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Segmentation

What Is Segmentation?

Segmentation in eCommerce is the practice of dividing customers into groups based on common characteristics, behaviors, or preferences to target them with personalized marketing messages and offerings.

Why Is Segmentation Important In eCommerce?

It encourages loyalty and ultimately increases conversion rates. In a competitive online environment, especially if we are talking about marketplaces, it helps to stand out and find a good fit for user needs.

Customer Segments Examples

Rely on these customer segmentation examples :

  • Generation (millennials, Gen-Z);
  • Geography (“Valid if purchased within the Sydney CBD area”);
  • Life phase (new parents or retirees);
  • Occupation (health tech programming specialists);
  • Income level (luxury brands);
  • Marital status (singles or married couples);
  • Family size (families with multiple children);
  • Hobbies/Interests (a subscription box for gardening enthusiasts);
  • Fitness level (a workout app with plans for beginners or advanced athletes);
  • Tech-savviness (less tech-savvy individuals).

Make it a principle to gather customer segmentation data and analyze it, improving the upcoming campaign.

The Benefits Of Customer Segmentation

It is easier for people to like and choose you because they feel understood, safe, and valued. They recommend you within their circle and come back to purchase more. You help users not waste time on myriads of offers, and turn gratitude into revenue.

Customer Segmentation Models

  • Psychographic — attitudes, principles, interests, values. E.g.: Selling eco-friendly products to environmentally-conscious people;
  • Behavioral — habits, product usage, or brand loyalty. E.g.: Offering discounts for returning clients;
  • Needs-based — wishes, pain points. E.g.: Promoting meal delivery services to busy professionals who lack time for meal preparation;
  • Benefit — advantages clients are looking for. E.g.: Advertising a phone with a strong battery to consumers who prioritize extended usage;
  • Value-based — perceived value or willingness to pay. E.g.: Offering premium subscriptions for high-value prospects seeking enhanced features.

 

 

Customer Segmentation FAQs

How to choose the right customer segmentation model?

Decide what goal to pursue, what data on real or potential clients you have, and whether you can get more data fast. Assess various models according to their pertinence to your goals, simplicity of execution, and the accessibility of the required data. Opt for a model that is consistent with your goals and is flexible enough to play with from one sprint to another.

What is customer segmentation strategy?

Customer segmentation strategies are all about systematic work on splitting audiences using various attributes and coming up with custom content and eCommerce offers. It is not enough to dabble, you need to have a plan that covers a minimum of several months, better than a year. Only this way you can see the real effect and make conclusions.

What are types of customer segmentation?

A type of customer segmentation defines the way you cut the “pie.” Will it be based on demographics? Will you use a location-income-occupation triangle? Will you address marital status and life phase first? You can use standard types, combine the existing ones, or create your unique mix.

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