With their logo at the top of the page, a simple set of navigation options, and clear but unobtrusive banners, Anna Beck's online store feels inviting and enjoyable to explore – something that's essential for 'E-tail' success.

5. Collaborate with other companies

Consider tapping into the audiences of other retailers and brands. Identify non-competing companies that share your target customers and see if you can team up with them. Collaboration between brands and retailers is becoming an increasingly popular strategy, particularly when it comes to eCommerce companies teaming up with physical retailers.

Case in point: Australian women's ethical surf brand Salt Gypsy. Salt Gypsy started as an eCommerce store specializing in women's surfwear (swimwear that meets the needs of surfers). While Salt Gypsy has a bricks-and-mortar location, they've been able to grow their brand and make waves into new areas by branching out into technical surf equipment – namely, surfboards!

Now, numerous stores in Australia and locations around the world have teamed up with Salt Gypsy to sell their merchandise – and their boards (designed specifically for female surfers) are flying off the racks! Sometimes, the Salt Gypsy team gets a chance to pop into one of these locations like they did at Byron Bay surf store, Surfection.

And the Surfection team is quick to cross-promote Salt Gypsy too! It's exactly this kind of co-marketing that creates life-long customers from just one sale!

To put it simply, if you spend $100 on your marketing in a month and acquire 100 customers during that time period, your CAC would be $1. As this example suggests, the CAC is usually used with reference to a specific marketing project for a certain time period. Keep in mind that CAC is fickle and should be taken with a grain of salt! Here are some quick steps on how you can decrease your CAC without enormous effort:

1. Ensure your website is conversion-friendly. Think mobile compatibility, user experience, clear product listings that make use of relevant keywords, and high-quality product photography. You want to make it easy for your customers (new and loyal) to navigate to and through your site, and to make purchases with you. They should be able to easily search for the products they’re looking for, while also navigating past products they may potentially be interested in – clever product segmentation is a very useful tool in getting your customers to make the most of your store.
   

2. Boost the value of your current customers. This means working on moving your customers to more desirable segments and increasing the Return on Investment (ROI) that you get from your marketing. Make sure to check out Part Two of this series in which we look at retention marketing with customer segmentation.

To make a profit on your marketing, your monetary output needs to be less than what you receive back. In the case of acquisition, the value of your new customers must be more than the amount that you put into acquiring that customer. Using customer segmentation to understand who your most reliable customers are, and then using that knowledge to target customers like them (think lookalike audiences with exported CSVs and negative audiences – more on this later) is how you can be sure that your marketing is reaching customers who will most likely become loyal shoppers.

Check out this blog by Shopify to get an idea of ways that you can increase your conversion rates with ease.

What do customer segmentation and acquisition marketing look like?

A recent CMO survey found that 44% of marketers use customer segmentation to develop their acquisition marketing strategy.

Making the most of customer segmentation (see part 1 of this blog series and our Customer Segmentation Guide to get started) plays directly into your acquisition marketing. It’s simple; understanding your best, most loyal customers gives you a clear understanding of who they are and what they like. You then have the power to use this information to target customers like them.

As Hackernoon states, the communication in your acquisition marketing strategy needs to be informative: “At this stage, they would prefer to learn about the solutions to their problems. In later stages, you may need to talk about other related products in your communication.”

Establishing a useful and easily understood blog, maintaining your content SEO (including your product listings), and ensuring for top-quality user experience, no matter what device your website is being viewed on, goes a long way in helping you to attract new customers. If you’re unsure about SEO marketing, make sure to check out our recent blog series. What you need to remember is that if your SEO is top-notch, search engines will prioritize you as a search result and your store will be more and more visible to more and more customers.

Let’s drill down on this a bit and look at content marketing as a way to attract customers organically.

Step one is to get started by creating a blog post closely related to your store, products, or even your processes. For ideas on what your posts could be about, check out blogs from your competitors and influencers in your industry. It could be something as simple as “10 styles that we love this summer” if you’re a fashion-based retailer.

