Customer segmentation is a powerful strategy for every e-commerce brand – if used cleverly. The idea of dividing your customers as per shared attributes for personalized communication is a powerful notion. Why? Because a segmented audience with a similar persona will yield a much better response to communication/offers targeted at them because of the commonality shared within the cluster.
From boosting your email CTR to unraveling hidden customer insights, customer segmentation is one effective strategy which is surprisingly used by less than 50% of the marketers.
Incorporating effective segmentation into your marketing can be a powerful tactical maneuver for all your campaigns vis-a-via ROI.
To demonstrate the power of consumer segmentation, we’ve compiled a list of 7 examples to inspire you!
Let’s deep dive into some of the different types of marketing segmentation and the relevant examples for each of them.
Let us get going!
Psychographic Customer Segmentation
Psychographic customer segmentation is simply grouping your audience based on their beliefs, thoughts, identity, and overall ‘psychographic’ image. For instance, an audience cluster based on ‘Green Living’ or ‘Veganism’ is a psychographic customer segment.
1. Tommy Hilfiger’s Recycled Denim
TH is a brand well-known for its lifestyle products meant majorly for men. The marketers at Tommy Hilfiger decided to cluster their audience based on ‘eco-friendly’ and ‘green material’ preferences. They then launched a campaign on Instagram for this segment to advertise their recycled denim. The response was fabulous, and TH was able to garner many loyal customers through that campaign.
Why did it work?
It is already proven that more than 63% of the customers prefer to shop with brands that support a cause or work for a purpose aligned with a greater good. TH capitalized on this fact and ripped-open a new segment for their recycled lifestyle products and apparel.
2. North Face’s Explorers
North Face is a well-recognized brand that sells outdoor recreation products like clothing, footwear, and equipment. In one of its digital display campaigns, North Face decided to target its products for the ‘Explorers’ category – a word with which many of their customers identify with. The result was massive brand recognition and the acquisition of many new customers.
Why did it work?
North Face tapped into the customer ‘sentiment’ of traveling and exploring. The ad appealed to people who identified themselves as ‘explorers’ and had visited several new places in the past year.
Demographic Customer Segmentation
Demographic consumer segmentation is the simplest form of audience clustering based on ‘societal identifiers’ or ‘population identifiers.’ For instance, clustering your audience based on their age, gender, socio-economic status, and so on.
3. H&Ms Offer for Students
H&M used age-based demographic segmentation to push their trendy apparel amidst the university students. They segmented their existing customers based on their age, clustered those falling in the student age-ranges, and promoted the following banner.
H&M was quickly able to acquire many student customers through the simple yet clever demographic segment.
Why did it work?
Customers like discount deals exclusively meant for them. They see it as a privilege to be associated with the brand, and H&M leveraged this fact wisely.
4. Loft’s Appeal to Teachers
Loft leveraged a valuable fraction of their customers based on occupation. The brand targeted teachers (Yes! Not just students ;-)) to promote their line of clothing. The straightforward campaign did appeal to the cluster of teachers who gladly redeemed the 25% extra off.
Your e-commerce brand can also experiment with such differentiated audience clusters based on their occupation. The idea is to appeal to the ‘professional’ image inside their minds and make the best of it.
5. Diamond Coffee for Married Men
Coffee & Marriage – is there a relation? Well, if you’ll look closely, they do…and not just because being married takes a lot of energy (does it?). Coffee is a wonder drink for busy family people, and Diamond Coffee did a fun job targeting the married men segment from their audience. The brand cleverly leveraged the busy schedule married men usually have in their light-hearted poster.
Why did it work?
Besides the humorous approach, Diamond Coffee embedded a subtle message into their married men segment’s minds – that their product will enable them to power-through any day, no matter how busy they get!
Behavioral Customer Segmentation
Behavioral consumer segmentation is simply segmenting your audience based on their online behavior and activities. Behavioral segmentation is often done based on the RFM model. RFM stands for Recency, Frequency, and Monetary variables that are used to cluster different customers together.
- Recency means the last purchase made by the customer
- Frequency means the number of purchases made by them in a given time period
- Monetary variable deals with the average amount spent by them in the e-store
Let’s see how behavioral segmentation is implemented.
6. ThredUp Wooing New Customers
ThredUp, one of the largest online thrift store, caters to women and sells everything from shoes and handbags to accessories and maternity products. ThredUp used a customer segmentation questionnaire to establish segments within segments for new customers. They asked;
- Are they one-time customers?
- Do they have a high potential to make more purchases?
- Did they subscribe/sign-up with you?
- Did they use discount codes to complete their first purchases?
They then launched an email campaign for new customers in hopes of enhancing their lifetime value with a tempting offer.
7. DSW’s Gift to Loyal Customers
DSW is one of the leading retailers of shoes, boots, and handbags for men and women. The brand wanted to offer more to their loyal customers and segment them by their customer-lifecycle data and purchase history.
DSW then offered their loyal customers a chance to win a $10 gift certificate on spending a given amount for qualification.
The result was DSW registering increased spend per loyal customer who will later become the brand ambassadors for the company and its products.
Why did it work?
Loyal customers expect brands to recognize and value their loyalty. DSW did just that to nurture this relationship with their most loyal segment via a great offer!
Really, with advanced customer segmentation, you are just a creative thought away from generating more sales and better brand response. Your existing customer data is a gold mine, and with the right tools for market segmentation like Wigzo, you are just minutes away from deploying a highly effective segmentation strategy.
Wait no more. Supercharge your marketing now with Wigzo’s AI-based marketing automation today!