Quick Guide: How to Segment your Customers on Shopify.
Segmenting customers is a hugely important practice in analytics. In this guide we’re going to be going over how to segment customers using By the Numbers — a Shopify app. Combined with various reports these techniques can be used to give the insights you need to grow your business.
Before we get into the details of segmentation, we need to cover some basics.
What is Customer Segmentation?
Customer Segmentation is the process of grouping distinct customers together based on traits or behaviors. To illustrate, here’s a list of some possible segmentation characteristics taken from By the Numbers:
- Number of Orders
- Average Order Value
- Total Sales
- Total Refunds
- Total Discounts
- Days Since First or Last Order
- Number of Items Purchased
- Date of First or Last Order
- Email Verification Status
- Accepts Marketing
- Customer Loyalty Group (Dormant, At Risk, Promising, Defecting, Recent, Best, Loyal)
- UTM Campaign, Medium or Source
- Product(s) Purchased by Name, SKU, Vendor or Variant
- Discount Code
- Customer Tag
- Customer Location
With so many options it’s easy to get overwhelmed. Don’t worry! We’ll start simple by building a segment for customers whose first purchase was a ‘Large Widget’.
Segmenting By First Product Purchased
If you haven’t already done so, you’ll need to install By the Numbers to get started. The app offers a free 14-day trial so you can test it out before making a commitment.
After it’s installed, launch the app and open the ‘Segments’ page from the panel under the ‘Customers’ heading. You should see this:
From here you can select from 20+ preset segments that the app automatically generates using data from your store. These segments are automatically generated based on your customers’ behaviors and traits, so they give you instant insights into your business.
For example, you can look at customers in any RFM group, customers that have never used a discount code, or customers who have recently signed-up but have yet to order.
The ‘Segment Details’ page also includes helpful stats like Average Order Value, Average Customer Lifespan, Order Frequency and Customer Value.
By the Numbers also has the ability to connect and sync segments with an email marketing platform (like Klaviyo) so you can engage with and win-back customers.
Moving beyond presets, you can create custom segments based on a range of different customer behaviors. To do this, click the ‘Create Segment’ button on the top right of the page. You should see a modal window where you can designate things like Name, Description and Filters:
The drop-down list contains filters you can use to group customers. In this example page, we see filters for Vendor, Purchased Products (First, Last and All), Product Variants and UTM Marketing Campaigns. To see the full list of Filters, visit the Help Guide.
Filtering for ‘Purchased Product (First order only)’ gives us the ability to create a segment based on the first product that customers purchased. To illustrate, we filtered by customers whose first purchase was the (imaginary) ‘Large Widget’.
This lets us limit any of the dozens of reports generated with By the Numbers to include only the desired segment. To illustrate, let’s take a look at an example Cohort Retention Report:
From the ‘Segment’ drop down menu, simply select the custom or prebuilt segment you’d like to filter the report by. When we select ‘First-time Purchase — Large Widget’, this is what we see:
Note: ‘Large Widget’ is a product created for this demonstration. It won’t appear in your list by default.
As can be seen, the report’s values have been adjusted to reflect the desired segment. There had been thousands of customers represented in the August cohort, but there are now around a hundred. This lets you zero in on which customer’s segments are over or under performing.
Hopefully this guide has shown that customer segmentation doesn’t need to be a pain — especially with the help of custom-built apps like By the Numbers. Stay tuned for more useful guides in the future!
