Good segmentation is what turns a superficial statistic into a business metric that drives decisions. Want to know who your most valuable customers are? What your most valuable marketing channels are? Which of your products are moving faster and why? To get to any of these answers, you have to start by segmenting your data.
In this blog post, I’m going to share some critical segments that we often recommend to our customers. I’ll also go into detail on what questions these segments can help you answer.
User segments help you understand who your users are and how they behave.
- Age / Birth Year: How old are your users? How old are your most active users? It usually makes sense to bucket the values into ranges for more effective analysis.
- Gender: Do men and women engage with your website differently?
- Address: Where do your users come from? Should you focus your marketing efforts on a particular region? Have your recent advertising campaigns performed as expected in your target regions?
- Customer acquisition source: Do you know what marketing channel your users come from? Did they click on an ad or find you via search? Segmenting your data by user acquisition source is the first step in optimizing your new customer acquisition. Step two is to spend more money in what’s working and kill what’s not.
- Registration device: Did users register via your mobile app or your website? iOS or Android? Is your mobile user base big enough to allocate more resources to develop your mobile product?
- Referred by: Who are your top influencers? How many users were directly referred by others?
- Industry: If you’re a B2B business, in which industries do your users work? Which trade organizations are worth joining?
- Survey responses: If you perform customer surveys, use the responses as segments for a deeper level of profiling. You can ask questions that complement what you already know about your users or confirm your guesses.
- First order amount and product category: Is there a correlation between a user’s first order and future purchasing patterns?
Orders / Events Segments
Order and event segments help with analyzing user behavior and engagement over time.
- Billing / Shipping Address: Where do most of your orders come from? Is there a difference between billing and shipping addresses?
- Status: How many of your orders failed to complete? What is the ratio of pending orders in the past 7 days?
- Customer acquisition source: Beyond tracking user acquisition data at a user level, you can also track the it on an order or event level. A user that registered via one source may very well continue to access your site via other sources.
- Device: Are the number of mobile orders increasing? How much of your revenue is currently generated via mobile purchases?
- Fulfillment Center: Which one of your fulfillment centers is generating the most revenue? If you’re analyzing the difference between order time and shipping time, which fulfillment center is most responsive?
- Delivery Carrier: Which is the most popular carrier? Which carrier has the least number of returned items?
- Discount / Coupon Codes: Are your promotions actually generating extra business? How many extra items did your customers buy in addition to the item on sale? How do coupons affect your average order value? What’s your average margin on discounted vs. non-discounted items?
- Satisfaction / Rating: How satisfied are your customers with their orders? Are your customers likely to refer business to you?
Product segments help you make merchandising decisions.
- Merchant / Brand: Is one specific brand selling faster than the rest? Which brands are under-performing?
- Type / Category: Do different user segments enjoy different types of products? Which product categories generate the most repeat business?
- Discount / Coupon Codes: Are promotions hurting sales of non-discounted products? How do coupons affect the perceived value of your products?
- Social activity: Is there a correlation between the buzz generated on social media and the quantity sold for a product?
- Size / Variant: What is the ratio of inventory that you need of each variant? Which variants can be sold at discount rates?
If you’re interested in merchandising, check out a blog post where I explore how to use product segments to drive repeat business.
Establish Customer Profiles
Segmentation experts may want to move beyond one-dimensional slices and begin establishing real customer profiles. For example, people between ages of 13 and 24 that registered via a mobile device put in a group “Young & Mobile”. How does this group’s behavior compare to the rest of your user base?
This type of analysis is what marketers at Fortune 1000 companies do all day. Prior to the advent of cloud-based business intelligence platforms like RJMetrics, it was largely out of reach for the rest of us. Fortunately, that’s no longer the case.
If you’re an existing customer and want to improve your segmentation, just contact our support team. If you’re not a customer but want to learn how to slice and dice your data like an Iron Chef, we’d be happy to tell you more.