In an earlier article about personalization and smart email marketing, the goal was to give you a quick overview of the process and some of the key components involved. In this article, we are going to take an in-depth look at the power of the Shopper Segmentation aspect of personalization, and the role it plays in smart email marketing campaigns.
On the off chance you may have missed that article, personalization is the process of customizing a shopper unique experience. A business stands to gain the most when they provide shoppers with products and offers that are geared towards their unique interests. Therefore, shopper segmentation is truly at the heart of any personalization and smart email marketing campaign.
But that’s a condensed explanation, so let’s dive deeper into the “Why” of shopper segmentation.
Why Shopper Segmentation is Important:
Shopper segmentation is a key piece of the smart email marketing process because it is directly tied to personalization. Personalization is the process of customizing shoppers on and off-site experience. The idea is to curate the experience around a shopper’s unique interests.
With Datacrushers advanced tools backed up by Machine Learning (ML) and Artificial Intelligence (AI), it is possible to target shoppers on both a micro and macro scale. In other words, the products they see, and the offers they receive, can be served up both on their belonging to a specific group and as an individual.
This brings us to our next point, namely, how do we go about grouping shoppers into unique segments?
The Shopper Segmentation Process:
In the olden days of unsophisticated SAAS, shopper’s would simply be grouped together based on what they purchased. However, unlike traditional shopper grouping, the process of shopper segmentation has one key difference – it is dynamic – thanks to our sophisticated and highly advanced ML and AI.
What makes the shopper segmentation process so advanced, is that you need to choose the parameters around a shopper, as opposed to choosing them based on the shopper themselves. This is a radically different approach, resulting in what we call “Dynamic groups.” These groups have the advantage of being able to automatically add shoppers who meet the parameters and remove those who do not. Hence, as a shopper’s behavior changes, they are automatically moved into a different segment.
This will need you to create several unique shopper segments. But worry not, for we will cover this aspect shortly!
The process of shopper segmentation revolves around a few key parameters. While none of these parameters are “mandatory,” ignoring them won’t exactly do you any favors when it comes to personalization and smart email marketing. As we mentioned earlier, the entire point of personalization (and by extension segmentation) is to be able to serve up the right products and offers to your shoppers through your smart email marketing campaigns.
So, what are the key parameters you must apply to maximize the success of your shopper segmentation efforts?
The Key Parameters:
- Time: The amount of time since they engaged with your site over the past 7, 30, or 90 days.
- LTV – Shopper Lifetime Value: this is the amount of money (above and or below) that a shopper has spent on your site.
- LTS – Shopper Lifetime Sales: this is the number of times (above and or below) that a shopper has made a purchase on your site.
- Logged In: This is used for finding “registered” (and or subscribed) shoppers.
- Not Logged In: This is used for finding “guest” shoppers.
- Sale: For shoppers who make a purchase:
- Abandonment: For shoppers who abandon their cart or product search.
To augment the shopper segmentation process, there are also a number of “optional” parameters you might be interested in using on a case-by-case basis. They are all incredibly useful with each serving a specific purpose when running unique, targeted campaigns.
The Optional Parameters:
- Traffic Source: Where did a shopper come from to get to your site. EX, was it via a search engine, affiliate link, advertisement, or social media page?
- Recovery Source: This is used for finding recovered sales based on a specific source, such as from a cart abandonment email or exit popup.
- Engagement: Allows you to filter based on a shopper’s interactions with your emails. EX, did they receive an email, open it, click it, etc. You can also filter based on the name of the email campaign.
- Cart Content: This allows you to filter your segments based on the number of items, and or the total value of the cart itself. You can further the effectiveness of this process by filtering based on product groups as well.
- Config OS: This allows you to filter your search based on the Operating System (OS) of the device used by a shopper to engage with your site. Research has shown that iOS and MacOS owners have a higher AOV then their Windows/Android counterparts. Hence segmenting based on this information can deliver fantastic results.
By now you should have a solid understanding of what the different parameters in the shopper segmentation process can do. But we understand that this entire process might appear daunting for you to make the most of it. And like the proverbial “deer in the headlights” we don’t want you to feel so overwhelmed that you’re unsure as to how you may want to go about starting this process. So, in the next section, we promise that you will see the light at the end of this tunnel.
