The Ultimate Guide to Ecommerce Customer Segmentation

7. Using customer segmentation to power lifecycle marketing

One of the most common applications of customer segmentation for Ecommerce businesses is with lifecycle marketing. Thus, seven ways to think of your customer list are:

1. All Customers (a.k.a. Everyone)

Start with your full customer list. Store all of their contact information (namely emails) in one place. From here, you can start creating custom segments.

Types of emails to send: Holiday promotions, new product offerings, company announcements.

Recommended email schedule: Only when necessary, and no more than twice a month.

2. Potential Customers (a.k.a. Prospects)

These customers have never purchased with you before, but have either submitted their email as part of their entry for a contest or giveaway, signed up for your email newsletter or created a shopping account and abandoned their cart before completing checkout. They have demonstrated interest in your product but they are not yet ready to commit to a purchase. There is a chance that they are reluctant to buy from you because they want to become more familiar with your brand first. Or your product currently costs more than they are willing to pay. A combination of strategic branding, targeted coupons and product education should work well to engage this type of customer.

Types of emails to send: Welcome email series, cart recovery prompts, newsletters with educational content, satisfied customer testimonials, first-order only coupons.

Recommended email schedule: A welcome email should be sent immediately after capturing their email, once again 24 hours later, another after 72 hours, then weekly.

3. First-Time Buyers (a.k.a. One-time buyers)<

These are customers who have only completed a single purchase with you. With this customer segment, your goal should be to turn them into repeat buyers. However, there are several reasons why they have not yet made another purchase. For instance, some one-time buyers only needed your product for a specific need at a very specific time. Others feel your product insufficiently met their needs. Many may think your current prices are too expensive. A few may be unfamiliar with your other product offerings. Or they simply forgot about your business and need a quick reminder.

Types of emails to send: Order confirmation, new product offerings, re-ordering forms, product advice, product recommendations, educational content, customer satisfaction surveys, product review requests.

Recommended email schedule: The order confirmation email should be sent immediately after they have placed their purchase. Afterwards, you may email them up to twice a week. Of course, you may want to wait until after their order is delivered to send them product advice, customer satisfaction surveys and product review requests. A month or so after their purchase, you may prompt them with a re-ordering form.

4. Repeat Customers

Bundle shoppers who have made two or more separate purchases. These are customers who enjoyed your product enough the first time to return and place another order. Cherish these users as there is still a chance they may stop patronizing your store or that they may become brand evangelists who are loyal and regularly refer friends to your business. Respond quickly to customer service requests and experiment with ways to encourage them to place additional orders.

Types of emails to send: Order confirmation, new product offerings, re-ordering forms, product advice, product recommendations, dedicated refer-a-friend prompts, educational content, customer satisfaction surveys, product review requests, exclusive coupons for repeat customers.

Recommended email schedule: Up to three times a week.

5. Active Repeat Customers (a.k.a. Loyal customers)

Group customers who have placed multiple orders in a short time frame. Calculate the average time each customer waits between purchases. Then, label the ones who complete repeat purchases within that timeframe as “active repeat customers.” Treat these as your most valuable buyers. Active repeat customers are huge advocates of your brand and they have demonstrated time and time again that they love your product. To maintain their loyalty, consistently raise the bar on customer service and product innovation. Invite them to be a part of the brand-growing process by asking their opinion and mobilizing them to promote your business for you.

Types of emails to send:  Order confirmation, early access to new product offerings, re-ordering forms, product advice, product recommendations, dedicated refer-a-friend prompts, educational content, customer satisfaction surveys, product review requests, exclusive coupons for loyal customers.

Recommended email schedule: Up to three times a week.

6. At-Risk Repeat Customers

A warning flag should be raised when a customer takes an unusually long time to return and place another order. At-risk repeat customers are characterized as shoppers who have made multiple purchases in the past but have let more time lapse since their last order than the average time all of your customers typically wait between orders. However, these are not yet considered inactive customers until the time since their last purchase has lapsed more than three times the average time your other customers spend between orders. This is an opportunity to get back on your customer’s radar, share updates about positive changes to your product or business, incentivize them to make another purchase with a coupon, or ask them why they have not purchased from you in a while.

Types of emails to send: Win-back surveys, time-sensitive coupons, “We miss you” emails, big product- or customer service-related updates.

Recommended email schedule: You may already be on thin ice with these customers, so tread carefully. Stagger your email frequency by sending no more than one a week and slowing down your pace if the customer does not respond positively to your email with a purchase.

7. Inactive Repeat Customers (a.k.a. Idle, lapsed and latent customers)

It is inevitable, but sometimes good things come to an end. You may lose touch with some of your most loyal customers. Either their needs change, your brand and product change, or they simply forget about you. Whatever the case may be, it is your job to reignite the relationship. Inactive customers are shoppers who have placed multiple orders with you before but they have not placed another order for more than three times the average time customers spend between orders. Inactive customers can be unpredictable as any number of factors may have caused them to go idle. Of course, this is your chance to figure out why they have stopped purchasing from you and how you can convince them to come back. Feel free to be creative since there is only upside in experimenting with different approaches; many of these customers have valid reasons for why they have become inactive and there might be very little chance for you to win them back unless you make major changes to the way you do business.

Types of emails to send: Major company or product announcements, big product discounts, “How can we help?” questionnaires, last-ditch emails.

Recommended email schedule: At this point, you should be prepared to send your customer a series of emails with messages being delivered no more than once a week for a month as your final attempt to win them back before you lose them entirely.