In the competitive ecommerce landscape, the battle for new customers is relentless but seasoned...
In the ecommerce world, segmenting your email list is an absolute must for scaling Direct to Consumer (DTC) and Consumer Packaged Goods (CPG) brands. Segmentation in email lists simply means diving up your email list according to shared user attributes such as location, feedback, interests or other.
Effective segmentation will help ecommerce brands understand their customers better and make their customers feel truly heard and valued, resulting in an increase in conversions, brand loyalty and lifetime value (LTV).
Here are 10 more advanced segments (and sub-segments) that all ecommerce brands should consider implementing -
1. Lapsed Customers
Lapsed customers on average are defined as customers that haven’t made any repurchases or engaged with the brand in over 6-12 months.
Lapsed customers are an untapped Lifetime Value (LTV) goldmine for DTC brands. A customer’s absence for over a year after making a purchase gives a brand an opportunity for re-engagement and/or feedback which in turn directly translates into either a better customer experience or increased revenue.
Here’s a straightforward approach to bring them back into the fold:
Initiate a Direct Re-engagement Effort: Send a personalized email expressing that you’ve noticed their absence and invite them back to browse your latest offerings. Ensure the message conveys value and relevance to their interests.
Get Constructive Feedback: Ask why they’ve stopped purchasing. Use a short, easy-to-complete survey to gather insights or ask open-ended questions. Understanding their reasons can help tailor your offerings and prevent future customer attrition.
Offer Incentives: Based on the feedback you’ve gotten or if you don’t have any responses yet, offer targeted incentives that address their concerns or past purchasing barriers. This could be exclusive discounts or early access to new products.
2. Convertible Window Shoppers
Convertible window shoppers are those who frequently visit your site and add items to their cart but don’t proceed to checkout.
This segment represents a significant opportunity for DTC brands to convert interest into sales, directly impacting revenue and LTV. These customers have shown interest but need an extra nudge to complete their purchase.
Here’s how to effectively convert them:
First Offer Reminders: Start by sending a personalized email reminding them of the items in their cart. Highlight the benefits or unique features of the products to rekindle their interest. Make sure the communication is timely and relevant.
Provide Discounts as a Nudge: If reminders don’t convert them, add discounts or special offers as an incentive. Tailor these offers to the products they showed interest in to maximize the likelihood of conversion.
Seek Feedback for Non-Conversion: For those who still don’t convert, reach out to ask for feedback. A short survey or a direct question about why they didn’t complete the purchase can provide valuable insights. This information can help you adjust your strategies to prevent future cart abandonment.
3. First-Time Buyers
First-time buyers are those that have recently made their first purchase from your brand.
This customer segment is essential for DTC brands as they serve as the foundation for future loyalty and an increased Lifetime Value (LTV). Their initial purchase marks the beginning of their relationship with your brand, offering a solid opportunity to enhance their experience and encourage repeat business.
Here's how to capitalize on this opportunity:
Offer Upsells/Cross-Sells: After their first purchase, introduce them to related products or upgrades that complement what they bought. Tailor these recommendations to align with their initial interest, enhancing the chances of additional purchases.
Solicit and Utilize Feedback: Shortly after their purchase, reach out to first-time buyers asking for their feedback on the shopping experience and the product(s) they received. This not only shows that you value their opinion but also provides insights into their preferences and potential improvements for your offerings.
Reference Their Feedback in Future Interactions: Use the feedback provided to personalize future communications. Referencing their specific comments or suggestions in follow-up messages demonstrates attentiveness to their needs and can strengthen their connection to your brand.
4. Loyal Customers
Loyal customers are those that purchase regularly at predictable intervals.
For DTC brands, loyal customers are the backbone of sustainable success, as they are the path to high Lifetime Value (LTV) and stability in revenue streams. Their consistency is not just a sign of satisfaction but also an opportunity for brands to reinforce and reward their loyalty.
