🗞️ 018 Segmentation

Segmentation

Deliver more relevant and personalized experiences to your audience.

In last week’s issue we’ve talked about the benefits of personalization.

In today’s issue we’ll dive into segmentation, which is the backbone of your personalization strategy.

Segmentation is all about what you do with the data you've collected, enabling you to understand your users better.

Today, we’ll cover:

• What segmentation is

• Different types of segmentation

• How to apply it to various situations

• How you use segmentation to improve strategy

What is segmentation?

Segmentation is the process of dividing your user base into distinct groups based on specific characteristics or behaviors. By segmenting your users, you can uncover patterns, preferences and needs that are not apparent at first. This understanding allows you to tailor your marketing strategy and communication to specific customer groups.

Ultimately, segmented marketing leads to happier customers, which leads to more $$.

Different types of segmentation

There is an infinite list of segmentation type’s, but the most common ones are:

• Geographical segmentation

• Demographic segmentation

• Psychographic segmentation

• Behavioral segmentation

Geographical segmentation

Geographical segmentation involves segmenting users based on location, currency, time zones, holidays, and seasonality.

For example, if you're in Europe, you'll see prices in euros, while in the United States, prices will be displayed in dollars.

Holiday promotions like July 4th sales in the US or Mother's Day sales in the UK on different dates demonstrate geographical personalization.

McDonald's in India adapts their to the local market. You won’t find any cow burgers in McD India.

Language on a website is another form of geographical segmentation. Ensuring the availability of different languages is important to accommodate diverse users. However, it's essential to give users the option to switch languages, as assumptions based on IP addresses can lead to mismatches between language and user preference.

Demographic segmentation

Demographic segmentation is not as straightforward as geographical segmentation but still widely known through tools like Google Analytics. Demographic segmentation includes gender, age, family status, occupation, education level, income, religion, race, and ethnicity.

Properly segmenting based on demographics can lead to successful campaigns, but it's crucial to avoid negative stereotypes and focus on genuine personalization.

Psychographic segmentation

Psychographic segmentation - my personal favorite - involves targeting users based on their interests, hobbies, personal preferences, attitudes, beliefs, and values.

Facebook has popularized this type of segmentation, as it allows users to build audiences that align with their brand based on soft traits that resonate with individuals.

Ben and Jerry's ice cream is a great example of psychographic segmentation, with flavors tailored to specific values, beliefs, and lifestyle choices.

Behavioral segmentation

Behavioral segmentation is the type you're probably already familiar with. It revolves around users' behaviors, buying patterns, preferences, and habits.

Behavioral segmentation enables personalized interventions, such as exit pop-ups, abandoned cart emails, or tailored recommendations. It's effective because it capitalizes on user behavior and interactions on your website.

Other types of segmentation

There are several other types of segmentation, including:

• Techno graphic segmentation (based on devices used)

• Value-based segmentation (using RFM analysis to determine user value)

• Need-based segmentation (tailoring to specific needs at a given time).

The possibilities for segmentation are endless, and you should consider how they align with your business and website. Think about your users' characteristics, whether it's gender, style or pet type.

Key is to leverage segmentation to personalize their experience.

TL;DR

Segmentation is the foundation of personalization. It helps you understand your customers better and cater to their specific needs. Geographical, demographic, psychographic, and behavioral segmentation are essential for effective personalization strategies. By identifying patterns and preferences, you can tailor your store and offers accordingly.

Have a great Sunday!
Erik

Whenever you’re ready, there are a two ways I can help you:

1. Download the E-Commerce Audit Report. A +300 items checklist that identifies areas of improvement of your e-commerce store.

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