Then, start to share your blog. Create social media posts that link to it, share the posts among community groups you think the blog may help and don’t forget to include keywords in the blog copy and in your post. Just be careful not to flood your work with keywords. If you’re incorporating the words that customers are likely to associate with your store, the chances of your store appearing in the search results for those words is amplified, but overdoing it could actually hurt your SEO. Tools such as the Chrome Add-on ‘Keywords Everywhere’ can be a really useful free tool here. And it doesn’t always have to be the newest, freshest, most thought-provoking content to make an impact. Check out this quick guide by Aleyda Solis on repurposing content to keep it fresh with minimal effort.

And don’t lose heart. Content marketing can be a slow burn and sometimes you may not see results immediately. Even though it can seem like your blog and content may not be relating directly to conversions, remember that it’s intertwined in your brand and business visibility. The more valuable content that you publish, and the more you can get your store linked to on other websites (with the more traffic the better), the more search engines ‘like’ the look of your website and are likely to boost it in the search results. The reason this takes a while is that you’re competing with all the similar content out there and it can take a little while for the search engine to take notice. Keep at it and you’ll start to notice more and more readers, a percentage of whom will eventually convert to loyal customers.

Customer Experience

Make your products and your brand so appealing, informative, and industry-leading that new customers can’t help but peruse your products – and you should try to do this for as little cost as possible because, well, you can! It makes sense then that your customers’ experience of your store should be A-class. Whether your business is brick-and-mortar, online, or both, it’s imperative that your new and existing customers have such a pleasant experience shopping with you that they’re inclined to shop again. Pay attention to your customer service practices and overhaul them – check out this blog by Vend to get some ideas on where to start.

Here are a few ideas to consider too:

Offer tracking for shipped items:

Apps like AfterShip offer easy shipping tracking for your customers post-purchase. These offer them peace of mind once they’ve spent money with your store, particularly if the item is being shipped from another country or state. Your customers are easily able to check on the status of their parcel with the click of a button and they can rest assured knowing that if there are any issues, they are able to let you know in good time. This also gives you a golden opportunity to tackle any customer service questions by creating a clear path of conversation for your customers. If in-store customers are requesting shipping and it’s within scope for you, imagine how thrilled they’ll be to hear the answer is yes, they can have that beautiful item delivered to their door. Now imagine their gratitude when you get in touch with them again to supply a shipment tracking number, simply remind yourself of their details and let them know when their package has been sent.

Approach with influencers:

Influencers from your industry and similar industries are leading faces of the market. Customers trust their suggestions and even sometimes avidly wait for their favorite influencers to discuss more products. This doesn’t have to be sneaky product placement; think about how great the PR is for a well-known social media personality to openly say they love your product. Often, all it takes is getting in contact with the influencer or their agent, striking up an agreement (X amount of free items for X in return – usually photos/videos/content and a personal recommendation if they like the product). Once you’re all agreed on a contract and have the necessary details lined up, simply send out the products. Remember it’s important to establish an expected timeline for the influencer’s marketing, and often it’s a good idea to line these up with product releases or new stock.

Consider the unboxing trend:

There’s a reason influencers and customers are videoing themselves opening products from their favorite stores and sharing these online. It’s a recognized and effective form of sharing their experience and when it’s really positive, it’s only natural for your customers to want others to know. Including a hand-written note and a sample product could be perfect, particularly if you use loyalty tiers and your customers have reached a new tier. It’s also a great way to welcome new customers to your store after their first purchase. A small prompt for an unboxing on the packaging and an additional mention of your social media handles could be just the ticket to getting your customers to share (and rave about) their experience. Just remember to keep it within the possible bounds of your business. If a short thank you note and some simple but aesthetic eco-packaging are more your style and more aligned to your brand, that’s great! Keeping it within your budget is the key to success.

