Audience Segmentation: 4 Basic Ways to Get Started

Personalized content is a must-have if you want to win and keep customers. But personalization at scale can seem daunting. Here are four accessible ways to make segmentation and personalization a part of your eCommerce playbook.

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There’s no denying it: The personalized shopping experience is no longer optional. From ads to promotions to product offerings, if your brand is still taking a one-size-fits-all approach to win and keep customers, it’s time to rethink and embrace audience segmentation.

Personalization By the Numbers

  • 71% of shoppers expect personalization (McKinsey)
  • 76% are frustrated when they don’t get it (McKinsey)
  • Consumers are 40% more likely to spend more than they planned if their experience is personalized. (Google)
  • Personalized marketing emails generate an 82% higher open rate. (SaleCycle)
  • 70% of Millennials are frustrated with brands sending irrelevant emails (SmarterHQ)
  • More than 50% of shoppers are willing to share personal information in exchange for a personalized experience. (Retail Touch Points)

The takeaway here is that shoppers want a personalized shopping experience. They will give your brand their personal information and are likely to spend more money if you provide personalization.

One Path to Personalization: Audience Segmentation

If personalization is so powerful and effective, why doesn’t everybody do it? An obvious obstacle to creating a personalized shopping experience is scale. Your brand has more than a handful of customers and less than an army of employees.

The first step to personalization is audience segmentation. There are endless ways to slice and dice your audience, but here we’ll talk about 4 general ways to get started in thinking about targeted marketing and personalization through audience segmentation.

1. Demographic Segmentation

Vector images of infant, children, young man and woman, adult man and woman and elderly man and woman illustrating demographic segmentation

One of the most basic ways to segment your audience is by basic demographic data. Demographic data is statistical information such as gender, age, income and marital status.

Demographic data is often provided during a customer’s account set up. For example, when someone creates a social media account, the platform offers the user the chance to describe themselves and often, that includes demographic data. Social media then offers digital advertisers the option to target demographics that are most likely to purchase or interact with the content.

Consumer preferences often depend on their ages or life circumstances. The same product may appeal to both a Baby Boomer and a Millennial, but, in order for a campaign to be effective, marketing language must be different for each group.

2. Geographic Segmentation

No mystery here, geographic segmentation lets you target people in a specific geographic area. The use cases for this kind of segmentation are endless.

Audience segmentation based on where people live, work and play can be done digitally and through out-of-door media. For example, a beach vacation resort might put this billboard in Buffalo, NY in January. The weather in Buffalo won’t even approach beach-like temperatures until June, so enticing commuters in hats and gloves with sunshine and warm weather may be a good idea. Especially if the resort has data showing that many of their winter visitors are from Buffalo.

Digitally speaking, merchants in a certain city or neighborhood may choose to target local residents. A new restaurant may target ads for their lunch specials to professionals located within walking distance.

Or, brands can use geographic segmentation to promote offers or test products in different areas of a country or region to gain valuable market insights.

3. Psychographic Segmentation

A spiral notebook that reads: Psychographics, personality, lifestyle, opinions, interests

Psychographic audience segmentation groups individuals based on interests, lifestyle, values or personalities. If your brand has created buyer personas, you’ve probably included both demographic and psychographic data. That is, you’ve identified for example not only how much income your customer makes, but also how they spend that income and why.

This additional layer of detail is invaluable for all parts of the product development cycle. For example, if you know your customers are highly motivated by convenience over bargain hunting, you may decide to set prices higher or avoid aggressive discounting.

Psychographic data can be gathered through third-party cookies. These cookies follow customers across the internet and social media platforms so that brands can see not only how shoppers interact on a brand’s site, but also where these customers navigate to once they leave your site.

However, increase scrutiny on privacy and data security is intensifying. Merchants need to gather zero- and first-party data to ensure continued access to valuable customer data.

4. Behavioral Data

Behavioral data tells you how customers are behaving – specifically on your website and eCommerce store. Such audience segmentation data includes time-on-site, navigation path, abandonment rate, rage clicks, time between purchases, etc.

There are many tools and platforms that measure behavioral data. Of course there’s Google Analytics. Google Analytics gives you tons of “what” and “how” and “where” data:

  • What time of day does your site get the most traffic?
  • How do customers arrive at your site (referral path)?
  • How many new customers come to your site? How many return?
  • Where do most of your site visitors live?
  • What are your site’s most popular pages?

That data you collect from Google Analytics can help you make decisions about where to expand or localize your product offerings. You can also use the data to determine the best time of day to add content or start a promotion. To a certain extent, you can use Google Analytics data to validate your customer personas. Oh – and Google Analytics is free, so that’s nice.

For more robust behavioral data, you’ll probably want an additional platform or service. For example, if you want customer-level data (as opposed to data sampling) or want to be able to track mouse movements, scrolling or see a session replay, you’ll need a second solution. There are, of course, free, freemium and paid services.

Bottom Line

When you have a 360° view of your customers – who they are, where they are, what motivates them and why they take action on your website – you can segment users and target promotions and personalized marketing to those segments.

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If your brand is ready to improve personalization and see higher top and bottom line numbers, you need the right user experience analytics tools. Whether you have a team of two or 200, Air360 helps everyone make data-driven decisions that improve conversion rates. Contact us today.

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