eCommerce customer micro-segmentation strategies enable marketers to achieve deeper customer understanding and accurately predict customer behavior and get the most of their marketing.
What is Customer Micro-Segmentation?
Customer micro-segmentation is the practice of segmenting your customers into small groups relevant to a particular vertical. The goal of segmenting your customers here is to decide how you can relate to customers in each segment in order to maximize the value of each customer to your business.
Micro-Segmentation is a more advanced form of segmentation which groups very small numbers of customers into extremely targeted segments, based on various factors, generally including behavioral predictions. Marketers can then direct their marketing actions to each micro-segment to maximize the effectiveness of every contact with each customer.
Micro-Segment Marketing Strategies
Micro-segment marketing is simply a way to personalize all campaigns sent to a highly targeted micro-segment.
Here, you customize your messages for each individual customer in order to increase the relevancy of your communications. You tailor your messages to match the preferences of your audience as well as send offers that they will most likely engage with.
All of these actions result in driving engagement, increasing retention, and increasing your revenue.
Micro-Segmentation Using RFM Analysis
In order to make better use of a micro-segmentation, you should know where a user is in your customer lifecycle. And this can be done automatically within RFM Analysis. Some questions that RFM answers:
- When was the last time the user launched the app? (Recency)
- How often does the user return to the app? (Frequency)
- Has the user purchased anything? (Monetary value)
Based on the answers to the above questions, you can personalize your campaigns even further. For example, a frequent buyer may simply need to be updated about the latest offerings in your catalog. Meanwhile, a user who has only launched the app once might need a better explanation of the app’s benefits and features so they return to it more often.
Micro-Segmentation Using Intent-Based Segments
Intent-Based Segmentation is a feature that makes use of AI-enhanced predictive capabilities to estimate the likelihood that users will achieve a defined goal.
Say you identify a general demographics segment for “users living in New York” and create a goal to “Sell Taylor Swift concert tickets by January 30.” You can use Intent-Based Segments to show how many of your New York-based users are likely to buy tickets.
By splitting your audience into micro-segments like “Most likely,” “Moderately likely,” and “Least likely,” marketers can then take a very clear next step: leaving the “Most likely” alone to buy without expending further marketing resources, and instead focusing campaign efforts on converting the “Least likely” and “Moderately likely” to buy.