Using Marsello’s segmentation to inform your paid marketing

The most effective acquisition marketing that you’ll get from your Marsello product is invaluable – it’s an in-depth understanding of your current customers and their shopping patterns. By using your segmentation data to get detailed customer insights, you’re able to create audiences of potential customers who have similar tastes, style,s and shopping patterns.

The basic steps are reasonably simple:

1. Download your most desired segments as CSVs (likely best/loyal customers)

2. Add this CSV to your social media business account as an audience

3. Select ‘create lookalike audience’ to create a selection of users that share similar characteristics to your original segment

4. Just remember to exclude the original CSV group from the lookalike audience when building a new campaign, and your marketing is set to reach a wide range of customers similar to your most loyal, without you having to pay for your current customers clicking and blowing your acquisition budget.

Remember that social media and paid advertising are complicated beasts, but understanding your audiences and who you’re targeting can set you apart. This also works best if you have an audience of over 1000 customers, otherwise, you may find that your marketing doesn’t deliver as your social media channel deems the audience too small.

Why not start with something proven? Acquisition marketing can tie in and be linked to your retention marketing. Using tactics like customer referrals and reviews incentives are sometimes the difference between a sale and not. Email and loyalty apps, like Marsello, offer pre-designed, optimized emails that are automated to send to your customers at different stages of their customer lifecycle.

Final words

Acquisition marketing is a fine art made up of knowing who your customers are, attracting the right customer based on your previous knowledge, and then making sure your acquisition efforts flow into your retention efforts – you want those ideal customers you’ve gone to so much trouble attracting to keep coming back. And with indicators like customer segments, Customer Acquisition Cost (CAC), and Return on Investment (ROI), you’re already way ahead of the game.

Just remember that whatever marketing efforts you put in place, keep testing them. If you use a lookalike audience from 6 months ago, but your products have changed completely then the profiles of your ‘best’ and ‘loyal’ customers will have also changed. Using old customer data would therefore not be as likely to appeal to your new potential customers.

Start with the basics and work your way up. With eCommerce, ensure that you have your product listings nailed, keywords carefully added without flooding your content, and product photos crisp, while referring to our SEO series to make sure you’re nailing this. Your customer’s experience of your online store, regardless of the device they’re using, should be free-flowing and simple. Buying from your online store should feel like an enjoyable experience from their first-page view right down to the customer receiving their package on time.

If your business is mostly or entirely brick-and-mortar, the basics are the same! You want your potential customer to have a peaceful, enjoyable, informed, and encouraging experience in your store and you want that potential customer to make a purchase. Don’t fall into any traps on inundating your customer with too many products and eye-catching things. Start with researching physical product placement within stores like yours to see if there are perhaps patterns you should be following.

And remember, anything to do with SEO, content marketing, and subtle prompts can sometimes take a very long time to get off the ground. Be patient and experiment with what works best for your brand.

Have you seen the rest of the Customer Segmentation Series?
Check out Part Two and Three in the links below:

Understanding your segments

As your customer database grows, that the metrics defining your segments will change too. It’s important to understand how your segments grow and change in order to get the most out of your marketing. Segmentation is an amazing tool for creating targeted marketing, but it’s vital for you to understand how the segment rules will adjust to your customer’s shopping behaviors and ultimately your segments. For example, as your ‘Best’ customers order more frequently and spend more per order, the minimum spend to enter the ‘Best’ segment could increase, potentially causing some of your other ‘Best’ customers to fall into the ‘Loyal’ segment. A good metric to look at in this example is the segment’s Average Customer Lifetime Value (ACLV).

Looking into a segment’s ACLV is helpful when you’re getting into the nitty-gritty of your budgeting, your target audiences, and your customer segments. If you know how much your customers are worth to you now, and you can estimate how much they will be worth to you in the future (over the next 3 years), you can allocate your marketing budget to get the biggest return on investment. Check out our blog on calculating Customer Lifetime Value to help you understand the basics of CLV and how Marsello calculates this for you. Our friends at Shopify also clearly explain the importance of CLV. As they put it,

“Not all customers are created equal. In fact, the top 1% of eCommerce customers are worth up to 18 times more than average customers. […] As a business owner, you need to be able to focus your efforts on acquiring the right customers—the customers who will take your business from being a flash-in-the-pan success to a household name.”