Making Sense of Shopper Segmentation in The Personalization and Smart Email Marketing Process:
To help you make the most of the shopper segmentation process, we have compiled a list of “stock” groups your business would benefit from creating. Just to be clear, the numerical values for LTV, LTS, Cart Items, and Cart Content are just used for the show. These are values that need to be adjusted to your businesses shopper activity.
It must be noted that to save a shopper segment, you must first name it. It is important to give your segments a name that will allow you to quickly understand its purpose without having to view the specifics of it. This way when creating a unique email campaign, you can simply choose the segment to include (or exclude) without having to manually enter Shopper Analytics to view its unique details.
7 Examples of Unique Shopper Segments:
Name:“Sale Not-logged in. 7 days LTV 1 – 100. LTS 1 – 5.”
Parameters: Sale – 7 Days. Not Logged In. LTV $1 to $100. LTS 1 – 5. Received and opened an email.
Name:“Sale logged in. 30 days LTV 100 – 300. LTS 5 – 10.”
Parameters: Sale – 30 Days. Logged In. LTV $100 to $300. LTS 5 – 10. Received, opened and clicked an email.
Name:“Sale logged in. 90 days LTV 300 – 1000. LTS 10 – 15.”
Parameters: Sale – 90 Days. Logged In. LTV $300 to $1000. LTS 10 – 15. Received, opened and clicked an email.
Name:“Abandonments not-logged-in. 7 days. LTV/LTS Unknown.”
Parameters: Abandonments – 7 Days. Not Logged In. LTV/LTS unknown. Received and did not open an email.
Name:“Abandonment logged in. 30 days LTV 1 – 100. LTS 1 – 5.”
Parameters: Abandonment – 30 Days. Logged In. LTV $1 to $100. LTS 1 – 5. Received and opened an email.
Name:“Abandonment logged in. 90 days LTV 1 – 300. LTS 1 – 5.”
Parameters: Abandonment 90 Days. Logged In. LTV $100 to $300. LTS 1 – 5. Received, opened and clicked an email.
Name:“Recovered Sale not logged in. 30 days. From Affiliate Link.”
Parameters: Recovered Sale not logged in. 30 days. Traffic Source – Affiliate link. LTV $50 – $175. LTS 1 – 5. Recovery Source – Affiliate Deal. Received, opened and clicked email. Product Group – Affiliate link mattress sale.
In theory, there is an infinite number of combinations you can use to create unique shopper segments. In practice, it is best to avoid creating more shopper segments then you can manage your smart email marketing campaigns. This brings us to our next point – keeping personalization mind, how do we take advantage of these shopper segments?
Applying Your Shopper Segments to Your Smart Email Marketing Campaigns:
The goal of your shopper segmentation efforts should be that of streamlining the retargeting process. You see, by creating these unique groups, you can quickly decide which products and offers to provide shoppers through your smart email marketing efforts. These groups will also help you decided how gently, or aggressively, your messaging and tactics need to be.
For example, it is good to reward a shopper loyalty. Therefore, you would not be wrong to believe that only logged in shoppers should receive the best coupons. However, some shoppers are hesitant to sign-up and create an account with an eCommerce site, even though they do not mind making regular purchases. Thus, it would not be fair to neglect them just because of their preference not to register.
Furthermore, LTV and LTS values are subjective based on what it is that your business sells. Let’s consider two examples to get a better understanding of how this works.
- Low LTV – High LTS: If you sell inexpensive toys, shoppers may be making one purchase every month. Hence, they might have an LTV of $120 and LTS of 12.
- High LTV – Low LTS: If you only sell consumer-grade HDTVs, it makes sense shopper might not make more than 2 -3 purchase a year. Hence, they might have an LTV of anywhere from $300 – $100 while having an LTS of 1 – 3.
In Summary: When It Comes to Shopper Segmentation, Personalization, and Smart Email Marketing:
You must use a segmented email blast that is designed with the right messaging (and images!) in mind. Thus, the products you display within your emails should be relevant to the interests, or spending ability, of your unique shopper segments. Furthermore, your unique offers (coupons) should be relevant as well, based on a shopper’s behavior. Logged in shoppers who have a reasonable LTV and LTS but abandon products might be doing so because of something simple like the cost of shipping. In this case, an email blast to this shopper segment offering them free shipping on orders over a certain amount can work wonders for your business.
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