Having a well-informed and well-executed segmentation strategy lays a strong foundation upon which to build a scalable and sustainable personalization program.
Segmentation helps companies to learn more about who visits and shops on their site & to design experiences that increase user engagement and revenue. If a company jumps straight to one-to-one personalization, they can miss out on crucial learnings about different cohorts and their behaviors within their customer base.
In this blog, Qubit Senior Strategy Consultants Natalie Muldoon and Penny Jefferies talk about what goes into a winning segmentation strategy and define core segments across Qubit’s key verticals - Retail, Travel, and Online Betting.
What to consider when creating a winning segmentation strategy
Before you deploy segmented experiences, it’s best to have an effective segmentation framework in place. Cross-team collaboration, like in all personalization strategies, is key to success when building customer segments. They should be defined by, and easy to use across, multiple teams. Also, consider whether your strategy is aligned to business objectives. Will segmenting customers this way help to drive conversion rates or increase customer lifetime value?
You want to ensure that your segmentation strategy captures as much of your customer base as possible. Segments should also be dynamic so that customers can move between them, in order for them to see the most tailored and relevant experiences.
Defining visitor segments across verticals: common patterns
The most commonly seen types of segmentation frameworks across all verticals include device type (mobile, desktop, tablet) and purchasers vs. non-purchasers. You want to treat your first-time visitors differently and show them different content to a customer who shops with you more than once a week, for example.
Customer lifetime value bands are both a way of segmenting customers and a way of measuring loyalty. So much of what ecommerce teams measure is conversion-based as opposed to lifetime value, so it’s important to consider your loyal customers and use personalization to keep them coming back onsite. You can also offer VIP customers early access to sales, events and special discounts to reward their loyalty. This is especially popular in luxury retail.
Retail segmentation strategies
Geography is a popular segmentation strategy across different areas of retail, as trends can differ dramatically from one city to another. By ingesting geographical data you can show customers trending products in their area.
Category preferences can be used to segment customers, utilising current and past browsing data to tailor product recommendations. It's helpful to know the propensity of customers that shop across different categories onsite, for example, women who buy for men or children on a fashion site, so that you can cross-sell to these customers.
You can segment customers based on how they arrived on site. Knowing where they come from and tailoring products, offers, and content based on this can be an effective way of increasing conversion rate. If a customer clicks through from a particular email offer, they expect to land on the website with content reflecting that offer, commonly known as campaign mirroring. If they organically searched for a particular item, customers expect to arrive straight on a product detail page (PDP).
Common visitor segments in hotels and airlines
The most important place to start segmenting with travel brands is through cohorts, such as singles, couples, families or groups. With this, you can target different segments with social proof tactics, for example, “popular honeymoon destination” or “high-rated hotel for families”.
Destinations are also a popular way to segment customers. For travelers looking for a skiing holiday, for example, you can offer appropriate ancillary upsells, including ski lift passes and equipment rental.
Both airlines and travel brands use loyalty programs and customer tiers as a way of segmenting and targeting their customers. They are a helpful way of tracking engagement and can be used in experiences to encourage users to redeem their points or spend more with the brand so that they move up a tier.
Segments within the online betting industry
As a vertical that operates differently from travel and retail, online betting brands have unique segments to divide visitors into, including the frequency of betting and gameplay, such as ‘first-time betters’ and ‘daily visitors’, or the frequency of depositing onsite. ‘VIP’ status of customers can be determined by both the amount that is deposited each time and the frequency of deposits by an account.
During seminal events in the betting calendar, such as the Superbowl and the Grand National, you can segment users and target particular cohorts with experiences in order to increase customer retention. You can encourage visitors to self-segment by deploying visitor pulse surveys that ask what event they’re looking to bet on. You can then personalize web content, such as banners and push notifications, that highlight odds for these events.
Qubit can help you create a winning segmentation strategy
Segmentation is a great strategy for understanding your customer base, gauging customer retention and leveraging loyalty programs.
At Qubit, we can help you create a winning segmentation strategy in many ways. We can define segments that best suit your business objectives and onsite visitors or ingest existing segmentation frameworks and CRM data. With the right integrations in place, we can help you to form a single, omnichannel view of your customer.