Home eCommerce Development Adobe Commerce: Customer Segmentation (All about it)

Adobe Commerce: Customer Segmentation (All about it)

by Krowd Digital
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Do you know that segmenting customers in your store helps to improve your marketing efforts and increases customer satisfaction?

Are you aware that you can dynamically display content for a specific set of customers based on attributes like order history, shopping cart contents, customer address etc.?

If you’re not aware of it, then don’t worry!

 You have come to the right blog. This article will go through all the different aspects of customer segmentation and how the feature of adobe commerce is excellent for your online store.

But before moving on further, let’s know what customer segmentation is?

Customer segmentation refers to the grouping of customers into specific groups based on certain characteristics and certain data sources. The deciding attributes here include demographic characteristics and interest in your product. For example, if you are a person who is selling online books, they prefer fictional or nonfictional books. 

You can also refer to a pet store with diverse customers with different needs and preferences. The purchase also depends on the type they like, for example, dietary needs, lifestyle, income and how they like to interact with their pets. A pet seller will not find any outcome in communicating with all customers in the same way. This is where customer segmentation helps, and it will also change how you communicate with your present customers based on what you know about them. Krowd has helped many people identify the most profitable customers and tailor their offerings to meet their needs. Krowd also helps to let you deliver relevant shopping experiences for building brand loyalty.

Importance of customer segmentation in online stores.

There was a time when online stores focused on attracting more and more visitors to the online store through various efforts, such as marketing and appealing to average customers. But do you know that it also included the wrong audience on the online store? And after that, the expert in marketing realised that one size fits all marketing approaches aren’t practical. They targeted the wrong customers, resulting in wasted marketing costs and higher operational costs associated with product returns and code customer service. Customer service segmentation helps you target the right customers and get the best possible experience. Not only this, but it also helps to keep the customers loyal to your store. Your company can also get personalized experiences and give the customers product or content recommendations.

Most common types of customer segmentation that are used today:

Various types of customer segmentation are in use today, such as.

  • Demographic and socio-economic segmentation.
  •  Behavioral segmentation. 
  • Geographic segmentation.
  • Psychographic segmentation.
  • Social media segmentation.

How to do customer segmentation?

There are specific steps that you need to follow in customer segmentation. Let us go through each of the steps in detail.

The first step in customer segmentation is understanding the business cost.

It is imperative to know the overall business cost and the cost associated with each customer transaction. Before segmenting customers, you need to find the cause associated with shipping order processing customer service, including customer acquisition. Knowing the business cost will help you know how much you should earn from each customer transaction to gain more profit. Not only this, but most importantly, you will start linking customer behaviors to profits. This will also help you decide which customers are worth targeting and which ones are not. It would help if you also tried to know the lifetime value of a customer, that is, the average net profit attributed to your brand within a particular time frame. This will also help you know how much repeat business you can expect from a particular customer.

The next step is to identify your best customer.

Are you aware that 80% of your business comes from 20% of your customers?

When you quickly analyse the purchasing history, it will help you understand your best customers and which type of customers are buying your top-selling products. The customers that are profitable include:

  • High average order value includes customers who make few purchases, but their purchases are competitive of higher-order value. These customers are very profitable for your business whenever they purchase a product. The product is of high value. 
  •  Frequent Buyers: Customers who make repeated purchases from your store and respond 40 to 60% are better than other single time customers. They are the most profitable customers for your business as they rely entirely on your brand for the products that they need. The frequent customers are those customers who trust the brand, and they also refer your brand to other people, which increases your revenue.
  • Few returns: Some specific customers sometimes make very few returns or no returns at all. These are also the profitable customers of our business. These are people who are satisfied with your product’s quality and do not like to return the product. They trust the brand, and when you have fever returns, your brand automatically gets popularised.
  • Provider reviews: You should always value the buyers who leave a genuine review after making a purchase and the customers who use social media to tell their friends about the purchases. Advertisement is an essential part of marketing. When people hear positive reviews about your product, they are attracted to products and tend to buy that product. The sales of your business can increase just through marketing.

The next step is to collect data from external sources

It will be significantly more accessible for you to deliver a better customer experience when you know more about your customers. But for that, you have to look beyond the store database and find external resources from where you can easily collect data about your customers. 

Here are some of how you can collect data about your customers.

  • Browsing devices: Data can be collected by detecting browsing devices for accessing your store site. The customers usually browsed the stores from their laptops or computers in earlier times. Still, now with M-commerce, smartphones have also become a more significant trend in the eCommerce industry.
  • Census data: When you search a little extra, you can also collect helpful demographic information based on your customer’s zip code. This data will help you know more about your customers and help you achieve your target customers very quickly.
  • Cookies: The cookies also help you track a customer’s behavior when they visit your store and collect some helpful information. The cookies can help you collect your customer’s browsing history, income, age range, or page use.
  • Service and market research: An independent market research can be conducted to know more about the customer, like their attitude, including their lifestyle, activities, shopping preference, and the list is endless. 
  • Web Analytics: There are many web analytics packages like Google Analytics that provide information about essential parameters and also about the device.
  • Creating customer profiles: The customers’ needs, mindset, and challenges can also be identified very easily by creating customer profiles. A company can easily incorporate lifestyle, demographic and behavioral characteristics in the profile that the company wishes to target. Sub segments for existing products can also be identified.

 

How does Adobe commerce give the best customer segmentation?

Adobe Commerce: Customer Segmentation

Adobe Commerce

The customer segmentation feature of Adobe commerce lets you dynamically display content and promotions to target specific customers. There are many features in adobe commerce, like showing specific prices to a target set of customers and giving discounts only to the target customers. This feature also includes displaying cart price rule, catalogue price rule, tier price, reward exchange, category permissions, invitations etc. 

Wrapping up

Thus, now we understand how the feature of Adobe commerce of customer segmentation plays a significant role in the store’s marketing and overall growth. The process of customer segmentation helps you in many ways as it helps you come up with marketing strategies and the product that resonates with the customer. The process of customer segmentation helps to understand the customers in a better manner and personalize marketing and communication for each segment Customers also tend to respond in a better manner when they feel that they need it. The interests of the customers are being specifically addressed. Krowd has helped many companies achieve their target customers by customer segmentation and can help yours. Choosing krowd will be one decision you will never regret, so what are you waiting for?

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