Magento Customer Segmentation for Proactive Online Store Management

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In this tough competition, it is not a sensible approach to implement the same tactics for your all kind of the customers assuming that everyone will be interested in buying what you are selling. One-size-fits-all technique is obsolete now. To outreach the diversified customers of today, it is beneficial to divide them into group of individuals with similar marketing-based properties like age, interests and spending habits.

This marketing strategy, broadly classified as customer segmentation, allows the online stores to target group of customers. Thereafter, their major intent remains to target all their marketing efforts for particular segments to improve their position in the eCommerce market.

The customer segmentation extension helps split the customers into fine segments; these segments can be used thereafter in other extensions. In general, the customers might fall under few segments where extensions allow creating segments as per the predefined rules. They work with both registered and non-registered customers.

In this post, we will shower some light on the types of customer segmentation, user tiers and user groups.

Customer segmentation revolves around 3 basic types, namely-

1. Customer segmentation based on demographics.  It is quite useful for online store management. A good example can be, if you are noticing a high percentage of foreign visitors on a website, it proves that it requires language options. Digging deep, customers within one demographic segment might have different shopping behavior. For example, people of the same age or gender may vary as per the time they spent in an online store or the average amount of purchases.

2. Psychographic segmentation.  It is yet another powerful tool for distinguishing the multifarious customer base. You can divide customers as per their response to the environment change. Those who are focusing on environmental concerns can be provided with more respect and loyalty whereas the “unconcerned” customer segment is not offered with worth promotions irrelevant to their mindset.

3. Shopping behavior.  It depicts different approaches of customer segmentation as it focuses on the behavior aspects you want to analyze. Like benefits sought, loyalty to the brand, Occasion like any seasonal behavioral patterns, status of a customer lifecycle, buyer readiness stage, product usage rate and many more likewise.

User Tiers and Their Usage

Assigning user tiers is a segmentation method that differentiates the customers visiting your website into different groups that are more manageable. If once assigned, customers of a certain tier can be overseen all-at-once. It is invaluable while organizing the registered users of your website so that it can match your E-commerce strategy.

With Magento platform, it becomes easy to create user tier and segmentation options for the stores to reap the maximum advantage. It is intuitive in nature due to its wide suite of default management features plus additional features embedded via third-party extensions.

The user tiers are majorly used by B2B eCommerce store customers that sell products which are marketed towards other businesses. The benefits can extend up to segmenting users as per their likelihood of purchase and even dividing customers by analyzing how their online behaviour meets the sales strategies.

In terms of benefits, the first step that tiers do is to differentiate between the business and general users. The stores which are selling to general public as well as businesses can easily create a gap between normal costs for consumers and wholesale prices of business accounts. Here, the exact listings are visible only to the registered customers.

Similarly, user tiers effectively involves in targeted marketing campaigns that focuses on products as per the taste of a customer. When users are broken down into groups as per their purchase history and browsing behavior with a motto that right products will be marketed to the most appealing people.

So, how customer groups are different from customer segments?

The customer groups in Magento come into existence when a store is selling to other businesses. A B2B entrepreneur in general demands its customers to have an account on their store. They can either be a registered or non-registered user. The customer groups and segments can be considered differently due to the way each construct will be used effectively.

The community edition of Magento cannot hold customer segments whereas enterprise editions are capable of doing this. The segments are the marketing tool with which it is easy to define customer set as per the variety of attributes or behaviors. Customers can be put on multiple segments as per their purchasing profile unlike the customer groups where this type of customer targeting is not allowed.

The customer groups offer a high-end control over product pricing and promotion. With wide marketing opportunities offered by these groups, they are the best asset for wholesale and B2B merchants.

What To Conclude

The overall implementation of customer might seem tough at first sight but it will be a less troublesome task once you dive deep into the actual process. Analyze your customer base and then plan segments to implement the process with ease. The segmentation in Magento web development involves regular updates.

Above all, you can use the customer behavior as an integral information to adapt marketing activities as per the changing needs. What a segment actually demands gives birth to the need of a customized approach along with creating extraneous marketing strategies.

About Author: This post has been penned down by Paul Schroer who is an expert Magento developer and writer at PSDtoMagentoDeveloper. He loves writing informative blog posts that can help readers to a large extent in managing their web store containing several stores.
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