The Power of Segmentation (Statistically Proven)

Today, we’ll clear your vision on what segmentation is, the transformation of modern segmentation methods, and what segmentation can do for your e-commerce business.

Sounds interesting? Let’s dive right in 👇!

What is segmentation?

Generally speaking, segments of your audience (a.k.a customer base) are just like segments of an orange, that’s a whole divided into parts. However, in the e-commerce universe, each customer segment can be uniquely different in many ways since we can choose how to characterize and classify them 😎.

For instance, you can apply segmentation methods to identify specific types/groups of audiences, creating targeted, tailored advertising and marketing campaigns just for them. Implemented in the right way, segmentation can maximize the impact of your campaigns, giving more bang for your buck 🚀.

On the one hand, segmentation allows your e-commerce business to tailor product recommendations to the needs, interests, usages, and paying abilities of specific customers. On the other hand, it enables you to concentrate on your resources, money, time, and efforts on a more profitable market, which can effectively improve conversions and ROI.

Let’s have a look at what statistics have to say about the effectiveness of segmentation 👀.

As presented in the chart below, Omnisend’s recent study shows that segmented campaigns experience 62.2% higher order rates, 51.9% higher click-through rates, and 110% higher open rates than non-segmented ones.

Appboy conducted an analysis that looked at over 10 billion marketing messages and found that campaigns sent to well-defined customer segments resulted in a 200% increase in conversions, as opposed to generalized campaigns.

Segmentation also works wonders for email marketing. According to Campaign Monitor, segmented email campaigns can increase revenue up to 760% compared to campaigns that aren’t segmented.

The transformation of modern segmentation methods

In the past, segmentation had to be done manually. It meant having a marketer trawl through spreadsheets, crossing information between multiple files to find a target customer. Of course, this daunting task compromised their time spent on other tasks. It was long, mundane, and often dreaded. On top of all that, it had short-term relevance and was subject to error 😐.

Today that doesn't have to be the case - platforms exist that can automate segmenting, even for a huge customer base, in minutes 🥳. Amongst these platforms, Clerk Audience is an industry leader. With Clerk, not only can segments be exported onto other platforms you use (such as MailChimp, Facebook, and Google Ads), they also benefit from being constantly updated. This means, if you create a segment label for “new customers who bought from you last week," the pool of targeted customers is updated day by day. So, for instance, the audience can be different between the first week of July and the last. Meanwhile, you don't have to manually update a single thing.

Clerk Audience provides the smart way of segmenting, which is able to distinguish between purchases that are one-off and those that may be recurring 💡. So, whilst past software gave us funny anecdotes, they also gave customers little faith:

It’s very easy to be the Amazon in the story if you simply send out follow-up emails of related items without considering their relevance. By acknowledging that toilet seat collectors are a rare breed, you can segment your audience based on purchases that are likely to be bought multiple times - like toilet roll, perhaps.

Don't be a victim to old styles of marketing or segmenting that are now deemed obsolete. Rather than creating static segments or wasting time creating campaigns for customers who are unlikely to respond, smart segmentation is dynamic, responding to your customers' changing habits and behaviors.

Traditionally, the first generation of segmentation was based on demographic data, geography, and timezones. Today, going beyond this basic layer, Clerk’s AI-driven and behavior-based audience segmentation also utilizes customers’ behavioral data. Based on historical and real-time customer data, Clerk's AI can figure out complex marketing questions, like:

• Will this customer be interested in this product, category, or brand?
• How often does this customer purchase from your store?
• Is this customer still active or slipping away?
• How does this customer respond to offers and discounts?
• What is the average order value of this customer?

and the list goes on…

Some tips and a success story

High-quality customer data creates high-quality campaigns. So with that in mind, make sure that:

• Your audience is accessible. (Have your customers agreed to be contacted?)
• There are clear and measurable differences between your segments. Because you should not waste time tailoring campaigns for groups that are essentially the same.
• Consider and identify the different needs and benefits of each segment.
• Create segments that are versatile.
• Monitor and analytics: Money returned > Money spent. Pay attention to analytics and make sure that the money you invest in segmenting and creating targeted campaigns will pay off.

After knowing all of this, you’re now ready to start your own segmentation analysis and optimize your future marketing campaigns. And Clerk can help you with that 🙌!

As exhibited in the following figure, Clerk Audience allows you to have a much clearer, more synchronized overview of your customers. With a simple click,  you can instantly create scalable customer segments with expected ROI to, for example, re-engaging one-time buyers that are slipping away, win back loyal customers that are lost, and much more!

If you want to know more about how other e-commerce businesses utilize Clerk to grow their ideal customer bases, check out our latest customer story 👉: Munk Store Drives Sales & Improves On-site Shopping Experience with Clerk. Impressive results are instantly generated after using Clerk. For instance, after implementing Clerk Audience for just a month, Munk Store achieved 243% growth in its active customer segment 😍.

Being the #1 rated e-commerce personalization platform, Clerk can help your e-commerce business automatically grow sales and revenue 💸! Get started by talking to one of our specialists today: