customers and create targeted marketing campaigns without needing extra tools or coding skills. Let’s explore some of these capabilities.
Customer Groups
Customer Groups is a feature that allows you to group your customers based on specific criteria such as purchase history, account type, location, or custom fields. You can create unlimited groups and apply different discounts, shipping methods, or tax rules to each group.
For example, you might create a VIP group for your high-spending customers who get free shipping and early access to new products, or a local group for customers who live in your city and can pick up their orders in-store.
Customer Segments
Customer Segments is a feature that allows you to target specific customer groups with personalized messaging and offers on your storefront or through email campaigns. You can create segments based on transactional and behavioral criteria such as purchase history, cart value, recently viewed products, or email engagement.
For example, you might create a segment of customers who abandoned their cart with a discount code or a segment of customers who bought a certain product category with a related upsell offer.
Custom Fields
Custom Fields is a feature that allows you to add custom data fields to your customer profiles and segment them based on this data. You can create custom fields for any criteria that is relevant to your business such as hobbies, preferences, or past purchases.
For example, you might create a custom field called "sport interest" and let your customers choose their favorite sport from a dropdown menu. Then, you can segment your audience based on this field and offer relevant products or promotions to each group.
Best Practices for Customer Segmentation
To make the most of your customer segmentation efforts, here are some best practices to follow:
Start with clear goals and objectives. Define what you want to achieve with customer segmentation and how it aligns with your overall business strategy.
Gather relevant data. Collect as much data as possible on your customers from different sources such as your website, social media, email marketing, or surveys.
Use segmentation criteria that make sense for your business and your customers. Don’t segment your audience just for the sake of it; make sure it is relevant and actionable.
Test and refine your segmentation. Monitor the performance of your segmented campaigns and adjust them based on the feedback and results you get.
Keep your messaging and offers consistent across all channels and touchpoints. Make sure your customers experience a cohesive and personalized journey from browsing to buying and beyond.
Conclusion
Customer segmentation is a powerful tool that can help you understand your audience, increase engagement and retention, and boost your revenue. With the right segmentation criteria and the right platform, such as BigCommerce, you can create targeted campaigns that resonate with your customers and drive conversions and loyalty. Take the time to explore your data, experiment with different segments, and optimize your marketing efforts for maximum impact.
Happy segmentation!