Understanding your ACLV and where you should allocate your marketing budget all come back to Return on Investment (ROI) – you want your marketing spend to even out through your revenue gain, otherwise, that marketing can quickly become an expensive loss. When you understand your segments, how they change, and who is in them, you can predict which ones have the opportunity to become more valuable and who will already give you a high ROI. Let’s look at another example of how your segment metrics can change with a different customer group. As your customers shop more frequently, your average purchase cycle will decrease. This would have a visible effect on your ’At Risk’ and ‘Lost’ segments as the timeframe for your customers to slip into these segments would decrease, meaning that these segments would likely grow. But it’s important to note that your customers are shopping more frequently, which is a good thing, so just because segments that could be more worrying at a glance are growing, does not necessarily mean that your marketing is not working.

To understand how Marsello’s Customer Segmentation feature organizes your customer database, read Marsello’s guide to Customer Segmentation “Take Personalization to the Next Level with Customer Segmentation by Marsello”.

Generating loyalty with Retention Marketing

Don’t get it confused, retention marketing and loyalty are not the same things. Retention marketing is using specific tactics to engage customers who have already made a purchase with you and to encourage them to keep purchasing. Loyalty marketing is one tactic that you can use within your retention marketing toolkit (think loyalty programs with generous rewards), however, loyalty itself is when your customers are committed to buying your products; you’ve nurtured their relationship with your store and now they’re a customer who won’t take a huge marketing effort to make another purchase.

So how do you generate loyal relationships with your customers?

Think about what makes you want to return to your favorite stores, online or otherwise; it’s all in your previous experience of that store. No customer wants to feel like just another number to a retailer – the key is in nurturing the customer’s loyalty by giving them a shopping experience to remember, and this doesn’t have to stop at the completion of a transaction. Take the example of using an email to thank a first-time customer for shopping with you. Offering them a worthwhile discount code when they spend over a certain amount on their next purchase is a perfect way to entice them to shop again.

At its core, coupling customer segmentation with retention marketing gives you the power to curate marketing strategies personalized to each segment. Get started by testing the success of your current marketing with each of your segments. Do your ‘Best’ customers love emails with product recommendations based on what they’ve bought before? What about your ‘New’ customers? Maybe they just need a reminder to join your generous loyalty program that allows them to climb to higher-earning tiers and they’ll become a ‘Loyal’ customer in no time.

Let’s create an example: Jane is in your ‘Loyal’ customer segment. She shops reasonably often, although mostly in smaller amounts – a single item at a time (your best customers shop frequently and often buy three or more items at a time). To successfully have Jane move to your ‘Best’ customer segment, you would need her to spend more with each purchase. Giving her access to a tiered loyalty program that rewards her for these purchases could be the marketing strategy that changes her shopping patterns. She knows that if she spends $X on the next purchase, she’ll move tiers and gets access to doubled points per spend. Moving tiers and higher rewards could be the incentive Jane needs to make more frequent purchases with you.

As Jane begins to spend more with you, you evolve your marketing strategies and use these to nurture your customer relationships, this, in turn, makes Jane (and customers like her) feel more engaged with your brand and fosters loyalty. Jane is therefore increasingly more inclined to shop with your store and is now more likely to enter more reliable segments. If loyalty programs aren’t working for your customers, then maybe it’s time to trial deals on shipping or offering freebies with purchases that total over a certain amount.

Check out Our Bralette Club's loyalty program for an idea of how to master a generous loyalty program. The team at Our Bralette Club makes it easy for their customers to accumulate points and then once those customers reach 1000 points and then 1200 respectively, they reach different levels of the Peach Party VIP program. At level 2, customers start earning 3 points for every dollar they spend and at level 3, they earn 4 points for every dollar spend.

