Find out why it is worth to get to know your customers better and how to segment the target group in the e-shop.
Customer segmentation has become one of the key tools for sales management in e-commerce. In-depth analysis of events related to the behaviour of a potential customer in the network can bring many interesting conclusions to the owners of online shops. Such as e.g. preferences related to order delivery, basket value or shopping frequency. Why is it worth to get to know your customers better? How to segment the target group in the e-shop?
Get to know your current and potential customers
In order to achieve and maintain a strong position among the growing competition, online shops are forced to use effective ways to reach their customers. To achieve this, they reach for customer segmentation, which means that potential buyers are divided into groups. The members of these groups have similar needs and can be expected to react in a similar way to different marketing activities. In order to use the potential of customer segmentation, it is necessary to carefully analyse the behaviour of shoppers in an online shop and to identify the group that brings the highest profits to the shop.
Why is it worth to segment customers?
Customer segmentation is undoubtedly one of the most important tools for managing online sales. Thanks to it, it is possible, among other things:
- precise direction of marketing activities,
- optimising the costs of marketing activities,
- evaluation of actual and potential profits,
- servicing the most profitable customers,
- adjusting strategies on the basis of changes in customer behaviour.
Most frequently used segmentation criteria
In the customer segmentation we can distinguish a few basic criteria:
- demographic – age, gender, marital status, education and nationality,
- economic – country, profession, income,
- geographical – place of living, size of the city,
- social – lifestyle and interests,
- behavioural – consumer behaviour.
Consumer behaviour criterion
The key criterion of customer segmentation are now consumer behaviour studies. They consist in the analysis of such elements as preferences related to products or services, frequency of purchases, time spent on them, the value of the basket or loyalty to a given brand. RFM analysis is a particularly effective tool for valuing customers based on their purchases. According to this analysis, customers are divided into three groups:
R (Recency) – customers who have made a purchase on the website or have visited the website and performed activities indicating an interest in the products or services in question. The time of action on the website is taken into account – the shorter the time from purchase or visit, the greater the chance for the next or first purchase.
F (Frequency) – customers who have performed a certain number of actions in a certain period of time. In this group, loyal customers can be distinguished, especially valuable to the shop, who are worth devoting time to.
M (Monetary) – customers who spent a certain amount of money on products or services in the shop. The indicator is used to measure the value of customers for the online shop.