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Customer Segmentation Strategies in Retail with Salesforce Marketing Cloud

Imagine a 10-15% revenue boost simply by understanding your customers better. That's the reality for businesses that leverage customer segmentation. Generic marketing is a relic of the past. Today's consumers crave personalization, and failing to deliver can leave you with frustrated customers, lost sales, and the constant struggle to keep your retail business afloat.

Running a successful retail business is a constant act of juggling. From managing inventory to ensuring smooth delivery, there's always a new fire to put out. Generic marketing campaigns only add another ball to this already precarious juggling act. They are surefire ways to frustrate your audience and lose revenue. 

The answer? Personalized messages. They help you send the right message at the right time through the right channel. This orchestration requires a powerful digital marketing platform that combines all marketing channels in one place, and that's where Salesforce Marketing Cloud (SFMC) comes in.

SFMC is a digital marketing automation platform. Leveraging SFMC alongside the expertise of Salesforce Marketing Cloud Experts allows you to automate marketing campaigns across various channels, including email, social media, mobile apps, SMS, and websites.

While SFMC is used for a range of innovative retail marketing activities, such as email marketing, content creation and management, SMS marketing, campaign management, online advertising, and so on, this blog will focus on its powerful customer segmentation capabilities. So, keep reading to learn more about powerful SFMC customer segmentation strategies for the retail industry. 

What is Customer Segmentation? Why Is it Important in Retail?

Customer segmentation is a powerful strategy for dividing your audience into distinct groups with common characteristics. By understanding your existing and potential customers’ shared traits, such as demographics or behavior, you gain valuable insights into their needs, preferences, and buying patterns. 

This helps your marketing and sales team craft targeted campaigns that resonate better with each segment, leading to more effective outreach. Segmented emails, for instance, can get 30% more opens and 50% more clicks compared to unsegmented ones. 

Want some examples?

New parents: Targeted emails showcasing baby essentials and developmental milestones would be more relevant than promotions on men's suits.

Loyal customers: Exclusive discounts or early access to new products would likely be appreciated by this segment.

Inactive customers: Personalized re-engagement campaigns based on their past browsing habits could entice them back.

Here's how customer segmentation empowers your retail business:

1. Better Understanding of Customer Behavior

By segmenting customers based on their buying habits, you gain valuable insights into their preferences and expectations. This knowledge empowers you to design relevant marketing strategies, predict market trends, and improve customer service. 

2. Targeted Marketing Campaigns

Segmentation lets you move beyond generic advertising. Instead, you can craft targeted campaigns that resonate with each customer segment. This could be anything from a personalized email showcasing relevant products to a social media ad targeting a specific demographic. By delivering the right message at the right time, you can reduce cart abandonment and generate more sales.

3. Enhanced Customer Satisfaction

Imagine receiving clothing recommendations tailored to your style or baby essentials for your new arrival. Customer segmentation allows you to deliver personalized messages and offers that resonate with each customer group, leading to a more satisfying shopping experience.

As per Zendesk Customer Experience Trends Report 2022, businesses prioritizing personalized service can win big, with 90% of consumers willing to spend more for a tailored experience.

4. Increased Sales and Revenue

Customer segmentation lets you target the right audience with the right message, leading to a higher chance of conversions and increased sales.

5. Improved Customer Retention

Not all customers are created equal. Customer segmentation helps you craft targeted retention strategies. By offering personalized experiences and incentives, you can build stronger relationships and keep customers returning for more.

6. Cost-Effective Marketing

Customer segmentation allows you to focus your marketing efforts. No more wasting resources on irrelevant campaigns. Instead, you can target specific customer segments with relevant communication, maximizing your marketing budget.

7. Data-Driven Product Development

Customer segmentation offers valuable insights into customer preferences, needs, and buying behaviors across different segments. By leveraging this data, you can develop products that cater to the specific needs of each niche market, ensuring your offerings hit the mark.

8. Informed Forecasting

Customer segmentation is a powerful tool for predicting future trends. Analyzing customer data across different segments allows you to anticipate customer preferences and stay ahead of the curve.

How to Segment Customers Using Salesforce Marketing Cloud?

Customer segmentation promises a goldmine of insights, but unlocking its value requires navigating a sea of data. As the volume of customer information grows, the challenge of extracting meaningful patterns intensifies. 

Here's where Salesforce Marketing Cloud provides powerful automation tools to streamline this process and empower your retail marketing efforts. 

When creating campaign strategies, SFMC offers various tools and features to segment your customers’ data:

(i) Customer Segmentation Through Data Filters 

Imagine a vast email list, but you only want to reach a specific, engaged group for a targeted campaign. Data filters in Salesforce Marketing Cloud are your solution! These user-friendly tools act as sieves, allowing you to refine your audience based on predefined criteria like demographics, purchase history, and even past campaign engagement.

