How to segment your audience effectively

Elena Ruiz
Aug 31, 2018 · 5 min read
The best way to slice up your audience

So you want to effectively segment your audience. What’s the best way to do this? If you’re short on time or resources, you want the most bang for your buck. Here are 14 ways you can segment your target audience for effective ecommerce personalization.

The personalization versus segmentation debate

In the marketing arena personalization is a term often misused for segmentation. Personalization and segmentation, while both valuable tools for marketers, couldn’t be more different.

Segmentation is grouping customers together according to identifiable characteristics. Often, these are demographic characteristics such as age, geography, or gender.

Divvy up your audience based on their characteristics

Personalization is the optimizing of experiences and messages to individuals themselves — not the group they belong to.

Personalization is like tea — everyone likes it differently

The introduction of Articifial Intelligence and machine learning algorithms can now predict website visitors’ likes of products, categories and brands based on similar users’ behavior. Behavioral data from every single website visitor including views, purchases, searches and even time of day or amount spent. This data is then analyzed relationships are identified between different customer segments and the products that businesses sell online.

Key benefits to segmentation

There are five key benefits to having a good customer segmentation when looking to improve your customers online experience through personalization

  1. Better match of your product or service offering to your customers segment needs. Creating tailor-made marketing initiatives
  2. Improve product or services offered — businesses can use market segmentation to identify what does work but more importantly what doesn’t work and alter accordingly
  3. Retain more customers by offering products that appeal to where customers are in their stage of life
  4. Grow businesses by upselling on customers who have responded to introductory offers
  5. Enhance profits through targeting customers who have a propensity to have more disposable income by raising their average selling price.

So where to start with customer segmentation?

Let’s be honest — with so much data available nowadays it can be incredibly difficult, not to mention time-consuming, to determine a strategy and enact it. I’ve put together 14 quick ways to segment your audience in ways that will show them the most relevant content.

14 ways to segment your Audience

1. Segmentation by referrer or traffic source

This means where the place where your visitor was prior to landing on your website. An AI-based personalization system can learn which offers work best for visitors from different sites, whether referral sites, social media, direct or from paid link ads.

2. Visitor type

For example, new visitor or returning visitors can be identified in analytics and in personalization systems. This is a commonly used technique for personalization, for example, offering new visitors a discount on first purchase or creating welcoming rewards for repeat purchasers.

3. Customer information

Customer segment information should be put into one of two categories. Segments are either profile-based or behavior-based i.e. what visitors have searched for on current and previous visits and/or purchase behavior which allows businesses to up-sell, cross-sell and incentivize to buy again.

4. Site engagement duration or times

Examples of this are dwell time or number of pages viewed. In some circumstances, it may be best to deliver personalization to visitors who have engaged with the site for a certain length of time. Audience behavior can also vary based on day or week or time of day, so audiences visiting at different times can be targeted differently

5. Content (products) viewed

This is the most common segmentation technique used in retail personalization based on product categories or individual products viewed. Related products of a similar style can be shown. Given the large number of products (SKUs) many retailers hold, some form of automation rather than a rules-based system is required here

6. Landing page

This is a slightly different form of content-based segmentation based on where the visitor first arrived on the site which suggests their initial intent.

7. Event or interaction

Common interactions on an e-commerce site are people who click on add to basket, checkout or interact with product information such as selectors for product variants such as color or size or reviews. Value in cart can also be referenced

8. Platform and device

As with analytics, a personalization system will usually be able to know browser, screen resolution, and device type (smartphone, tablet or larger screen formats). Again, rules-based systems can’t personalize against all these variables, but AI-based systems may learn useful personalization rules. E.g. visitors on Apple iOS or desktop platforms prefer higher-value products. Multi-device tracking is a requirement, including, where relevant, mobile apps.

9. Location

Such as country, region or city, weather and season.

10. Third-party data sources

Using email addresses, names, and other identifiers, you may be able to enrich customer data about demographics using data from external resources

11. Favourites & Likes

Based on previous purchases segment your customers based on their likes and what their tagged favorites are. This can be done at brand, category and at product level

12. Average Order Value

If a customer’s purchases have exceeded a certain value, then you can cross sell in other products which may be of interest

13. Current basket profile

If a visitor has put products into their basket you can promote products that have similar product profiles whether that be color, material, theme, sizing. The profile attributes you can match are endless

14. Account type

This is more relevant for B2B customers

PureClarity has published full guide “E-commerce personalization: The complete Buyer’s guide to selecting the best platform” in partnership with SmartInsights. Read it to review examples of personalization used in e-commerce and gain access to a personalization recommendations checklist.

If you want to learn more about PureClarity, feel free to check us out online at PureClarity.com. Get in touch with us to ask questions, organize a demo, or try a 14-day free trial.

Elena Ruiz

Written by

I like thinking about & writing about the intersection of ecommerce and analytics to help people sell more things. Success Manager @ PureClarity

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