Segmentation 101: Looking at your customers like they are mandarins

As I sit here eating a juicy mandarin, I can’t help but admire all the segments. They all appear to be so similar but are actually quite different in texture and taste. Some even have annoying pips. Now you may be thinking, isn’t this meant to be a blog post about marketing and not fruit? And you would be 100% right. But hear me out:

 

A mandarin with different segments isn’t so different from an eCommerce store with different customer segments.


At this point, you’re probably hoping that my use of this mandarin simile (
yep, it’s a simile not a metaphor) is over. We are nearly there, I promise. Just humour me with a few more sentences. Imagine I ate the first mandarin segment and was pleasantly surprised (we all know how hit and miss mandarins can be). It was juicy, sweet with a little bit of tanginess, and most important of all, there were no pips. Then imagine I ate the next segment with the expectation that is was going to be exactly the same as the first segment. I eat the entire thing in one bite, and to my dismay, this segment is sour and has 2 pips. I make a face of disgust and spit it out. Mission unsuccessful. 

 

 

The same logic can be applied to an eCommerce store’s customers (and to be honest, any business in general). If you treat all your customers as if they are identical, the outcome will be very similar to my mandarin story. Each customer is completely different and therefore needs to be treated differently. Doing otherwise will result in lower sales, and may even result in you losing customers. 

So before we get too carried away, let’s cover our bases. What actually is segmentation? In short, segmentation refers to breaking down aspects of your eCommerce store (orders, customers, products, refunds) into smaller ‘segments’ by filtering the data down. By segmenting your customers into smaller and homogenous groups, you can tailor specific marketing and sales tactics to each group that will result in higher conversion rates. These segments will differ in exact details from business to business (a high-value customer might be someone who spends $100 in one business, but $1000 in another business), however, in general, I think that most eCommerce stores should be boiling their customers down to similar segments. Let’s take the next 5 minutes to briefly explore a few of these potential segments.

 

cartoon of customers

Segment 1:

Lost customers

The customer that has made a purchase but hasn’t come back for a while. These customers are going to be an easier sell than most others. This is because they have already shown trust in your store and brand by punching in their credit card details. Now assuming the reason they haven’t made another purchase isn’t because of a bad experience they had with your store (if this is the case, skip this article and go solve that issue now!), there is a high chance that with a bit of love, they will make another purchase. The question is, how do you know when to classify a customer as ‘lost’. Well, this is going to depend entirely on the type of product you sell. If you sell a consumable product, with a short life span (like fruit), then that period is going to be very short. However, if you sell expensive, durable products like e-bikes, then that period is going to be much longer. If you are going to be emailing customers 1 month after they have spent $5,000 on an e-bike, asking why they haven’t made another purchase in a while, I can guarantee you that it will not be received well.

Once you have settled on the time period, a friendly email checking in with them, and even offering them a coupon code or telling them about other relevant products (like a spare e-bike battery) is a great way to entice them in to make another purchase.

 

cartoon-money

Segment 2:

Your VIP customers

There’s a reason why nightclubs have a VIP section for their VIP guests. They know that if they treat them well and make them feel special, they will spend more money and keep coming back to party. And while you wouldn’t find me in a 20km radius of some of these awful clubs, this doesn’t mean I can’t appreciate their fine marketing skills. The same can be said for your eCommerce store. You should be doing everything you can to keep your VIP customers happy. 

So how can you identify your VIPs? Ultimately this is going to be different for every store, but a good method is to look at the LTV (lifetime value) of every customer. The customers that are in the top 10% are likely your VIPs. Whichever method you settle on, once you have figured out who your VIPs are, treat them with a little extra love. This could mean emailing them first to let them know about a restock of a popular product, offering them a special coupon code every so often, or even reaching out to them personally to say thank you. These small gestures will go along way in the minds of your customers and secure future sales.

 

cartoon-cart

Segment 3:

Abandoned cart customers

If I’m going to be honest, the customers in this segment aren’t really customers. They are more ‘potential customers’. These are the ones that have nearly gone the whole way: they have landed on your website, had a little browse, added items to the cart, but when push came to shove, for some reason or other, they didn’t make the purchase. Re-targeting these potential customers is going to result in an easier sale than targeting potential customers that have never visited your eCommerce store before. Abandoned cart tracking will only work if you were able to capture their email address when they were checking out.

An email 1 hour after visiting your site containing the contents of their cart, and a button to take them back to your site for an easy check-out will hopefully be enough to close the deal. But if this doesn’t work, maybe sending a second email a day later, this time with a coupon code might do the trick. In any case, the good news is that there are great software options that will automate this whole process for you (it would be near impossible to do this manually).

 

“Eric, this is some great content here. Is there an easy way for me to actually segment my customers?”


Firstly, thank you for the kind words. Secondly, I never thought you would ask! You’re in luck if you use WooCommerce.
Metorik is a powerful piece of software that can help you easily segment all your WooCommerce data. It operates as your WooCommerce store’s co-pilot to help you answer any questions you have about your data. So for example, let’s say you wanted to find your VIP customers. In this case, let’s say customers that have spent $1000 and over, no problem:

metorik-segmenting

 

Same in the case of lost customers. Let’s say we want to target high-value customers, that haven’t ordered in a year:

metorik-segmenting

 

And to tie it all together nearly, Metorik can also send your customers an email automatically when they meet any criteria. So for example, the second a customer is classified as ‘lost’, an automated tailored email can be sent to them with a unique coupon code.

 

Bringing it all back to you


The world of segmenting data is big, beautiful and deep… and only for those with a curious and inquisitive mind. I believe that if you are still reading this post now and haven’t clicked away to Youtube, Twitter or Instagram, then you have the right mind for it! Becoming a master at segmenting means that you can ask any question about any data set, get your answer, and quickly start creating specific and tailored marketing/sales strategies to drive more sales. I hope today you have learned just enough to get you curious and interested, but not enough to bore you like my first year accounting lecturer. Oh, and sorry about the mandarin segment rant at the start.

Adios x

———-

Eric is the Head of Content at Metorik & Founder of Blank Coworking.

While he does enjoy the odd mandarin every now and then, he definitely doesn’t like them as much as this post suggests.

If you want to share a mandarin with Eric and chat eCommerce or coworking shoot him an email at eric@metorik.com. Just make sure there are no pips – for the love of god!

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