Unlock new ways to engage, retain, and nurture your customer relationships with these creative segmentation strategies.
Personalized experiences are no longer a nice-to-have—consumers expect them. Not only that, but a whopping 76% of consumers get upset when it doesn’t happen. Personalized recommendations are also one of the top incentives for shoppers to share their data, with 49% interested in receiving them.
To truly engage your customers in this challenging landscape, you have to go beyond table stakes personalization—such as name, age, gender, and recent purchases. You need to provide hyper-specific experiences that speak to your customers’ diverse preferences and unique relationship with your brand.
At Lexer, we're passionate advocates for using data to better understand your customers on an individual level. We love helping brands capture, organize, analyze, and action on these insights.
Here are nine of our favorite rich audience segments to build that drive engagement and ROI.
1. Repeat shoppers who spend the most with your brand
Your goal should be to identify and grow relationships with your most valuable or dependable customers—the ones who buy from you a lot. Think about how you can craft experiences to connect with them at every lifecycle stage, to keep them engaged and invested in your brand.
Although the percentage of customers who fall into this category may be small, focusing on them will bring the most revenue to your business. Once you’ve identified who these customers are, explore their behaviors and patterns to understand which attributes they share. Then, use those insights to tailor your messaging accordingly (e.g., to supply relevant promotions and upsell opportunities).
What’s more, once you understand what inspires this ideal customer, you can develop an informed strategy on how to acquire more of them.
2. Newly acquired customers who haven't made their first purchase yet (and need ideas)
Some products (or product categories) are more effective than others for attracting new, long-term customers. We like to call these your hero products.
To discover your hero products, it’s important to look beyond your most popular products—to the ones that your high-value customers typically buy first. In other words, products with high first-time purchase rates or that are often purchased by customers with an above average lifetime value.
This is where the biggest opportunity lies. Focus on promoting your hero products to new customers, particularly those who haven't made a purchase yet. If they're not sure what to buy, sending them a well-timed triggered message with a targeted product recommendation can be the nudge they need to convert.
3. One-time buyers who are primed to become two-time buyers
Understanding what makes people come back is key to driving loyalty. The more times someone purchases, the more you can learn about what drives them to shop. But how do you get a one-time buyer, who you don't know much about, to become a two-time buyer?
Lean on your existing customer data, such as which products drive second-purchase conversions and how long second purchases take. These data points can provide you with the insight you need to follow up at just the right time.
For example, we’ve found that repeat purchase timelines are often much shorter than you would expect. And, in other cases, the products that aren’t driving return purchases can reveal a new opportunity to fix the one-time buyer problem—whether that’s by introducing a stronger connection to the initial purchase, creating a bespoke campaign, or another strategy.
4. Shoppers who need to repurchase their favorite products
Replenishment purchases can be a significant revenue driver for retailers with consumable products. One way to take advantage of this by building segments and campaigns around replenishment behavior and timeframes—with the goal of establishing yourself as a part of your customer’s routine.
Keep in mind: not all products are a good fit for this strategy. For a replenishment pattern to occur, the product needs to follow a predictable usage period, like skincare items or coffee. A brand that sells jeans isn’t necessarily going to benefit from creating replenishment segments, since the window for re-purchasing is too broad and vague to identify.
5. Lapsed customers who haven’t purchased in a while
It almost always takes more time and effort to acquire a new customer than it does to get a lapsed customer to come back. So no matter how effective your acquisition strategy is, re-engaging customers who've shopped with you before—but haven't purchased lately—should always be a priority.
In your winback efforts, focus on customers who’ve lapsed recently. For most retailers, this time frame is anywhere between 45 days, 4-6 months, or even longer (6-12 months). It'll ultimately depend on your average purchase cycle and unique audience behavior.
Once this lapsed segment is created, target these customers with promotions that drive them to re-activate. These incentives should be tailored to their specific purchase history and habits to ensure the messaging is relevant and makes the biggest impact possible.
6. Inactive customers who are engaging with your brand less frequently
It's also important to have a proactive strategy in place to catch customers before they reach the lapsed stage. These may be customers who subscribed to SMS and email marketing, but are inactive on one or both channels—meaning they haven’t opened or engaged with communications for 90 days or more.
Alternatively, they might be customers who’ve unsubscribed from a single channel and not made a purchase for a certain period of time.
Knowing how your customers behave and their general lifecycle will help you determine new ways of identifying when a customer is at risk. Once you’ve established these parameters, you can create dedicated campaigns to draw them back, like competitions or rewards. Adapting the campaign to each of these different segments and executing them accordingly is the best way to provide a personalized re-engagement experience that drives results.
7. Customers who shop both online and in-store
Omnichannel customers have a much higher customer lifetime value than customers who only shop on one channel. Identifying who they are can help you discover new ways to encourage others to join them.
An effective solution is to segment your audience based on how they prefer to interact with your brand. Entice customers to shop in-store if they typically shop online, and vice versa. Sharing online-only sales or unique in-store experiences is also a great step to broadening your customers' interactions with your brand.
But remember to provide a consistent experience across channels so the customer’s shopping journey and the level of personalization feel seamless. If customers can pick back up where they left off and your messages reflect this, they're more likely to move freely between the two spaces.
8. Customers who prefer one channel vs. another
Determining how customers respond to different channels and introducing alternatives is another key segmentation strategy that can be used for both campaign execution and insight generation.
Addressability insights might uncover relationships between channel preference and customer lifetime value, or effective drawcards such as targeting discount shoppers via SMS. From there, you can create personalized campaigns based on channel preference or experiment with the effectiveness of certain messages across formats.
In our work with brands, we’ve found that it’s common for a large segment of lapsed and inactive customers to have also opted-out of email. That means that if you’re using email as your primary retention channel, you could be missing key engagement opportunities. Turning to channels like SMS immediately solves this problem, but paid advertising is another common pathway for re-engagement. Brands can also get even more creative with strategies such as sending postcards in the mail.
9. Frequent shoppers who you want to reward for their loyalty
Customers who've unlocked loyalty status should always be targeted differently than non-loyalty members. As frequent shoppers, they tend to offer higher value to your brand.
Segmentating by loyalty status allows you to enage your most valued customers with more personalized marketing campaigns (like exclusive gifts and rewards). But you should also consider targeting active customers who aren’t quite there yet with incentives that encourage them to join your program loyalty.
With the right data, segmentation analysis, and creative strategies to action on, the possibilities for driving engagement, retention, and revenue are endless. To dive deeper into how you can unlock the full power of your brand’s data, be sure to check out our recent guide with Attentive: Marketing Mix: Personalization Strategies to Drive ROI.
Built for retail from the beginning, Lexer is the leader in helping brands become customer-centric. Lexer's Customer Data and Experience Platform (CDXP) helps over 150 brands, including THE ICONIC, Sur La Table, Zimmermann, Supergoop!, Good American and Rip Curl, unlock their most vital business asset, customer data, putting it in the hands of all teams to inspire and enable the experiences that drive sales. The company is headquartered in Melbourne, with global operations in Australia, North America, and Southeast Asia. Learn more at https://lexer.io.