In a perfect world, every customer you market to would immediately see the value of your brand and your products. In reality, different customers have different needs, different means, and different motivations. This is why it is so important for online sellers to identify unique customer segments. The unique messaging and services you provide to your different customer segments can improve the effectiveness and efficiency of your campaigns, boosting conversions and improving customer loyalty in the process.
What is Customer Segmentation?
Customer segmentation is when you divide your customers into different groups or segments based on similar traits or behaviors. By creating these customer segments, you define and organize your relationship with customers and can create tailored marketing and sales campaigns to fit their specific needs. A customer segmentation strategy helps customize how brands interact with each customer group to boost conversion and build customer loyalty.
In this blog, we’ll focus on three very specific customer segments to help boost conversion rates and grow sales on Amazon.
Customer Segments Examples
Most brands segment their customers based on specific demographics, such as age, gender, income level, education, and marital status. While this is a very common tactic, and also useful for creating a customer persona, it is just one of many ways to group customers.
Here are examples of a few different ways to segment your customers:
- Location – country, state, county, city, or town.
- Psychology – attitudes, preferences, interests, values, and beliefs.
- Technology – mobile vs. desktop users.
- Transportation – car, bus, subway, train, or plane.
- Behavior – habits and tendencies.
- Needs – specific must-haves of a product or service
- Value – economic value of the customer to the brand.
Some customer traits can remain relatively fixed, such as geographical location and education level, while others might fluctuate, such as current needs and interests.
Many marketing tools allow you to further segment customers based on specific behaviors, such as email open rate and content engagement. The key in any customer segmentation strategy is to clearly define each segment and understand how to market the right products and services to them at the right time.
Right Product, Right Customer, Right Time
The key to any robust conversion strategy is knowing how to market the right product to the right customer at the right time. You know your products better than anyone, but you also need to know who wants to buy your products and when they are most interested in making a purchase. Your customer segmentation strategy must therefore focus on customers with the highest likelihood to make a purchase from your brand and do it repeatedly.
To improve Amazon conversion rates and build a loyal, stable customer base, we’ll focus on three specific customer segments: in-aisle customers, new-to-brand customers, and frequent customers.
In-Aisle Customers
This customer segment consists of customers who have shown interest in your products and customers who have shown interest in your competitors. They may have searched for your products by entering relevant search terms and keywords, have visited your listings or similar competitors, or may even have placed your products in their cart or made similar purchases from competitors in the past.
The important distinction of in-aisle customers from the general browsing population is that they have shown some interest in your products. This means these customers have more potential to convert, making them incredibly valuable for growing your brand.
You can easily market to these customers by analyzing their behavior and creating specific retargeting campaigns to match. By directly targeting customers who have shown an interest in your brand with the right product ads and messaging, your chances of converting that customer are much higher. If you are working with a limited ad budget or want to grow your customer base, your efforts are better spent on these customers.
New-to-Brand Customers
Customers who have only recently purchased from you are what we refer to as new-to-brand or NTB customers. This customer segment is critical for growing your brand and your sales, because they’ve finally made the decision to purchase from you. You can look at the final stages of their customer journey to determine which of your marketing and sales efforts had the greatest impact and apply what you learn to other customer segments.
With these customers, you also have an opportunity to strengthen a new relationship and build loyal, repeat customers by showing NTB customers all your brand has to offer, both in products and in customer services. Reach out after the sale to thank them for their purchase, ask for reviews and ratings, and offer suggestions for other products they might be interested in. With the right actions, you can transform what might have been a one-off purchase into a loyal lifelong customer.
Frequent Customers
Also referred to as loyal customers or brand halo customers, this might be your most valuable customer segment of all. These customers purchase your products more than once, which means they have already justified the cost of your products and are much more likely to purchase higher-cost items or convert to a subscription-based purchasing method if you offer one.
Your frequent customers know something of your brand, so you wouldn’t necessarily use the same messaging or tactics as you would for in-aisle or NTB customers. Instead, invite frequent customers to view your brand store or full product catalog, or create campaigns highlighting new releases or higher-ticket items. Since these customers have purchased from you more than once, their feedback is also very valuable. Reach out with customer surveys and request reviews. Ask which features they like and what products they’d like to see you offer. The relationship you build with this customer segment is critical to building and maintaining steady growth in online sales.
Learn More About Targeted Campaigns
At Kaspien, we frequently utilize customer segmentation tools to help our partners get the most out of their ad spend and their efforts. Subscribe to our weekly newsletter to learn more about our methods and stay up to date on the latest e-commerce research and trends.
