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How Targeted Segmentation Boosts E-Commerce Sales: A Case Study

Sep 13, 2024

Ever feel like you're shouting into the void with your email campaigns? You're sending email after email, but only getting crickets in return? Well, we've got a little secret for you: It’s not you—it’s your audience. Specifically, you’re not targeting the right audience.

What if we told you that with a bit of segmentation, you could increase your average order value by 20% or more? Sound too good to be true? It’s not. That’s exactly what happened when we applied a hyper-targeted segmentation strategy for one of our e-commerce clients. And today, we’re sharing the juicy details with you.

Grab a coffee, because by the end of this post, you’ll be ready to start segmenting like a pro and driving more revenue from your email list.

 

What is Targeted Segmentation Anyway?

Before we dive into the specifics of our client’s success, let’s get on the same page about what segmentation actually is. Simply put, segmentation is the process of dividing your email list into smaller, more defined groups based on factors like purchase history, engagement, or demographics.

Why does this matter? Because not everyone on your list should get the same email. A first-time buyer and a VIP customer are in very different stages of their journey with you. They need different messages, different offers, and different levels of TLC.

Segmenting your list allows you to send hyper-relevant messages that resonate with each specific group—boosting open rates, click-through rates, and yes, even sales.

 

Our Strategy: Segmenting for Success

For this campaign, we took our client’s email list and divided it into strategic segments based on purchasing behavior. Here are some of the segments we worked with:

  • VIP Customers: These are the cream of the crop, the customers who keep coming back for more. We sent them exclusive, early-bird access to sales and special events. This segment alone brought in $773.35 in revenue from a single email campaign. Their placed order rate? A solid 0.0066.

  • Purchased within 365 Days: This segment targets customers who have purchased in the last year. The best way to boost sales is to retarget current customers. So that's exactly what we did. Though their placed order rate was a modest 0.0026, this group still generated $1,105.94 in total revenue. 

  • Brand Enthusiasts: These are your fans. They've purchased a few times, but maybe not at quite the average order value you hoped for. By sending them highly engaging, branded content, we achieved an order rate of 0.021 and brought in $600.12.

Now, why did this work? It’s simple. Each email was tailored to the needs and preferences of the segment. The VIPs got exclusive offers, the dormant customers received a re-engagement push, and the brand enthusiasts were kept in the loop with exciting, value-driven content. No more one-size-fits-all emails here.

The Numbers Don’t Lie: Real Results from Segmentation

Alright, let’s talk numbers because data never lies. Here's a breakdown of the performance from this segmented approach:

Segment Placed Order Rate Total Placed Order Value Avg Ordered Product
VIP Customers 0.0066 $773.35 3.5
Purchased 365 Days 0.0026 $1,105.94 3.8
Brand Enthusiasts 0.0210 $600.12 5.0
Purchased 2+ Time 0.0059 $3,607.62 6.57

As you can see, even though the Purchased 365 Days segment had a lower placed order rate, the overall revenue was impressive. And the VIP Customers segment, while smaller, had a higher conversion rate—proof that high-value customers are worth the extra attention.

How to Implement Segmentation in Your Own Campaigns

Feeling inspired? Good. Here’s how you can get started with segmentation today:

  1. Analyze Your Customer Data: Look at past purchase behavior and engagement data. Identify who your VIPs are, who’s been inactive, and who engages the most with your brand.

  2. Create Customer Segments: Break down your email list into groups based on behavior (like Purchased 365 Days or VIP Customers). Remember, the more tailored the group, the more personal you can be with your messaging.

  3. Customize Your Emails: Develop tailored content for each segment. Your VIPs want exclusivity, while your dormant customers need an incentive to come back. Make sure each segment feels like you’re speaking directly to them.

  4. Test & Adjust: Segmentation is not a set-it-and-forget-it strategy. Continuously test new segments and adjust your messaging based on results.

And if you want to get a customized segmentation strategy and an actionable 90-day plan for your e-commerce store, we have just the thing for you here. 

It’s Not Just About Sales: Non-Revenue Wins

Not every win needs to be revenue-based. Segmentation also drives engagement. By targeting specific customer groups, we saw improvements in click-through rates, open rates, and customer retention.

For example, customers in the Purchased 365 Days segment may not have purchased immediately, but re-engaging them keeps your brand top of mind. When the time comes, they’ll be more likely to convert.

Remember, engagement is a long game. And segmentation sets you up for long-term wins, not just quick, one-time conversions.

Conclusion: Why Segmentation is a Game-Changer

In this case study, we used targeted segmentation to boost order rates and drive serious revenue for our client. Whether you're working with high-value VIP customers or re-engaging dormant ones, the key is delivering the right message at the right time to the right people.

Or, if you’re ready for us to take the reins, book a discovery call here to see if we're a fit to work together. Our introductory campaign packages start at just $497 per month. 


Next up: Stay tuned for our next post where we’ll dive deep into how the timing of your emails can make or break a campaign. Timing really is everything, and we’ve got the numbers to prove it.

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