Customer segmentation in eCommerce: how to do it and how to use it

13 customer segments you can identify and tailor your marketing messages for

You hear over and over that you should not be doing one-size-fits-all marketing but segmenting customers and tailoring messages instead.

Why?

Because segmenting customers based on their behavior eliminates the guesswork – they literally show you what marketing works with them so you can just replicate it and get results.

By ecommerce customer segmentation, you categorize your customers into smaller groups of people that have something in common and that makes thinking of offers and calls to action easier.

Being relevant and responding adequately to their actions is the basis of personalized marketing. It starts with acknowledging the differences in your customers’ behavior and working with them, not in spite of them.

The most important customer segments for an eCommerce brand:

• high spenders
• cart abandoners
• coupon lovers
• thrifty shoppers
• one-timers
• newsletter readers / ebook subscribers
• registered browsers (leads)
• special segments by location
• indecisive shoppers
• idle (inactive) customers
• curious browsers
• loyal customers
• the trendy customers

Ok, but how do you do ecommerce segmentation? How to segment customer data and how to target different consumer segments?

Worry not. Here, we outline the basic customer segments online stores often have and suggest how to reach out to each one with relevant offers.

Note: we recommend using an ecommerce CRM for customer base segmentation – one that can filter by actions and events is best.

High spenders

Every online shop should have some customers that spend a lot more than the average. They can either shop very often or they make large orders. Either way, they’re valuable for you because they make you far better profit than others who cost the same to acquire.

High spenders should be treated probably best of all customers and kept for as long as possible. They are the most important target customer segment. Your communication and offers for them should show appreciation and make their shopping experience pleasant and convenient.

How to identify them?

Filter your customer base by revenue (sales, CLV, LTV) -the simplest way is to take everybody who has spent more than the average CLV.

To make the list even more exclusive, you can select a revenue number a lot greater than the average – this, of course, will narrow down the selection.

What special things you can do to delight them and keep them around?

• Premium products and special editions
• Early access to new products
• Free shipping, express shipping and so on
• Free gift wrap
• Surprises in delivery packages
• Guarantees and maintenance
• Dedicated support, fast way to reorder
• Offer special bundles and value-packs

Cart abandoners

The tough bunch. You probably use special tools to fight –  send a “Come back” email and that’s it. Well, not quite. While it’s true many carts get abandoned because the shopper got interrupted, other people leave because they decided they didn’t want the product or saw an extra shipping fee.

To recover those orders, it’s a good idea to tailor the message and increase the chances for conversion. How?

Segment cart abandoners by product or category of interest

Of course, you want them to go back and finish the order. But, if they had reasons not to, you need a plan B.

By using the interest they showed in a certain product or category, you can add more related items in the same email and give them more options. After all, your goal is an order, no matter the product, right.

Coupon lovers

If you use coupons, there are probably customers who only buy with a coupon and never pay full price. While this is kind of annoying, you can turn it into an advantage and stimulate more orders from these people – the coupon lovers.

How to nail who they are?

Here’s the trick: filter your customer database by the action performed – “used a coupon”. At this point, it doesn’t matter which one. Then, add another filter – the number of orders equals 1.

That’s a workaround if your CRM can show you customers who only buy with a coupon directly (like 2 coupons used, 2 orders), go for it.

The last option is to tag them for each coupon and explore if the number of tags matches the number of orders.

I know it’s a bit far-fetched, but it’ll save you giving away coupons to all customers and will make this group happy without hurting your margins so much.

What to do with coupon lovers?

Keep sending them coupons, but cut it back for people outside that group. The idea is not to devalue your products so much with constant promotions while keeping the sales coming from price-sensitive people.

Thrifty shoppers

Shopping habits matter a lot if you want to do effective marketing and not annoy your customers. Your customer segmentation strategy should try to cover any kind of shopping behavior and target consumer segments accordingly.

Some people like the big spenders buy a lot in one sitting, while others prefer coming often, but buying only as much as they need at the moment – one bag of dog food, just a pair of leggings or a bottle of shampoo.

The good thing is that it’s easier to predict when they’re going to be needing a new item – shampoo lasts for about 2 months, so you know when to send a reminder.

How to define the segment?

Choose a number of orders around or above the average and a low CLV (customer lifetime value, total revenue from a customer). This would give you a list of people who shop regularly enough but don’t spend too much.

Possible tactics

• Watch product cycles and send an offer shortly before their time to buy again (retention analysis will help you know when that is)
• Offer bundles of related products (not separately)
• Expose to content on new trends and products
• Ask for feedback
• Use wishlists to make targeted discounts

One-timers

Your favorite kind, am I right? 🙂 Fear not, every customer had only 1 order once. Segmenting by the number of orders=1 is quick and easy.

What to do after that to get repeat sales?

• Upsell and cross-sell
• Use content to keep brand in mind
• Make a game with a new product so they need to buy it to enter.
• Ask for a review on the 1st purchase in exchange for a discount on the 2nd.
• Use seasonal changes to present new collections.

Newsletter readers/ ebook subscribers

If you invest time and money in content and email marketing, you’d want to know who actually reads it, right? It can help you come up with ideas to include or products to promote.

Tag them

We suggest tagging all newsletter subscribers so it’s simple to monitor their behavior and orders and see if they were influenced to buy by something they read.

How to stimulate purchases from subscribers?

• Regularly update them on new products, patents, features and so on.
• Create informative, educational or entertaining content to engage them.
• Include your products only subtly in all content, don’t be too obvious.
• Give them insider tips, professional consultations or any other form of value related to your products so they keep reading your stuff.
• Occasionally, include special offers only for readers.

