A customer segment is a group of people who have purchased from your brand and who also share certain characteristics, such as online behaviors, demographics, or interests related to your products.
When you have a deep understanding of customer segments, you can create a marketing strategy that resonates with your target audience. This can lead to higher open and click rates, more purchases, and a better return on investment (ROI) for your ecommerce business.
How to use customer segmentation in your marketing efforts
The following steps will help you identify and create effective customer segments.
1. Collect your customer data
Before segmenting your customers, gather and analyze the data they provide willingly. This can include data collected through sign-up forms or other sources, such as:
- Customer purchases
- Customer feedback
- Website analytics
- Product reviews
Collecting data is a two-way exchange: people sign up to receive special offers and educational content from your brand, and in return, you get enriched data that can help you drive sales.
2. Segment your audience
To make sure your marketing messages reach different customer profiles, it’s key to segment your customers. This allows you to tailor your brand’s marketing efforts to specific customer groups and make sure each segment receives relevant messages.
High-level customer segments are created based on the following criteria:
- Demographics: Age, gender, location, income, and family size can help identify target audiences. For example, if you own an ecommerce that sells clothes, you can segment your customers according to their income and offer luxury products to working professionals, while offering budget-friendly options to students.
- Behavior: Purchase history, browsing behavior, and website activity provide valuable insights into customer preferences. For example, your sporting goods ecommerce could segment customers based on what they purchased to send relevant product recommendations.
- Psychographics: Understanding customers’ interests, values, and lifestyles helps you send highly relevant messages. For example, if you’re an owner of a fashion brand, you can segment your audience based on whether they’ve shown interest in trending clothes or limited-edition items.
- Geography: Location influences product needs and preferences. For example, your clothing store might segment customers based on where they reside and promote winter coats in colder climates and swimwear in warmer regions.
3. Personalize content to each segment
Understanding your customer segments is key to delivering highly relevant content. By tailoring your messaging to specific customer segments, you can increase engagement, build stronger relationships, and drive conversions.
To effectively personalize content, use data customers voluntarily share with you and data you collected based on how they interacted with your brand.
Here are a few examples of personalization based on customer segments:
- Purchase history or frequency: Give your loyal customers or frequent buyers early access to new products.
- Last-viewed products: Offer a discount or send product announcements based on what your customers have checked out in your store.
- Email engagement: Based on how frequently a customer engages with emails from your brand, switch from brand storytelling to a more sales-oriented tone.
- Customer reviews: Offer a discount to customers who include a photo in their reviews.
Continuously analyze customer behavior and preferences to refine your personalization efforts over time.
Customer segmentation vs. market segmentation
While sometimes used interchangeably, customer segmentation and market segmentation play different parts in your marketing strategy. The main differences are:
- Customer segmentation: Dividing and grouping your existing customer base into distinct categories to better understand them and drive repeat purchases
- Market segmentation: A similar set of segmentation techniques that focus on a larger target market to identify potential new subscribers and customers.
Ready to reach your ideal customers more effectively? Try Klaviyo today to segment your customer profiles, pull data from over 350 pre-built integrations and APIs, and enrich customer profiles with predictive analytics—all in one marketing automation platform.