What is customer segmentation and best strategies in Shopify

Learn what is customer segmentation and what are the best segmentation strategies to personalize your Shopify campaigns and contents
December 6, 2023

If your e-commerce business has clients of different ages, locations or economic backgrounds, you may find that generic marketing fall short of delivering the desired results. Building a good customer database is essential, but marketing is more than just accumulating subscribers. To truly engage your audience, you must create targeted strategies that are relevant to your customers' needs, habits and interests.

With the new built-in customer segmentation features in Shopify, you can divide your customers based on shared characteristics or behaviors. In our next article, we'll explore what customer segmentation is, why is important and what are the best strategies you can use to segment and target your audiences.

What is customer segmentation?

Customer segmentation is the process of dividing customers into groups based on shared characteristics or behaviors. This helps businesses to better understand their customers and to tailor their marketing and sales efforts accordingly with more personalized campaigns. This is what is customer segmentation.

For example, a business might segment its customers by demographics (age, gender, location, income, etc.), by purchase history (what they have bought in the past), or by interests (what they like to do). Once the business has segmented its customers, it can then create targeted marketing campaigns for each segment.

customer segmentation strategies Shopify

Why customer segmentation is important

Segmentation is a great way to improve your email marketing results and increase your engagement and conversion rates. It can also help your business improving the customer experience while providing more relevant and personalized services. Once you have segmented your customers, you can then develop targeted marketing and sales strategies for each segment. For example, personalized campaigns or personalized discounts and promotions.

Customer segmentation can help businesses in numerous ways, from a straight better customer experience to better business decision-making by understanding the needs and wants of their audiences.

What's the best customer segmentation strategy

There is not a one-fit-all answer to decide what is the best customer segmentation strategy. The best strategies for customer segmentation depend on your specific business and industry, but here are some general tips:

  • Start with your business goals. What do you want to achieve with customer segmentation? Do you want to increase sales, improve customer retention, or reduce marketing costs? Once you know your goals, you can choose segmentation criteria that will help you achieve them.
  • Use multiple segmentation criteria. No single segmentation criterion will give you a complete picture of your customers. By using multiple criteria, such as demographics, psychographics, and behavioral data, you can create more accurate and actionable customer segments.
  • Segment your customers regularly. Customer needs and wants change over time, so it's important to segment your customers regularly to ensure that your segmentation strategy is still effective.

Some specific customer segmentation strategies that you can use are:

  • Demographic segmentation: This involves segmenting customers based on demographic characteristics such as age, gender, location, income, and education level. Demographic segmentation is a good way to identify broad customer groups.
  • Psychographic segmentation: This involves segmenting customers based on their personality traits, values, interests, and lifestyles. Psychographic segmentation is a good way to identify more specific customer groups with shared interests and needs.
  • Behavioral segmentation: This involves segmenting customers based on their past purchase behavior, such as what they have bought, how often they buy, and how much they spend. Behavioral segmentation is a good way to identify customer groups that are most likely to be interested in specific products or services.

How much of this is possible to do with Shopify native segmentation features?

Shopify customer segmentation for marketing, based solely on the platform's criteria, filters, and capabilities, can be limiting. Shopify apps for audience segmentation and email marketing can help you overcome these limitations.

In another articles, we review some of the most popular customer segmentation apps that you can use to expand on Shopify's built-in features, as well how far you can go with the native segmentation Shopify features.

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