Over the course of my 10+ years working in eCom, I’ve worked with more than 20 different brands across a variety of product categories. Most of these brands had one of two approaches to customer segmentation:
- A complex model with 6-10 (or more!) segments roughly based on recency, frequency and monetary value criteria.
- No segmentation at all; everyone gets the same message at the same frequency.
Is there a significant difference in performance between these two approaches? Not really! And that’s because brands who take the first approach rarely do anything meaningful with all those segments. At most, they contact certain segments more frequently than others.
So, is segmentation a complete waste of time? Not if you do it the right way. I’m going to explain why so many brands get segmentation so wrong and outline the only segmentation framework you really need to start making some sweet, sweet incremental moolah.