5 Common Customer Segmentation Mistakes
Customer relevance is crucial, with Accenture’s research showing that 25% of consumers would stop patronizing a brand they find irrelevant. Many retailers turn to customer segmentation as a solution. However, misallocated resources often lead to poor returns. Rakuten Marketing’s global study of 1000 marketers reveals that approximately 26% of marketing budgets are squandered on ineffective channels and strategies. This article explores common customer segmentation mistakes in retail and provides insights on avoiding these pitfalls to boost your bottom line. What is customer segmentation? Customer segmentation involves categorizing a company’s clientele into distinct groups sharing similar traits. This allows businesses to tailor their marketing efforts more precisely and effectively. For B2B markets, segmentation criteria may include: In B2C markets, common segmentation factors often revolve around demographics such as: By understanding customer behavioral segmentation, companies can create more targeted and effective marketing campaigns, improve customer satisfaction, and increase overall profitability. However, there are always customer segmentation mistakes that we must know. Common Customer Segmentation Mistakes Common customer segmentation mistakes include over-segmentation, which creates too many small, hard-to-manage groups, and under-segmentation, which results in a one-size-fits-all approach. Ignoring data or using outdated information can lead to inaccurate segments, while failing to regularly update segments overlooks changing customer behaviors. Solely focusing on demographics without considering behavioral, psychographic, and geographic factors can result in an incomplete understanding of customers. Additionally, lacking clear objectives and ignoring customer feedback can hinder the effectiveness of segmentation efforts. Overlooking communication preferences Your customer base likely has diverse communication habits. Some may be social media enthusiasts, while others prefer phone calls, emails, or chatbots. Understanding these preferences is crucial for effective segmentation. A common customer segmentation mistake is failing to account for these varied communication preferences, which can lead to ineffective marketing strategies and reduced customer engagement. By identifying each group’s preferred communication method, you can tailor your outreach strategies accordingly. This targeted approach increases the likelihood of customer engagement. For example: Neglecting timing considerations For businesses with a global customer base, launching campaigns simultaneously across all regions can be counterproductive. A common customer segmentation mistake is not considering time zone differences, which can result in communications arriving at inconvenient times, such as the middle of the night. It’s crucial to segment your audience by region and schedule campaigns accordingly to maximize engagement and effectiveness. To maximize effectiveness, segment your audience based on geographic location and corresponding time zones. This approach allows you to schedule campaign deliveries at optimal times for each group. Overlooking current data Customer dynamics are in constant flux. The high-value segment that yielded substantial returns on your campaigns half a year ago may no longer perform as well. Likewise, your most engaged social media followers today could be different from those a few months back. This shift occurs because your brand evolves over time, and so do your customers. These changes influence their purchasing preferences, interests, and responses to your marketing efforts. Failing to account for these dynamics is a common customer segmentation mistake, as it can lead to outdated strategies that no longer resonate with your audience. Regularly updating your segmentation criteria is essential for staying relevant and effective. Not aligning segmentation with your overall business goals Failing to align your customer segmentation with your overall business objectives can be counterproductive. Your segmentation criteria should be closely tied to your specific, high-priority goals, whether that’s converting more occasional shoppers into loyal customers, increasing average order value, reducing product returns, or boosting app downloads. Neglecting this alignment is a common customer segmentation mistake that can lead to wasted efforts and missed opportunities. For instance, if your key objective is to enhance brand loyalty, your marketing efforts should be tailored to target infrequent customers or those who have yet to engage with your loyalty program. Segmenting based on instinct and not data Creating customer profiles based on demographic information, interests, and preferences can certainly benefit your marketing efforts. However, it’s important not to rely solely on this approach. Analyzing the results of your past campaigns can provide valuable insights that may contradict your initial assumptions. The customer segments you expected to perform well might not actually do so, while the ones you initially thought were less valuable could end up delivering better returns. Overlooking this analysis is a common customer segmentation mistake, as it prevents you from making data-driven adjustments to optimize your marketing strategies and improve overall performance. Customer segmentation mistakes due to insufficient data A common pitfall for marketers is creating customer segments based on limited or incomplete data, often leading to inaccurate results. Google’s research reveals that about 61% of marketers struggle to obtain the data they need. To avoid customer segmentation mistakes, prioritize gathering thorough customer information before implementing it in your strategies. For instance, if you operate an accessories store aimed at teenagers, ensure you collect accurate data on your customers’ age demographics. This will help you create more effective and targeted marketing efforts that resonate with your intended audience. Segmenting too broadly Creating overly broad segmentation criteria can lead to inconsistent behavior patterns within a single group. When your categories are too generic or wide-ranging, you’re likely to encounter significant variations among members of the same segment. To enhance effectiveness, it’s crucial to refine your criteria and make them more specific. A common customer segmentation mistake is using overly broad criteria. For example, if you run an online grocery store, simply targeting all customers who have made food purchases online in the last six months is too broad. This generic approach fails to account for important distinctions within your customer base, such as preferences for organic products, frequency of purchases, or dietary restrictions. Overly specific segmentation While broad segmentation has its drawbacks, excessively narrow criteria also present challenges. Highly specific segmentation requires extensive customer data for evaluation. Even if you obtain detailed information, overly granular criteria can lead to numerous segments, increasing data management complexity. A common customer segmentation mistake is breaking down information to such a degree that it