The Peach Party's detailed VIP program instantly gives OBC's customers more and more incentive to keep shopping at a store they already love enough to have earned points to reach another tier.

Global beauty brand and distributor, MECCA, are also well known for their loyalty program, ‘Beauty Loop’, featuring multiple tiers and yearly freebie rewards to customers within each tier – and those gifts keep getting better with each tier that their customers reach.

MECCA are also champions of freebies and offers, including entire racks of travel-sized cheaper, but beautifully presented products near their tills and offering free trial products when certain purchase requirements are met. If you don’t have a MECCA store near you, take a look through their products and marketing online to see how the pros are nailing it in both an eCommerce and POS setting.

Check out their loyalty program in the image below:

Another power of retention marketing is that you’re reaching out to customers who already know your business, your brand, and your products. This means that you’re able to rely on this knowledge to bring them back to your store with crowd favorites, unmissable deals, or loyalty program incentives. Remember, it’s all about helping your customers to feel supported, understood, and appreciated.

Retention marketing is huge and can require a bit of trial and error. To get you started on planning, check out this blog from BigCommerce on “How to Retain Customers and Spend Less”. Take note of the way they stress the importance of personalization, customer service, and, above all, valuable content. Shopify is also nailing product advice with this course on product photography. If you know that certain products are selling more than others and you think it could directly relate to the image or text in that product listing, perhaps it’s worth testing if replicating this with other products will help all of your products to sell equally as well.

As we’ve noted before, email marketing is the most effective form of marketing within retail – even if you’re store is solely brick-and-mortar with a loyalty program linked to your POS, you can effectively use email marketing with your customers. To put it into simple figures, the ROI of email is as high as 3,800% and email marketing is as high as 40x more effective than Facebook or Twitter when it comes to product marketing making conversions. By intelligently segmenting your customers base and understanding your customers by their shopping habits allows you to open up an enormous range of marketing potential. Providing content that is relevant to each customer segment automatically helps those customers to feel more appreciated, more engaged, and therefore more likely to complete a purchase.

With all the planning, trial, and error that comes with figuring out how to make your marketing work for you, it can all feel very intimidating. Apps like Marsello, with a built-in tiered loyalty program and automated email flows, are designed to make this process easier for you and can be a powerful addition to your toolkit. Remember though, when you’re adding to your marketing toolkit, this needs to be accounted for in your budgeting.

Final Words

The buzz around retention marketing is there for a reason, it works! And with customer segmentation at your fingertips with tools like Marsello, it’s so much easier to automate this process and understand your data. Remember though, it’s not as simple as setting up a loyalty program and hoping that will be enough, you need to cater to your customers and find out exactly what it is that works for each segment. Do your research too – it never hurts to check out what successful stores like yours are up to.

Stay tuned for blog three in this series in which we will go in-depth on acquisition marketing. We want you to get the most ROI from your marketing budget, and we want it to be simple for you to achieve this success. Let us know if there are any tricks that you love using in your retention marketing in the comments below, or better yet, head to our app listing and give us a review of what it is exactly that you love about Marsello.

Have you seen the rest of the Customer Segmentation Series?
Check out Part One and Three in the links below:

Sometimes, it can feel as though your carefully planned marketing is drowning in a sea of emails, paid ads, and brand awareness campaigns. In turn, it can then feel like an impossible task to convince a customer to pick your products and brand for their Retail Lifeboats: the SS Revenue and SS Loyalty.

Marsello released Customer Segmentation specifically designed to tackle this. We’re taking the guesswork out of segmentation and targeted marketing, however, we expect retailers to want to understand what is happening. We want you to have all the information to make the most out of your segmentation, from the basics to retention marketing and finally, acquisition marketing. That’s right, welcome to part one of another Marsello three-part blog series. And if you didn’t see our SEO series, check out part one here.