Registered browsers (leads)

Most stores generate leads with pop-ups, newsletter subscriptions, coupon giveaways and wishlists. If you also have registered users who haven’t made a purchase yet, you’re leaving money on the table.

Who are they?

The simplest segmentation is by the number of sessions (better be significant, more than 5, for example) and the number of orders equal to zero.

The really good thing, in this case, is that browsing shows interest – they didn’t just register to download the pdf and forget about you.

Now, how to make them buy for the first time

• Create product-heavy content in emails and on your blog that links to products directly
• Give a discount for 1st order
• Use the products and categories they looked at for remarketing
• If it’s a wishlist you gather emails with, fake a sale of their chosen items.

By location

On a personal note, I get frustrated when I get a promo email with fashion winter essentials, for example, that include a silk strapless dress and sandals. I live in a 4-season country and it really bugs me that someone thinks I can wear those things in winter here. You bet I don’t buy it.

So, if you sell in multiple countries, it’s a good idea to consider customer location when coming up with promotions. Now, winter is approaching in Australia, but summer is coming in Europe and you’d best be preparing two different campaigns. 🙂

What’s more, location is tied to certain cultures and lifestyles and you should show understanding and respect to the different traditions. Just like you can’t serve tea without milk to a British person.

In what promotions location is important

• Anything season-related: summer sales, beach essentials, spring cleaning, prevention of fall vitamin deficit, coping with winter blues, etc.
• For products like skin care, sports, outdoor gear, clothes, food.
• Any culturally-connected promotions: Christmas, spring break, Father’s Day, Valentine’s Day, Boxing Day, Single’s Day and so on.

It’s true people are aware of all these differences and might not take it personally if you shower them with spring break sales.

However, if they don’t have such thing, your efforts are kind of pointless and look silly, don’t they? Not to mention that pushing someone outside of their comfort zone (religious holidays, inappropriate clothes) is unnecessary.

The indecisive buyers

I bet you have a few customers who browse your site a lot but buy rarely. They might be chatting with live assistance or abandoning carts all the time. They find it hard to make a decision and you’re losing their orders.

How to find them?

Filter all customers by the number of sessions (choose a good enough number like 7) and then by the number of orders (quite small like 3). Thus, you make sure those people browse twice as often as they buy.

Help them decide faster

• Give more info about the products – more pictures from different angles, videos in use, size details.
• When different colors are offered, change the picture to display the color.
• Highlight all important info like deliveries, returns and exchanges.
• Add social proof like an Instagram feed or Fomo.
• Implement wishlists to keep items of interest easy to find.

We have a whole article on how to convert indecisive buyers.

Idle customers

Need a few hundred in revenue to hit the target this month? Why don’t you make a habit of reconnecting with idle customers and bringing them back to shop?

Who is that?

Those who haven’t been active on your site in the last 2 months, let say. You can choose what period makes sense for your kind of products – devices are shopped for far less often than food.

Apply a filter for last session or last activity and you get a list of potential buyers.

How to re-engage them

• Based on their order history, ask for feedback on products.
• Offer a newer model of something the bought or a complementary product.
• Send them a content piece about what they bought – how to use it better.
• Use wishlists to create personalized limited-time sales.
• Use a quiz to lead them to new offers and product categories if you don’t know what they’re interested in.

Related: Emails driving repeat orders

Loyals

One customer segment is the dream of every seller. These people bring you a nice, steady revenue flow. They obviously trust your store and probably even recommend it to others because it’s their go-to place for this type of products.

Also, they know your products, prices, and promotions better than the others because they visit your site often and engage with your brand.

How are they different than the high spenders?

The loyals have many sessions and orders (more than the average) in addition to high revenue, which means they’ve been with you for quite some time, shop often and spend a lot. In comparison, the high spenders can come, get two of your highest priced items and leave forever.

To keep them interested…

• Set up a reward points system
• Send them secret offers unavailable for other customers
• Have a subscription/ auto-reorders option if your products allow it
• Engage them in the product creation and actively ask for feedback
• Relate number of orders to discount tiers

Curious browsers

This group is a true opportunity. They haven’t’ ordered in quite some time, but have been looking at your site recently. They’re interested and therefore – should be wooed! 🙂

What filters to use to find them?

Set the filter for last order to “more than 45 days” (for example, it depends on your product) and the filter for last active session to “less than 7 days”.

This segment is perfect for remarketing on Facebook (you can export a CSV) or an email with a personalized promotion on the products they were browsing. Grab them while they’re hot! 🙂

The trendy

This segment is full of potential because they shop the new collections and convert from new product offers. This opens the door for you – they are interested in pretty much anything new you can offer.

How to segment to find them?

By email campaign, they converted from (least in Metrilo you can choose all people who opened, clicked, converted, unsubscribed, etc. from a campaign) – choose the one that announces your new products.

You can add (or use separately) a category filter to identify the people who browsed the New section on your site. This can be on for an individual product if you only have one.

Then what?

• Prep them with new trends content before a new collection is out
• Give them limited-time early access to your new items
• Ask them for help naming the new things
• Give a percent back if they share a picture using the product on social media

See, in all examples, we don’t fight people’s habits. We’re not trying to change them – they’re your customers already and our goal is to keep them close without making them feel uncomfortable.

Read more: Case study on segmentation or Case study on engagement

Instead, we’re using what they reveal about themselves and their shopping habits to serve them in the best way possible.

By studying them and adapting to their preferences so your marketing efforts don’t feel intrusive, but welcome and timely. This is data-driven customer segmentation.