9 Best Automation Apps For Shopify Stores
As an entrepreneur, you are too busy with getting the task done on time. And there’s only that many hours a day. Thus, the only thing you can do to boost efficiency is to make every hour more productive. This is why having the best automation apps are one of the most important determinants of your success, as they allow launching actions according to the pre-recorded time and procedure. Yet how do you know which tools are well-suited for your team? Before choosing a tool, it is essential to have full insights on how your team is working, which processes you’re going through, and what bottlenecks are holding you back. Shopify App Store consists of more than 1000 software with multiple features. This huge number can confuse any user if you have not thoroughly understood their differences. To help store owners make a wise decision, we shortlist them to 10 apps in terms of conversion optimization, marketing, inventory management, and so on. Also – we’ve added a bonus app that enables you to automate and integrate all the apps you use every day! Marketing automation apps 1. Klaviyo 40% of customers would buy more from a retailer who personalizes their shopping experience. Klaviyo offers a means to keep in touch with customers via shopping cart abandonment reminders and newsletters. With listening tools and best-in-class segmentation, each email is personalized based on any characteristics, event, metric, and even location, allowing buyers to relate themselves to the brand. Key features: Multiple channels integration such as Facebook, ShipStation, Yotpo, Privy, etc in one marketing workflow Use Flow Builder to automate messages across the customer journeys and pre-built template to optimize testing and distributing Detailed analytics into every single campaign Price: Free 2. Omnisend Started as a solution for email marketing, nowadays Omnisend has added more channels to their app, ranging from push notifications to SMS, Facebook message, and so on. It has become one of the best marketing automation apps for Shopify merchants. Instead of sending out every single email, your staff can set up automated workflows to communicate with your customers. This way your team can save time and resources and focus on leveraging your revenue. Key features: Easy drag-and-drop email builder and a bunch of ready-made templates Smart segmentation based on customers’ shopping behavior and other properties for maximum target precision Integrate SMS and push notifications with your email to provide an omnichannel customer experience Price: Free: 15.000 emails per month Best value: $99 per month allowing for 15.000 emails, web push notifications, advanced reports, customer success managers, and so on. Sales channel optimization apps 3. Google Shopping Google Shopping integrates your Shopify store with Google Merchant Centre to display your product wherever your customers, be it Youtube, Gmail, Search, or across the Display Network. Key features: Sync the products in your Shopify store with the Google Merchant Centre to create a Google Product Feed. Any change in your Shopify store will result in an automatic update in the Google Merchant Centre. Smart Shopping campaign that automatically optimizes the time and places your ads are shown in accordance with your daily budget Price: Free 4. Buy Button Channel Buy Button allows you to create a buy button for any product and add to your Shopify store. With this button, you can direct your customers to checkout pages or link it to any email, direct message, or social media post. Key features: Create a buy button with custom fonts, colors, and layouts Create fast and easy checkout links to promote the product Track sales using Home sales overview and Analytics page Price: Free Customer service automation apps 5. YOTPO One way to make your brand stand out among competitors is to generate positive reviews from your customers. The more appreciation you have, the higher trust shoppers have in your brand, and the higher traffic and conversion you might drive. YOTPO is a leading eCommerce platform that has helped many brands like Rebecca Minkoff, MVMT, and Steve Madden to collect reviews, ratings, and user-generated content. Key features: Collect product reviews, ratings, site reviews, and photos using automatic review emails or directly on-site Reviews Widget Showcase customer reviews, photos, and Q&A on your homepage, product pages, at checkout, and across your social channels Import your existing reviews only with a single click Price: Free plan including all basic feature Growth plan starting at $19 per month 6. Tidio Would you want to attract more customers? Do you like to capture customers’ interest whenever you go to your store? Or do you want to take full advantage of this marketing form? Tidio is among the best automation apps that integrate live chat, Bots, and marketing automation to meet the needs of the most demanding Shopify owners. Key features: 24/7 response to your customers with the help of Bots Always able to thank your customers via email or Messenger integration Instant set up with modern widget design that suits any website Price: Free basic plan Paid plan depends on the communication channel Order and delivery management automation apps 7. ShipStation ShipStation powers shipping success of all kinds, regardless of location, means, and product sizes. It implements global delivery from Shopify store to end consumers via 40+ carrier services across the US, UK, Canada, and Australia. In just a few clicks, you can import the data and have your product transferred to every customer. By automating this product, ShipStation frees up your time to spend on business growth instead of sourcing and shipping product. Key features: Combine, split, edit, and filter orders according to product details such as item use, SKU, weight, and images Add multiple delivery options to your website so that your customers can choose their preferred shipping method Connect with your customers after purchase via tracking page and return portals Price: Starter plan costs $9 per month limited by 50 shipments each Most popular is the $69 gold plan allowing for 3.000 shipments per month, up to 3 users, and community support service