Here’s a strategy to ensure their continued engagement and satisfaction:
Tailor Upsell and Cross-Sell Opportunities: Leverage the predictability of their purchasing patterns to introduce upsells and cross-sells that resonate with their known preferences. This could involve recommending products that complement or enhance their previous purchases, ideally timed with their usual buying cycle.
Offer Exclusive Discounts for Pattern Breaks: Monitor their purchasing behavior for any deviations from the norm. If a loyal customer unexpectedly pauses their regular purchases, reach out with personalized discounts or offers to re-engage them. This not only shows that you’re paying attention but also values their continued business.
Maintain a Dialogue: Keep the lines of communication open with loyal customers through regular updates about new products, company news, or loyalty programs. This ongoing dialogue ensures they feel connected and valued by your brand, reinforcing their loyalty.
5. High-Value Customers
High-value customers are those that consistently purchase premium products or have high-order values.
Identifying and nurturing high-value customers is essential for DTC brands, as they significantly contribute to the Lifetime Value (LTV) and profitability of the business. Their preference for premium products or larger orders marks them as key contributors to your revenue which means a tailored approach to maintain and enhance their engagement is required.
Here's how to maximize their potential:
Provide Exceptional Service: Ensure that high-value customers receive top-tier customer service at every interaction. This includes priority support, personalized assistance, and exclusive access to customer service resources. Their experience should reflect the high value they bring to your brand.
Reserve Discounts for Strategic Moments: While high-value customers are accustomed to premium pricing, offering discounts during strategic moments can enhance their loyalty without undermining the perceived value of your products. Use these incentives judiciously, such as to re-engage them if their purchasing patterns change or to celebrate a milestone in their customer journey.
Customize Communication: Tailor your communication to acknowledge their status as high-value customers. This could involve personalized emails, exclusive updates, or early access to new products. Demonstrating that you recognize and appreciate their contributions can solidify their loyalty and encourage continued engagement.
6. Churned High-Value Customers
Churned high-value customers are those that were previously high spenders but haven't made recent purchases.
Re-engaging churned high-value customers is crucial for DTC brands, as reactivating a former high spender is often more cost-effective than acquiring a new customer of similar value. Their prior high-order values or preference for premium products indicate a significant loss in potential Lifetime Value (LTV) when they churn.
Here’s a targeted approach to win them back:
Initiate Targeted Re-engagement Campaigns: Craft personalized re-engagement campaigns that acknowledge their previous high-value status. Highlight new offerings or improvements made since their last interaction, aiming to spark their interest anew.
Offer Tailored Discounts: While these customers were once less sensitive to price, a well-placed discount can serve as a powerful incentive for their return. Ensure these offers are personalized and reflect an understanding of their past preferences and value to your brand.
Solicit and Act on Feedback: Reach out to understand their reasons for churn. Use a personalized approach to ask for feedback, showing genuine interest in their experience and suggestions for improvement. Demonstrating that you value their input and are committed to enhancing their experience can help rebuild trust and loyalty.
7. Category Loyalists
Category loyalists are those that frequently purchase within specific categories.
For DTC brands, category loyalists are a unique segment that consistently demonstrate interest in particular product lines / categories. Their repeat purchases within these categories highlight their potential for Lifetime Value (LTV) growth through targetted engagement.
Here’s how to leverage their loyalty to specific categories for increased LTV and conversions:
Promote Related Cross-Sells and Upsells: Identify opportunities to introduce category loyalists to related products or higher-value items within their preferred categories. Tailoring suggestions that complement their interests can encourage broader exploration and increase order values.
Highlight New Arrivals and Innovations: Keep category loyalists informed about new arrivals, improvements, or expansions within their favored categories. Early access or exclusive previews can heighten their engagement and reinforce their loyalty.
Engage with Tailored Content: Create and share content that resonates with the interests of category loyalists. This could include how-to guides, product usage tips, or customer stories related to their preferred categories. Engaging content not only enriches their experience but also positions your brand as a valuable resource in their area of interest.
