This ecommerce strategy article is an excerpt from our new book, The Ultimate Ecommerce Email & SMS Playbook. We’re diving into our ecommerce strategy chapter focused on the 7 Reasons Why Ecommerce Customers Leave Your Brand.
The first pillar in our S.P.A.M. Strategy is segmentation. We want to find the right person who would be interested in these brown shoes. I recommend you start creating high-level segments for this and then drill down deeper as you go along.
Let’s highlight some basic segments to start:
- Customers who bought black shoes. People who bought black shoes would obviously be in the market for brown shoes, wouldn’t you say? It’s a very simple segment to narrow in on automatically. You can swap out black shoes for brown shoes as well and see what that segment looks like.
- Customers who bought blue suits. This goes a little deeper outside the shoes category. Pairing a blue suit with brown shoes is, to some, the height of fashion. Completing the look with a pair of brown shoes would make sense, agreed?
- People who are browsing brown shoes. This segment is more forward-looking. Instead of looking at historical purchasers of shoes, let’s see who’s in the market for shoes in the next few days. People who are currently looking at brown shoes online – no matter the style – are obviously in window-shopping or buying mode. They’ve shown high intent to purchase brown shoes quite soon. They would certainly pay attention to an email about those shoes, offer or not.
- Customers who bought brown monk strap shoes or brown loafers. Like blue suit buyers, these customers may be interested in completing their wardrobe with these complementary brown shoes.
- Customers who bought brown Oxford shoes over 180 days ago. Do you see how every underlined portion of the use case is important in creating the segmentation? In this case, brown Oxford shoe buyers who bought half a year ago may be interested in the latest styles. This cohort bought the product previously and may love the new version.
These are just five segments to get you started on your segmentation journey. Over time, you’ll get more creative and refined with these segments by measuring how each segment performs.
These segments aren’t ranked in any specific order, so don’t assume that black shoe buyers will outperform brown shoe browsers. Every segment should be built and isolated at the send level to measure incrementality. In my experience, however, I’ve seen that people in shopping mode outperform nearly all other segments, so you may want to consider that as the best segment.
It’s important to remember that there will be crossover; for example, people who bought brown shoes obviously browsed brown shoes (how else would they be able to buy?), so be sure to suppress each segment from the one before it when launching a campaign to measure incrementality.
Any segments you would add here? Let’s keep going down this rabbit hole with a few more advanced or “out-of-the-box” segments that could yield some opportunity:
- People who clicked an email in the last 30 days. You may have found the perfect customer, but if they don’t engage with email or SMS, they’re not going to help move your brown shoes. It’s important to layer in engagement into your segmentation; otherwise, you’ll have a great on-paper segment that doesn’t click.
- People who buy full-price shoes vs. discount shoe buyers. Here’s another great segment to help you determine who should get a deal and who can pay full price. Why give a deal to customers who are willing to pay full price?
- Shoe buyers who have a predicted lifetime value of $1,000+. Finding customers who are projected to spend a lot of money with you – on socks, pants, shirts, and suits, perhaps – as well as bought shoes historically could help you capitalize on the true lifetime value of that customer.
- Customers who are about to churn. This is a deeper strategy, but, in this case, a deal on brown shoes could be a good way to prevent churn. Weigh your current offers and determine if this brown shoe offer is good enough to prevent churn.
When applying to a real-life use case, be sure to outline the campaign theme and zero in on the key parts. In this case, the type of shoe, offer, timetable, and price point are leveraged when it comes to segmentation.
As you can imagine, we can go on and on with the number of potential segments. The point here is to zero in on the best segments, and you can only learn that over time. For example, if you only sent to shoe buyers, you could be leaving a huge amount of revenue on the table by not hitting shoe browsers or email clickers. The more segments you consistently identify and test out, the more your emails will resonate with that segment.
Historically, you may have identified a great number of segments in the past. Segmentation is probably the easiest pillar to conquer; you can probably visualize a whole bunch of fantastic personas, cohorts, and segments that would be a fit on paper.
I’ve faced many situations where brands think that their product will resonate with everyone and then fall back into a spray and pray perspective. Brands may go into a wishful thinking mode and assume that if we email everyone, the email may stir up some interest. I refer those clients back to the Pareto Principle.
Know this: the more segments you create, the longer it will take to execute. Try picking two or three incremental segments that you may never have tried and send them the campaign. Measure the results and try again. Keep iterating on new segments instead of just sending dozens of segments all at once. Break it down into manageable chunks for your team to execute.
Congrats! You’ve now identified the right people for this message. Now, it’s time to personalize the message to the segment.
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