Choose from pre-built options or create custom filters to tailor your reach. Once defined, these filters can be applied across various subscriber lists or data extensions, offering ultimate flexibility in your targeting strategy.

By leveraging data filters, you can effortlessly create highly specific segments, ensuring your emails resonate with the most relevant subscribers for each campaign.

Step-by-Step Guide to Building Customer Segments with Data Filters

  1. Navigate to Subscribers: Begin by accessing the "Subscribers" tab within the Email Studio section of SFMC. This is where you'll manage your subscriber lists and create your customer segments.
  2. Select "Create Data Filter": Click "Create" and choose "Data Filter" to launch the data filter creation interface. 

  1. Choose Your Data Extension: SFMC utilizes Data Extensions and customizable data tables to store customer information. Here, you'll select the specific Data Extension containing the customer data you wish to leverage for segmentation. This could encompass demographics, purchase history, website behavior, or loyalty program data.
  2. Define Your Filter Criteria: The magic happens here! Data filters allow you to drag and drop various customer attributes into the workspace. You can then define specific criteria for each attribute.

    For instance, you could drag "Age" and filter for customers between 25-34 years old. SFMC offers a variety of operators (e.g., equals, greater than, less than) to refine your filters and create precise customer segments.
  1. Combine Criteria with AND/OR Operators: Data filters empower you to combine multiple criteria using AND and OR operators, allowing you to build more complex segments. For example, you might create a "Young Parents" segment by filtering for customers aged 25-34 AND with a recent purchase history containing baby products.
  1. Save and Apply Your Segment: Once you've defined your filter criteria, simply assign a name to your segment for easy identification. Click "Save," and your segment will be ready for use! You can leverage this segment for targeted email campaigns, personalized website experiences, or even tailor in-store promotions based on the specific characteristics captured in your filter.

Benefits of Data Filters:

  • User-Friendly Interface: Data filters offer a drag-and-drop visual approach, making them accessible even for users without extensive technical expertise.
  • Intuitive Segmentation: The clear layout lets you easily visualize how different filter criteria combine to define your customer segments.
  • Rapid Prototyping: Data filters are ideal for quickly testing different segmentation strategies and identifying which resonates best with your audience.

(ii) Customer Segmentation Through SQL Queries

While data filters in Salesforce Marketing Cloud offer a user-friendly way to segment your audience, they have limitations. Need to target customers based on data from more than two sources or create highly-specific segments with complex criteria? SQL (Structured Query Language) activity is your answer.

SQL activities are used when you need to segment one or multiple data extensions simultaneously or retrieve data associated with several data extensions. This option allows you to create SQL queries through an activity generating a specific and highly granular customer segmentation for maximum impact. 

However, successful use of this tool depends on your experience and knowledge in writing queries and SQL databases. Plus, SQL queries operate on data stored within SFMC Data Extensions. So, ensure you have access to the relevant Data Extensions containing the customer information you wish to segment.

Steps to Building Segments with SQL Queries

  1. Navigate to Audience Builder: Within the Email Studio section of SFMC, locate the "Audience Builder" tool. This is where you'll define your customer segments using various criteria, including SQL queries.
  1. Choose "Advanced Filters" and Select "SQL": Click the "Advanced Filters" option and then select "SQL" from the available choices. This will launch the SQL query editor.
  2. Craft Your SQL Query: Here's where your SQL knowledge comes into play. You can use SQL functions and clauses to filter and segment customer data based on specific attributes and conditions. 
  1. Save and Apply Your Segment: Once you've crafted your SQL query, assign a descriptive name to your segment and click "Save." Your segment is now ready for targeted marketing initiatives.

Benefits of SQL Queries:

  • Granular Segmentation: SQL queries empower you to create highly precise customer segments based on complex criteria. This allows you to target specific customer groups with laser focus.
  • Unlock Hidden Insights: By leveraging various SQL functions, you can uncover valuable trends and patterns within your customer data that might not be readily apparent through data filters.
  • Scalability for Complex Segmentation Needs: SQL queries offer a powerful and scalable solution as your customer data grows and your segmentation needs become more intricate.

Conclusion

Every interaction with your brand, from website visits to support calls and purchases, leaves a valuable data trail. Customer segmentation empowers you to unlock the power of this data. By grouping customers with similar characteristics and behaviors, you better understand their unique needs and preferences.

This isn't just about data analysis - it's about fostering genuine connections. Imagine sending targeted emails that resonate instead of generic blasts or offering website recommendations based on individual browsing habits. Segmentation allows you to tailor experiences that feel personal and relevant.

In essence, segmentation transforms your audience from a mass into distinct communities, each with its conversation to be had. Speaking directly to their interests fosters deeper engagement, creates a more positive customer experience, and ultimately cultivates lasting loyalty.

Waseem Bashir
CEO of Apexure
Waseem Bashir
CEO of Apexure
Waseem Bashir
CEO of Apexure
Waseem Bashir
CEO of Apexure

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