Why Retailers Need to be Segmenting their Customers this Christmas
Consider the two scenarios below:
1. A busy executive visits shirtshop.com and chooses two shirts in different colours. To save the basket, he needs to enter his email address, because later, he intends to visit the store to try one on for size. However, he gets delayed and the basket gets abandoned.
2. A young woman purchased a shirt from shirtshop.com for her husband just before Christmas last year. She prefers the high street, and has never been back to shirtshop.com “ but it was a great way to buy a last minute present for her son. This Christmas she plans to get him a new lawn mower.
Now lets pan over to the marketing director of shirtshop.com. She wants to send an email campaign for Christmas. They’ve got some great Christmas offers on. So, without analysing their customers (no time!) they send out a generic email that includes a whole list of useful Christmas gift items “ cufflinks, ties, belts and so on.
So both our busy executive and millennial young woman get an email in their inbox at the end of the week and both of their reactions were immediate – DELETE. The woman can’t even remember the shop at all “ it’s been a year.
Gmail Email Tabs
Deleting marketing emails is easy now “ especially if you use Gmail’s new email tabs. So what should shirtshop.com have done?
If only shirtshop.com had sent the busy executive a quick follow up email a few hours after they had abandoned their basket, they might have been wooed back for that purchase “ especially if there was an added incentive. And if only the approach to the young woman had been more on the lines of ?ªSorry we haven’t seen you since last Christmas, but here’s a free shipping offer to win you back this Christmas’, perhaps they might have tempted her to read it.
Why Aren’t More Retailers Segmenting?
It sounds easy enough “ but many retailers still send generic emails. The answer is data. On the one side you have the customer records, which require a lot of time consuming manipulation to segment properly “ and without interaction data, the retailer has no idea whether the customer has continued to visit the site since their last purchase.
On the other side you have the interaction data “ but most retailers are still relying on the vanilla flavour Google analytics, which has no personally identifiable customer data at all.
There are several tools out there today which help match the two, and can really help with very powerful customer segmentation, from our own Ometria platform, to Custora and Triggered Messaging. A statistic commonly bandied about asserts that the top 1% of your customers can spend as much as the bottom 50% put together. Doesn’t it make sense to treat these different customer groups separately?
Example Groups to Target
Typically, customer groups can be bucketed into three main groups “ product based, behaviour based, and source based (for example where they live.) For this Christmas, I want to suggest four really simple segments to target:
1) Products Viewed
Create a segment of your customers who typically buy the ?ªhero’ products “ the high price ticket items in each category. Treat these customers with care “ they are your VIPs.
2) Top 10% by Customer Lifetime Value
Same for these guys “ these are your best customers. Tempt them in for Christmas with exclusive deals or even exclusive product offerings if you can, as well as special favours like free express shipping, and a dedicated concierge service.
3) Procrastinators
This is the bunch who wait until the last minute to do their shopping. You may get a bucket load from last year “ those who purchased between 21st and 25th December. It’s a good idea to try and get them a bit more organized this year, so try sending them a free express shipping offer provided they transact by the 22nd.
4) Lapsed One Timers
Then there are the customers who bought from you last year in the first three weeks of December, and who you have never seen since. Most of them will have been first time purchasers. As every retailer knows, turning that first time customer into a repeat customer is the most important challenge of all “ typically conversion rates amongst repeat customers, who already feel warm towards your brand, is 2-3 times higher than your new customers. So warm them up! Target these guys and woo them back this Christmas. Show them you remember them and value them from last time.
If you execute just a few of these, you’ll be amazed at the results! Have a great Christmas.