8. Discount Driven Buyers
Discount driven buyers are those that mostly just purchase with discounts or during sales.
Targeting discount driven buyers effectively can significantly influence both immediate sales and long-term Lifetime Value (LTV) for DTC brands. While their purchase behavior is motivated by savings, there are strategic ways to elevate their value beyond discount only transactions.
Here’s how to engage and potentially convert them into regular-priced purchasers:
Introduce Lower Ticket Items at Full Price: Gradually introduce discount driven buyers to lower-priced items not on sale. Highlight the value and quality of these products to encourage purchases outside of sale periods, nurturing a perception of worth beyond the discount.
Leverage Exclusive Offers: Create exclusive offers for this segment that provide a sense of special access or insider advantage. Even if discounts are part of the equation, personalize the promotion to make them feel valued beyond just seeking deals.
Regularly Promote During Sales Events: Acknowledge their preference for discounts by making sure they’re the first to know about upcoming sales or clearance events. Use these communications to subtly introduce full-priced items that complement discounted purchases or showcase the broader value of your brand.
Gather Feedback on Purchasing Motivations: Understand what drives their discount-only purchasing behavior. Use surveys or feedback forms to gather insights, then tailor your strategies to address those factors, whether it’s product pricing perception, budget constraints, or value association.
9. Upsell Candidates
Upsell candidates are regular purchasers of entry-level products with potential for higher-value item upsells.
For DTC brands, upsell candidates are a promising segment for increasing Lifetime Value (LTV) by gradually moving them up the value ladder. Their consistent engagement with entry-level products demonstrates brand trust, making them qualified for strategic upselling.
Here's a methodical approach to converting these candidates into premium purchasers:
Identify Upsell Opportunities: Analyze purchase history to identify products that serve as natural upgrades or complementary additions to what these customers have already bought. Ensure these upsell offers align with their interests and past purchasing behavior.
Time Your Upsell Offers Strategically: Introduce upsell offers either just before they're due to make another purchase or shortly after their latest purchase. This timing ensures your offer is relevant and top of mind, increasing the likelihood of acceptance.
Incentivize Upsells with Exclusive Discounts: To encourage the leap to higher-value items, offer exclusive discounts or bundle deals that are only available with the upsell. This tactic lowers the perceived risk for the buyer and enhances the value proposition of the higher-priced product.
Communicate the Value Clearly: In your upsell communications, clearly articulate the benefits of the premium product over the entry-level one. Highlighting features, benefits, or customer testimonials can help the customer visualize the value of upgrading.
10. Feedback Providers
Feedback providers are those that have actively engaged with your brand by offering their insights, complaints, or suggestions.
DTC brands need to be leveraging this engaged segment to increase Lifetime Value (LTV) and foster deeper relationships. Feedback providers demonstrate a willingness to interact with your brand, indicating a level of investment that can be nurtured into loyalty and advocacy.
Here’s how to approach this valuable group:
Acknowledge Their Feedback: Start by personally thanking them for their feedback. Recognition makes them feel valued and heard, encouraging continued engagement and loyalty to your brand.
Incorporate Feedback into Action: Show that you’re not just collecting feedback but actively using it to make improvements. Communicate any changes or updates made in response to their suggestions, reinforcing that their input has a direct impact on your brand.
Reference Their Feedback in Future Communications: Tailor your messages to reflect the specific feedback they provided. This personalized approach demonstrates attentiveness and commitment to enhancing their customer experience based on their insights.
Invite Them to Exclusive Feedback Panels or Beta Tests: Engage these customers in future product development or feedback sessions. Offering them a role in shaping the products or services they use not only deepens their engagement but also provides you with valuable insights from a trusted source.
A major shortcut to this segmentation is LTV.ai. Our AI automatically implements these segments for you and manually writes each email for your entire list (mentioning their location, prior feedback & prior purchases) to increase owned channel sales by 10-25%.
