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Segment your target audience

When you have an online business, defining your target market is everything. Getting traffic to your website is just not enough. You need targeted traffic that is specifically chosen for your niche and industry. You need to know that the people coming to your website are interested in what you have to offer. When up against a range of online competitors, effective communication is the best way to differentiate your business. Market segmentation offers an opportunity to pinpoint exactly what messaging will drive your customers to make a purchase.

The 4 basic types of market segmentation are:

  1. Demographic Segmentation
  2. Psychographic Segmentation
  3. Geographic Segmentation
  4. Behavioral Segmentation

 

But the most important thing is first to find and define your target market. Without pinpointing the types of people who are most likely to buy from you, you will have no way of bringing in the right people to your site or knowing who you are marketing to. How do you do this?

 

  1. CONSIDER YOUR CURRENT CUSTOMERS FIRST

One way to get an idea for who your future customers should be is to look at your current customers. What do your current customers want out of your products or services? What are their concerns, passions, and pain points? How does your business answer these problems for your current customer base? Go back into your customer service emails, surveys, and other data to get a true picture of what your customers are about then figure out a way to find more people like these to bring to your site.

 

  1. EVALUATE WHO YOUR COMPETITORS ARE MARKETING TO, THEN DO THE OPPOSITE

There are many ways to compete in e-commerce. One often misunderstood notion is the idea that you should go after the same people that your competitors are going after and market to them. But an alternate strategy is to market to others that your competitors are not marketing to. This makes you the focus of these potential customers and helps you to create a monopoly with these forgotten customers that your competitors overlooked.

 

  1. CONSIDER BOTH DEMOGRAPHICS AND PSYCHOGRAPHICS

When focusing on developing your key audience, you need to have an understanding of both demographics and psychographics. Demographics are those statistical factors like age, gender, and occupation that affect buying decisions. Psychographics are more in-depth factors that influence how people think when they make a purchase. Some examples of psychographics include:

 

Personal values

Emotions

Preference and personal taste

Interests and hobbies

Ideologies about purchasing and behavior

All of these factors play a critical role in how people make buying decisions so figure out how you can tap into these factors when developing your ad campaigns.

 

  1. EVALUATE HOW YOU MADE YOUR DECISION

Once you think you have defined your target audience, you will want to assess how you came to that decision. This involves not only understanding your target market but also understanding yourself. If you are to truly tap into your target market in the best way and find the customers most likely to purchase from you, you need to understand how you define your ideal target audience.

 

What do you base your decisions on? Are you missing anything important that might help you to use custom ads to segment your target market further? The trend now in e-commerce is to dig deeper within the population that you are targeting and do cross-segments to advertise your business to. For example, if you normally send out a mass email marketing letter to 1,000 people on your mailing list telling them about your services, why not identify those 350 people who are specifically interested in only one or two of your products or services that appeal to their specific needs and interests.

 

Think about why you have defined your audience in the way you have and evaluate ways that you can drill down deeper to identify those who may purchase from your regularly in one of your subcategories instead of always focusing on all of your products and services to everyone.

 

  1. DO SURVEYS AND STUDY METRICS TO UNDERSTAND YOUR CUSTOMER

By using the tools that you have at your disposal to better understand your customer, you bring yourself a step closer to understanding what you need to do to bring the people to your site that will become your customer.

 

But remember that the goal should be more than creating a one-time customer. You should focus on creating loyal customers who will do repeat business with you. By doing surveys and asking customers how they liked your products and services, you will have an understanding of how to get them to buy from you again and again.

 

Study metrics and look at what your target customer looks like in your Google Analytics or Kissmetrics account, too. This will tell you if your expectations on what your customer looks like are realistic when compared with who Google records that is visiting your site.

 

 

E-commerce personalization depends on the data sources your solution can access and personalize against. There are many types of data and segmentation options available in analytics and personalization that you can use customize with.

 

Below are fourteen of the most relevant segmentation options that can be used for personalization, some of which use anonymous data but others that use existing profile information.

 

  1. Segmentation by referrer or traffic source

This means where the place where your visitor was prior to landing on your website. An AI-based personalization system can learn which offers work best for visitors from different sites, whether referral sites, social media, direct or from paid link ads.

 

  1. Visitor type

For example, new visitors or returning visitors can be identified in analytics and in personalization systems. This is a commonly used technique for personalization, for example, offering new visitors a discount on the first purchase or creating welcoming rewards for repeat purchasers.

 

  1. Customer information

Customer segments can be either profile-based or behavior-based. Behavior-based segments are based on, for example, what users have searched for on current and previous visits or purchase behavior. Profile-based segments are based on what kind of customer they are to the business, for example, VIP, infrequent visitors, first-time visitors. This segmentation allows businesses to upsell, cross-sell and incentivize to buy again.

 

  1. Site engagement duration or times

Examples of this are browsing time or the number of pages viewed. In some circumstances, it may be best to deliver personalization to visitors who have engaged with the site for a certain length of time. Audience behavior can also vary based on day of the week or time of day, so audiences visiting at different times can be targeted differently.

 

  1. Content (products) viewed

This is the most common segmentation technique used in retail personalization, based on product categories or individual products viewed. Related products of a similar style can be shown. Given the large number of products (SKUs) many retailers hold, some form of automation rather than a rules-based system is required here.

 

  1. Landing page

This is a slightly different form of content-based segmentation based on where the visitor first arrived on the site, which suggests their initial intent.

 

  1. Event or interaction

Common interactions on an e-commerce site are people who click on add to basket, cart or interact with product information. This can be selectors for product variants such as color or size or reviews. The value in the cart can also be referenced.

 

  1. Platform and device

As with analytics, a personalization system will usually be able to recognize browser, screen resolution, and device type (smartphone, tablet or larger screen formats). Not only will e-commerce personalization allow up to set up campaigns targeting mobile phone users to test against desktop campaigns, but AI-based systems may learn useful personalization rules, e.g. visitors on Apple iOS or desktop platforms prefer higher-value products. Multi-device tracking is a requirement, including mobile apps where relevant.

 

  1. Location

Such as country, region or city, weather, and season.

 

  1. Third-party data sources

Using email addresses, names, and other identifiers, you may be able to enrich customer data about demographics using data from external resources.

 

  1. Favorites & Likes

Based on previous purchases, segment your customers based on their likes and what their tagged favorites are. This can be done at brand, category and at product level.

 

  1. Average Order Value

If a customer’s purchases have exceeded a certain value, then you can cross-sell in other products of similar value which may be of interest to either warrant a discount offer.

 

  1. Current cart profile

If a visitor has put products into their cart, you can promote products that have similar product profiles whether that be color, material, theme, or sizing. The profile attributes you can match are endless.

 

  1. Account type

This is more relevant for B2B customers. This can be segmenting customers based on their pricing tier or the product range that they have made available to them.

 

So, as you can see there are many different types of marketing segmentation you can choose from to find and define your target market and effectively promote your product or service.

 

Your customers’ every decision is judged on whether the result is what they want, or whether it is what they need. Market segmentation allows you to recognize these needs and market directly to them, without any wasted messaging.

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