The customers to any market are varied and diverse. In the modern age of eCommerce, it is increasingly obvious to the retailers that the one-size-fits-all marketing strategy is not effective. The customers of any product, brand or service are bound to differ in a range of attributes and using one approach for all will not yield high success rates. The marketing strategy needs to be tailored to fit the needs of the groups of customers and to do that effectively, the customers need to be segmented.
What is segmenting?
Segmenting refers to the strategy of dividing up your market into segments, i.e. smaller groups who have something in common. By segmenting the customers in this way, you can personalize your approach to fit the characteristics of that particular group.
Dividing up the market into segments is a crucial task that requires deliberate and thorough research-work. Let’s look at several possible segments.
The wealthy and generous spenders
These are the shoppers who spend more than average and are an asset to the company if are dealt with wisely. You need to keep them pleased and with you for as long as possible. To do that, tailor your approach in a way that encourages them to stay. This can be done effectively by making them special offers like special editions and premium services or offers, free shipping and delivery, guarantees, special bundles or gifts.
These are the customers are the ones who abandon their carts and leave without purchase; the most troublesome group. Those who abandon their decided products can be made to turn back by email them items related to what they had chosen. This means that it is best to segment these cart-abandoners according to their interests and then to attract them back to your company by using this information.
The thrifty shoppers
These are those shoppers who buy items only when and as much as they need. So, they will be making frequent trios but not buying much. To these shoppers, a good strategy is to give them reminders and the estimate time can also be predicted for when they will need a product again. Shampoo for example usually lasts for two months and you could give them a reminder when you next expect them to need the products. You could also send special offers shortly before they need the product, or could offer them packages of products rather than presenting them individually.
What is RFM and RFM Analysis?
RFM refers to a strategy used to evaluate customers in terms of their Recency, Frequency and Monetary value. It aims at identifying loyal customers who will be likely to purchase in the future too. An RFM analysis is used to find out the last time a customer bought something, the frequency and monetary value of their purchases.
What is conversion?
Conversion refers to an action by the target audience that is considered beneficial for the retailer. Actions that can be considered as conversions include product purchase, an e-book download, subscription to newsletters or web pages etc. Conversion is essential in the analysis of the progress being made by a website and in identifying variables that could be changed to improve sales.
Marketing and promotion is the most significant aspect in any business as it is one of the main ways that a retailer can increase sales. Using customer segmentation strategies one can make their marketing more effective.