In (online) marketing, segmentation is about forming homogeneous groups out of the entirety of (potential) customers and treating them according to their needs. The aim is to address and serve customers more profitably in the long term.
A customer segment is defined by the classifiability of the customers (why was the customer assigned to a certain segment) and by the translatability of the measure (with which strategy/measure can the customer be addressed efficiently).
Types of segmentation
Segments can be formed in different ways and based on different data (e.g. from the CRM system).
1. Segmentation by marketing channel
→ User is identified as Click-In User
2. Segmentation by website behavior
- Dwell time
- Average number of pages visited
- Exit on certain pages
- Pages visited (home page, detail page, categories etc.)
- Users, who scroll far
- People who reached the shopping cart
- Exits from the shopping cart
- Sessions (first user / return user)
3. Segmentation according to buying behavior
- New/existing customer
- Categories in which someone buys
- Shopping cart value
- Number of sales
- Last / first purchase
- Total purchase value
- Abandoned purchase
- Products in the shopping cart
4. Segmentation by demographic characteristics
- Geolocation (city, country, postal code)
- Age (e.g. generation z, baby boomer, etc.)
5. Segmentation by personas
- The bargain hunter
- The quality-oriented buyer (identifiable by brand, price and, if applicable, material)
- The insecure one (high dwell time, does not put anything in the shopping cart, shopping cart abandoned, etc.)
6. segmentation by terminal or device group
- iPhone, iPad
- Android, windows phone
7. Segmentation by external factors
- Weather and temperature
- Season (spring, winter)
- Special sales events
- Other events
Segmentation allows a more targeted control of advertising campaigns and onsite actions. Accordingly, it is also essential for the personalization of websites and online shops. Whether segmentation is effective should always be tested using A/B- or multivariate tests.
When talking about segmentation, a distinction should also be made between static segmentation and dynamic segmentation. Static segmentation classifies users into specific groups based on their previous actions (e.g. newsletter subscription) or characteristics (e.g. postcode). Dynamic segmentation, on the other hand, assigns users to groups in real-time. A user can move from one segment to another with a single click.