Using a Customer Segmentation Strategy For Sales Success

Topics: Shopify
By Gavin Write
Shopify Customer Segmentation Promotion Banner with Nine Different People in the Background

The key to eCommerce success is the creation of a personalized shopping experience, which can only be achieved by appealing to people's interests. When you're able to get to the heart of the motivations of potential customers, you can hone your content and messaging to drive interaction and sales. 

While this approach is effective, it's only possible with a coherent customer segmentation strategy. According to research, more than ¾ of a company's marketing ROI comes from segmented campaigns.

So, if your sales results are flat-lining, you have to do more to understand what it is that makes your customers tick across each segment. Join us as we explore the subject in detail.


What's Involved in Customer Segmentation?

As the term suggests, customer segmentation allows you to group customers together when they have similar characteristics. With each of these customer segments, it’s possible to build groups that are as narrow or broad as required. 

Each subgroup can be created using factors like income, location, age, hobbies, and even buying history. For instance, the ideal health food shop customer may have the following characteristics.

  • Gender - Female or Male
  • Marital status - Married
  • Income - $150k per year
  • Occupation - Works in the City
  • Life situation - Owns home, no kids
  • Interests - Sports, healthy eating.
  • Age - 20-45 yrs

Instead of essentially wasting much of your marketing budget on an overly broad market section, you need to create messaging that resonates. Customers who share ideal customer attributes will be the most likely to purchase from you, so they offer the best chance of driving engagement.

The Marketing Customer Segmentation Type Chart on a Purple Background 


Why is a Customer Segmentation Strategy Important?

When you focus on a precise customer segment, it becomes possible to develop meaningful personalized content that strikes a chord and generates a buzz around your brand.

Engagement is so much easier when the message each customer gets is relevant to their circumstances and location within the sales funnel. Segmentation represents a major profit driver for eCommerce operators, and it's something modern customers have come to expect. 

More than 75% of online shoppers now expect a personalized brand experience, meaning that a customer segmentation strategy is a prerequisite for success. Here's how you might segment your customers in practice:

    • Geographic Segmentation - this involves building groups based on their specific geographic locations or boundaries.

    • Demographic Segmentation - here you might divide the market through various personal variables like income, gender, or age.

    • Psychographic Segmentation - this type involves grouping your audience based on their lifestyle, attitudes, and interests.

  • Behavioral Segmentation - with this approach,  you would segment customers based on their behavior on their way to making a purchase.

When you present a highly-relevant message at precisely the right time, you not only increase your sales conversion rate but also encourage repeat purchases. Compare that to the annoyance that often comes when subscribers are presented with irrelevant content that does little more than waste people’s time.

The Customer Segmentation Chart With Information About Geographic, Demographic, Behavioral, Psychographic


The Benefits of Segmenting Your Audience

Clearly, there's mileage in employing finely tuned marketing customer segmentation, but it extends beyond making customers feel like you're speaking directly to them. There are a ton of benefits to an approach that generates an abundance of actionable data and they break down in the following way.


Increased Marketing ROI

One thing is for sure, when you make a big effort to create relevant content for each part of your audience, your bottom line benefits. Conventional wisdom tells us that segmented email campaigns in particular are known to increase revenue by as much as 760%! That’s an increase that should make you sit up and take notice, we think you’d agree.


Helps Set Your Omnichannel Strategy

As part of the segmentation process, you’ll obtain deep insight that will allow you to better serve your customers’ needs. This can be used by your in-house team or a customer segmentation strategy agency to help create a finely-tuned omnichannel strategy. By focusing on whichever demographic best suits what you offer, you can speak with confidence across every channel. 


Reduces Your Customer Acquisition Costs

The insights you glean when building your customer personas naturally makes your marketing efforts more efficient and effective. This means that it will cost you less to acquire each new customer when you streamline your sales process in this way. Combined with measures that promote customer retention, your marketing spend will go that much further.


Helps You Create Better Products & Services

Another benefit of better understanding your customers and what they want is you get the insight you need to improve your products and services. The process also allows you to identify possible areas for innovation. For example, you could find that one of your segments is particularly interested in sustainable manufacturing processes, meaning you can create products that align with this need. 


Allows For Better Quality SMS & Email Leads

Adding to the ever-growing list of reasons why creating a defined customer segmentation strategy is wise is the fact that you’ll typically get to enjoy higher-quality SMS and email leads. SMS opt-ins in particular can be tricky to obtain, however, by adapting your opt-in form in line with each of your customer segments, your conversion rate can soar!


Leveraging Segmentation For Meaningful Business Growth

Should you be still wondering whether you have time to devote to creating your own winning customer segmentation strategy, it’s worth reiterating that it’s not unusual for a triple-digit percentage revenue increase to be enjoyed when it comes to email marketing.

That said, there’s no magic at work here. Rather it’s simply the fruits that come from delivering highly-relevant, highly-targeted messages to people who want to see them at the right time. 

Whether you work on it yourself or enlist the help of a marketing strategy agency, it would appear that it’s vital that someone does. Otherwise, you risk missing out on countless revenue-driving and customer loyalty-building opportunities.

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