As internet marketing guru Neil Patel says, "User segmentation isn’t something that is alien in the marketing world. The big brands have this down to a T, and the little guys are just waking up to the power behind having a laser-focused strategy — laser-focused on user segmentation."

Customer Segmentation 101

It’s becoming increasingly apparent that retailers should be specifically marketing their brand to smaller subsections of their customers, rather than their entire customer base. The idea that when customers are segmented by their shopping behaviors, traits, and previous purchases, it’s far easier to target them with marketing campaigns that are most likely to result in a sale. Think about how hard it is to try and create your marketing when you know next-to-nothing about your customers – using customer segmentation to inform tailored, and personalized messaging is a proven, sure-fire way to keep customers interested and even win-back customers who have lapsed.

Let’s break that down. I love this example: everyone has their coffee preferences – americano, latte, cappuccino, espresso, iced coffee, or a cup of tea instead. The thing is, selling an espresso to someone who knows they want a large frothy soy latte is a waste of time, and can even sometimes leave that customer feeling like they wasted their money. Cafes that cater to a wide variety of coffee preferences, and even dietary requirements, are already using customer segmentation by meeting the needs of as many customers as possible while still selling a small variety of products. It’s tailored marketing at its most basic! And it doesn’t mean you have to stick to catering to what customers know, for example, cafe regulars who take their coffee away may be thrilled with a reusable coffee cup deal that includes a free coffee at the time of purchase. It’s all about applicability.

Cafes can easily go the extra mile. The Marsello marketing team are regulars at a nearby cafe. With weekly meetings and daily morning coffee orders, the baristas have gotten to know even our most particular orders. For example, one of our team loves a mochaccino, but only when the coffee is strong, and the chocolate is quarter-strength. It took a little trial and error to get there (and sometimes when there’s a new barista there’s a bit of refamiliarizing needed), and now our local cafe has this particular coffee (and all the others) so nailed that when our team walks in, our Mochaccino Marketer just has to say, “My usual please”. This familiarity, their generosity with their loyalty program, and their warm, attentive customer service have made our entire team very loyal customers.

What the local cafe is doing here is helping Marsello’s Marketers to feel cared for, attended to, and that our loyalty is appreciated; this makes us want to shop with them again and again, and therefore helps us to form a recurring spending pattern. Their attention to detail, excellent quality coffee, and care for our individual needs then help us to feel further catered to, and when little perks like free scones are thrown in, we are not only sure to keep coming back, but we’re sure to bring others and form lasting habits.

That’s great for cafes, but how do we apply this to the wide variety of eCommerce and Point-of-Sale stores out there when knowing each customer at an individual level isn’t feasible? Well, have you heard of RFM (Recency, Frequency & Monetary) analysis for customer segmentation? If you haven’t, the reason we’re here is to explain the basics.

What is RFM analysis

RFM analysis starts by basically asking three questions about each customer:

1. How recently have they shopped with you?

2. How often do they make a purchase?

3. How much have they spent?

Once you’ve asked these core behavioral questions and started to organize your customers, you can begin to develop how you will work to capture these segments within your different marketing tactics.

Now, actually stopping to query this of every customer isn’t going to work, but automating it through customer database analysis will! Marsello’s customer segmentation does the hard work for you here, although it always pays to understand how that works. Yep, you read that right! Marsello’s Customer Segmentation is data-driven and based on RFM analysis. We’re also excited to give you paired suggestions that are designed to take the segmentations marketing capabilities one step further and help you to begin targeting customers, helping to move them to more loyal and reliable segments. Keep your eyes peeled on our upcoming blog on customer segmentation and retention marketing where we’ll go into more detail on this.

