Customer Segmentation

Why customer segmentation and knowing your customer is so important. A while back I ran an online survey to find out how possible paying customers perceive the web shop’s usability and branding. The web shop sells fast moving consumer goods.

The response of the targeted group of people was over 40%. The overall feed back on usability, and branding was negative. Based on the outcome of my research I advised the web shop to start optimising their usability and rebrand the entire shop.

Different target groups
My advice was not followed up. Regardless of the negative feedback from my respondents, analytics showed no significant increase in bounces, nor did it show a decrease of conversion.  Furthermore, no significant negative customer feed back was to be read in the shop’s questionnaire, nor was it on the price comparison sites and social media platform. Even worse (!), most people considered the site to be beautiful and very easy to use. So was the feedback from my group of respondents so different?

Know your existing customer before attracting new ones!
Comparing existing customers with the group of people who answered the questions in my survey made me realise the things I did wrong: First and foremost, I should have gained a better insight in the group of existing customers who were mostly workers without a university background. Second, I should have targeted people outside my network who are more like the existing group of customers without a university degree.

Optimise & Attract
My initial motivation of the survey was obviously improving sales by a combination of site optimisation and the attraction of new customers. My final mistake was looking for new customers in the wrong group of people.

Fast & Easy
The web shop targets a customer group that is interested in fast and easy and that demands low threshold customer support. (i.e. answers to the more obvious site elements such as navigation, paying process etc.) After reviewing the web shop’s support I found out that it was truly top-notch. Customer service was to be reached 24/7 and the level of information put out was congruent with the educational level of the customers.

Know and value your customers

In other words, the web shop’s strategy wasn’t so much keeping customers by creating a perfectly branded, usable web shop. The strategy was to keep a well paying, satisfied customer segment that demands information on an average level and is only interested in low prices, in a low threshold and somewhat cheaply looking web shop. If I had reached potential new customers from that particular segment, I would have probably got feed back that might have led to the main objective: conversion growth.