Using Customer Segmentation For Building Loyalty

Jul 06, 2020

Customers are individuals with each having their unique interests and needs. You can vastly add customer loyalty to your business by approaching them as individuals. Of course, it is not practicable to address your customers' needs based on one-on-one user experience. But, creating customer segmentation can help to group customers with similar qualities so that you can tailor your communication and customer support to appeal to their interest in different groups.

In today's competitive business climate, segmentation is a must if you want to improve your marketing efforts and ultimately boost your sales. This article will explain other benefits of segmentation and how to use customer segmentation to build customer loyalty for your business.

What Is Customer Loyalty?

Customer loyalty can be defined as the customers' preference of consistently choosing one brand over their competitors. Why does customer loyalty matter? One, customer loyalty guarantees brand growth. Once customers are loyal to your brand, your business will grow even in the face of competition.

Customer loyalty can also push your profit margin upwards. Whether your price is way above market price, loyal customers would still come for your product/services because they trust you! Jeff Bezos is currently worth over $200 billion because Amazon customers have consistently patronized his platform.

So how do you measure customer loyalty? Arguably the best way to measure customer loyalty is through customer segmentation.

What is Customer Segmentation?

Customer segmentation is the act of grouping your customers based on certain similarities and differences that they share. Just any data can be used to segment your customers, including spending habits, purchase history, typical spending amounts, recurring customers, as well as the length of time as a customer.

You may also segment your customers based on demographics such as household size, ethnicity, religion, gender, age, and other factors. Another important customer segmentation may also be a geographical location.

The major essence of customer segmentation is to enable you to understand, interact, and support your customers in greater detail. With your customer information and purchase preferences handy, you can handle customer service in an informed manner and also target your marketing efforts with more precision. These aspects aid customer advocacy and build loyalty.

Strategy To Create Your Customer Segmentation;

Creating customer segments requires that you would analyze lots of information and identify important market variables that would make up the segments for your business.

While the data you collect on your customers may be any variable, it is very important to prioritize the variables that would make the best impact on the segments. For instance, a store selling apparel would profit from geographical segmentation.

Some of the strategies we adopt at Clarobi are:

Rewards for VIPs;

A VIP reward program offers an exclusive reward to your top-tier customers for their loyalty. It helps to track, identify, and rewards loyal customers and give them more reasons to spend more money on your brand.

Rewarding your VIP customers will naturally increase your brand awareness and encourage both frequent and prospective clients.

Reactivating At Risk

Before you reactivate at risk or dormant customers, it is important first to define who at-risk customers are. Dormancy may be as a result of unhappiness with product/services, customer service issues, price, or product/service quality. 

You can reactivate at-risk customers by segmenting them into account type, the behavior of risk score, as well as the duration of the dormancy. Once you establish the reasons for the dormancy, you can then put machinery in motion to start a reactivation campaign.

Push Inactive For The First Purchase

Push notification is also an effective strategy to reactivate inactive customers so that they can continue making purchases.

Clarobi - A Reliable Way To Build Customer Loyalty

In today's competitive business world, to grow your business and beat the competition, finding and keeping loyal customers is a no-brainer. Recently, there has been an upsurge in methods to aid customer loyalty. Experts even agree that customer segmentation creates happier and loyal customers.

At Clarobi, we can provide you with the tools and give you the required legwork to gather your customers' data to provide them with bespoke services. We segment customers based on their in-store activities such as VIP, at risk, once buyers, multiple buyers, and inactive buyers.

Maintaining customer loyalty and keeping customers happy is our USP. We would help you understand your customer behavior, track data, and make even better business decisions. Plus, our solutions constantly monitor your marketing efforts and sales data to detect anomalies and trends so that nothing passes unnoticed.