The RFM Analysis Ranking System

RFM analysis doesn’t just stop at organizing your customers based on recency, frequency and monetary. To make the most out of this system, it’s then important to rank the importance of these categories and rank the customers within these categories, allowing you then to find your most loyal customers, those who are most at risk, or, for example, those who haven’t shopped recently. We’re really just brushing the surface here so let’s dig in and create an example:

Sam, a sewing master, and clothing designer, has been running a successful clothing company for the past year. He's been sending blanket messages to his customers and has recently discovered RFM analysis. Instead, Sam wants to create marketing that can reach out to all of his customers, without assuming the same demographics of them; so he begins using RFM to organize them and is now in the process of ranking them. To do this, he exports spreadsheets from his Point-of-Sale and eCommerce system, combines the spreadsheets and then manually has to rank each of his customers using RFM analysis.

In order to make sure that he ranks his customers fairly and without bias, he creates his calculation process; this is easy for her monetary i.e. how much they’ve spent. However, it becomes more complicated for frequency and monetary. Frequency is the number of orders they’ve made in a specific time frame, what should that time frame be? What’s excellent and what’s not? Recency is how often they shop, however, when does a customer become at risk? What is their average purchase cycle? In short, how do you know you’ve done this correctly? And how often should you do this process?

Here’s where Marsello’s customer segmentation sets us apart. With the correlation between recency of purchasing and the likelihood of purchasing again, Marsello’s data-driven segmentation organizes customers with this in mind. For customers in the ‘New’ segment, are specifically customers who have made one order within the past year. However, if a customer makes more than one purchase within the year, they move to and of the ‘Promising,’ ‘Loyal,’ and ‘Best’ segments, scaled according to Frequency and Spend. Check out the Marsello Customer Segmentation tool below. Each block is interactive and includes a customer list for the specific segments, leaving room for detailed marketing efforts down the line.

Let’s create another example: for Sam’s highest spending customer (let’s call them ‘Belinda’), who also shops multiple times a month. Belinda is a devoted follower of Sam’s clothing designs, and he knows Belinda by face when she enters the store. Of course, Belinda is within the ‘best’ category, but to keep her here, Sam knows that he needs to cater to this customer on a personal level. Belinda likes her clothes to be shipped from the brick-and-mortar store, and, from previous experience with her, Sam knows this is the case. Sam’s more than happy to oblige because he knows it means repeat sales from his highest spending customer.

Now, it’s worth noting that Belinda the ‘Best’ can slip into the ‘At Risk’ segment. Sam knows from shopping patterns to expect Belinda at least twice per month within his brick-and-mortar store, and he can also usually expect at least one online purchase from her every two or three months. On one occasion, Belinda doesn’t complete a purchase for four months! Because this is out of her regular purchase cycle, Belinda slips into the ‘At Risk’ segment. Sam can see this is a bit of a problem and creates marketing to hopefully bring Belinda back. If Belinda doesn’t complete a purchase within 12 months of her last purchase, she moves segments again to become a ‘Lost’ customer.

With the example of Sam and Belinda, it’s simple to see how customer segmentation can have a significant effect on marketing strategies. Rather than sending Belinda an email for a generic coupon, as a ‘Best’ customer, it would be wise for Sam to offer Belinda something that feels a little more exclusive and tangible. Perhaps tiered loyalty and added purchase freebies would be a good option.

Check out Our Bralette Club's beautiful loyalty program which features VIP tiers for inspiration:

Marsello’s customer segmentation doesn’t just stop at organizing customers. As we’ve already mentioned, it can be a mammoth task to organize customers into segments manually, and to know that you have to do this regularly is daunting. Knowing how often you should be updating your segments isn’t even the start of it. The good news is that Marsello’s customer segmentation is updated every 24 hours, and we’re aiming to up the ante and make these updates even more regular. Even if you are using RFM, manually updating every day just isn’t feasible, so we’ve got you covered, ensuring your targeted marketing is accurate.

If you’re still curious about manual segmentation, Shopify and BigCommerce have published some incredibly descriptive articles on RFM.

So, what do we know

• RFM analysis is used to organize customer databases into specific segments. Basing these segments off customer’s purchase behavior gives crucial insight into the type of marketing you should use to target them and to move them between segments.

