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March 9, 2015 // 11:00 AM

7 Ecommerce Segmentation Hacks for Profitable Customer Loyalty

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We all have a favorite store or restaurant; the one that every time we walk in the staff knows our name, our order, and that we like our martinis shaken, not stirred. This personal connection is what keeps us coming back. But how do you achieve that same personal feel in ecommerce?

While you won’t have those same face-to-face interactions in the online world, you know more about your customers than you think! With the right ecommerce and marketing platforms you have access to advanced customer segmentation that most merchants do not take advantage of.

Segmentation allows you to offer the right perks and incentives to the right customers, so they feel the same way online as you do at your favorite brick and mortar store.

Here are 7 segmentation hacks to boost customer loyalty on your site.

1) Offer Improved Support for High Revenue Customers

I’m sure many of you have heard the old business adage, “20% of your customers generate 80% of your revenue.” In ecommerce, this is true. You will undoubtedly have your “Power Customers.” Treating these customers the same as every other customer is a huge missed opportunity. 

You want these profitable customers to feel valued. Offer them perks and advantages like: an extended return policy, priority support, or even a free gift here and there. 

How to Segment:

Sort your customers by total spend (or revenue) and select a percentage that you are willing to offer these perks to. 

2) Upgrade Shipping for High Frequency Buyers

Shipping is a major part of a customer's decision-making process. According to Lean Analytics, so much so that 44% of customers will abandon their shopping cart if they view the shipping as unfavorable. Shipping costs are even more important to customers who are placing orders frequently.

Customers who order frequently will see more value in getting expedited shipping or cheaper rates than they will from a straight discount. Use customer segmentation to find your high purchase frequency customers and offer shipping related incentives in exchange for their loyalty.

How to Segment:

Set a criteria for what makes a customer a frequent purchaser (x orders per month/year). You can then sort your customers by orders and see which customers would be included in this segment. 

3) Identify Product Experts for Reviews 

Product reviews are one the best ways to increase your sites conversion rates. They establish credibility, can increase SEO, and much more. But a review is best when it comes from someone who knows about the product and product category.

You can segment your customers to discover who is frequently purchasing items in a particular product category. You can then offer that customer an incentive in exchange for their product expertise (review, video review, blog post). The incentive given will depend on your customer base, but it could be loyalty points, a coupon, or free a product.

Segmenting your customers to find these product experts converts better than blanket emails that ask everyone to leave a review, and you are sure that they are coming from a credible source. These customers are likely also brand ambassadors that will have no problem sharing the review they just wrote.

You can also reach out to these product experts when you are introducing a new product. Send them a sample of the product and ask them what they think. This will ensure that your new product is useful for your target audience and it will give you reviews you can post when you launch it.

How to Segment:

Do some data mining on your order data and determine which customers have purchased the most from each category of products.

4) Surprise Customers Who Open Emails But Don’t Purchase

If you are using an email marketing platform, you will have a list of shoppers who are opening your emails but not returning to make a purchase. These shoppers are often waiting for a specific offer or are waiting for a specific time to purchase.

You can satisfy these customers by providing them with an incentive to encourage them to purchase now. Again, this incentive could be loyalty points, a coupon, or a free gift. Encouraging them to join your loyalty program has a greater chance of converting them into a loyal repeat purchaser, rather than always waiting until they are emailed a discount.

How to Segment:

Many email service providers give you access to reports and analytics, you can look at these reports to see which customers are always opening your emails but not completing a purchase.

5) Incentivize Brand Promoters Using Net Promoter Score

Net promoter score (NPS), allows you to get a feel for how likely a customer will be to promote your brand to others. You can email customers after they make a purchase and ask them to fill out an NPS survey. You can then look at how they answer this and take action accordingly. Read about the process in detail.

If a customer identifies as a detractor, you can direct them to an apology page. You might be able to save this customer and turn them into a loyal one! A well-resolved problem can often turn a disgruntled customer into a promoter.

On the other side of the spectrum, you can ask those who identify as promoters to help spread the word. One of the best ways to encourage these customers to share is with a customer referral program, which can be included in a loyalty program for increased results.

How to Segment:

A few weeks after a customer makes a purchase, email them your NPS survey, and add customers to different segments depending on how they answer. Your detractors are anyone who selected 0-5 and your promoters are 8-10.

6) Remind Last Minute Purchasers to Buy Now

Many customers have a set time they like to buy, especially near a holiday or long weekend. These last minute purchasers likely to wait until the last possible moment to place their order. You can create campaigns for these customers that encourages them to buy sooner.

Segment these customers and offer them a promotion that expires before your last guaranteed shipping date. This encourages them to not wait until the last minute again. You can also offer an additional reward if they spend more than that segment’s average order value.

How to Segment:

Sort orders by date and look for orders that were made on or near your last ship date for key times of the year. Look to see if those customers historically have purchased at this time. Those customers are in your last minute purchase segment.

7) Get At-Risk Customers to Shop With You Again

An “at-risk” or “lost” customer is a customer who has gone an uncharacteristically long time without making a purchase. Customers who have reached this point are unlikely to shop with you again. But, if you create a customer segment for them you can create offers to encourage them to come back.

If you know that your average time between orders is half a year, you can create an “at-risk” segment. This segment looks at previous repeat customers who have gone more than a year (or anytime you choose) without a purchase. You can create specific campaigns that focus on winning them back with aggressive offers that you would not want to offer to every customer group. 

How to Segment:

Examine a customer’s history and calculate their average time in between orders. When a customer falls far outside this normal purchase frequency, it is a sign that this customer is “at-risk.”

Gaining Customer Loyalty

Loyalty is a product of an amazing customer experience, and a critical component of customer experience is relevant and personalized communication. When your messaging identifies with customers on an individual level, they are much more likely to give you their loyalty.

A personalized experience is the guiding principle behind ecommerce customer loyalty. The above segmentation hacks will give you the edge you need to start creating loyal, repeat customers!

If you want more tips and tools to create repeat customers, you can download the “Ultimate Guide to Customer Retention.

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Topics: Ecommerce

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