• Frequency and monetary values are core to calculating your customer lifetime value (CLV); meanwhile, recency gives insight into customer engagement and indicates the likelihood of that customer coming back again. We’ll go into this in more detail in Part Two of this series, so keep up to date with these blogs by subscribing on the right-hand side of your screen, and following Marsello on Twitter or Facebook.

• Targeting your marketing based on these metrics allows you to focus your budget on areas such as retention and acquisition, while still moving customers to more reliable segments.

Stay tuned for our Customer Segmentation Series parts two and three to learn more about segmentation coupled with retention marketing and acquisition-focused tactics.

Have you seen the rest of the Customer Segmentation Series?
Check out Part Two and Three in the links below:

Would you be able to tell what the item was by looking at this URL? No chance. It contains no keywords, so it’s only by clicking that you’d know the item is a V-neck dress. This is exactly the kind of link you want to avoid; it looks messy and chaotic, so no one is likely to click on it.

A messy URL also makes your site more difficult to navigate. If your customers can’t retrace their steps back to other parts of your site by reading your URLs, there’s a good chance that Google will struggle as well.

What to do instead: focus on website hierarchy

Your links should be offering a solid road map of your site. An optimized link would follow this structure:

https://example.com/category/sub-category/product

The pet care retailer Bobbie Dogs has a great URL structure – their URLs have a logical flow from the broader elements of the website (e.g., homepage, category pages, etc.) to the more specific parts (e.g., the product in question).

As such, both Google and shoppers alike will find it easier to understand what the page is all about. Check out their URL below and note the logical mapping of data within the URL; it’s easy to follow, understand and remember.

This description is very wordy and dense, using the keyword ‘top’ multiple times. It also uses far more descriptors than necessary, making it more likely to confuse customers than inform them.

What to do instead: Sprinkle in keywords and don’t overdo it

Use your keywords moderately and only in places where it’s natural to do so. Try putting yourself in the position of your customer when you read your copy. Is it relevant, useful and compelling? If so, that’s what will make them want to stick around – and Google, in turn, will reward your website for it.

Check out this example from Triangl, a highly successful Australian swimsuit brand. In the following product page, you’ll notice that Triangle lightly sprinkles relevant keywords (e.g., ‘bikini’) throughout the content without going overboard.

Mistake 3: Not having an internal linking strategy for your product pages

Note that while Google’s Keyword Planner is a solid tool, you may want to check out premium SEO software such as SEMRush and Ahrefs. These solutions can offer more granular data around search volume and provide insights into the keywords you should be targeting.

Now, the best keyword strategy will vary from one site to the next, but generally speaking, you’ll need to factor in the following things when deciding which keywords to target:

Search volume – You want to have a decent number of people searching for the keywords you choose to make the effort of finding and inserting them worth it. If a certain keyword only gets 0-10 searches a month, then it’s best to move on to other keywords with high search rates and close connection to your products/store.

Competition – The more websites competing for a keyword, the harder it is to rank, so targeting low competition search terms will maximize your chances of landing at the first page of Google.

This is where it gets challenging because the keywords with the highest search volume are typically the most competitive. You will need to do a lot of digging to uncover low competition terms with a decent search volume. Start writing a list of the keywords you’ve found and compare their search rates to their competition. Soon you’ll start finding words that fit the bill.

Relevance – This may sound obvious, but determining the relevance of some search terms can be tricky, particularly if a keyword is ambiguous.

For example, if you sell competition-level dart boards, you may think that ‘target’ is a great keyword. Unfortunately, Google thinks ‘target’ searchers want are looking for Target the department store.

You also want to go for keywords that are relevant to people’s intent to buy. Let’s say you’re selling paintings or posters. Keywords like ‘free posters’ or ‘DIY wall art’ are best avoided because people searching these terms aren’t likely to spend money on ready-made art.

Bottom line? When doing keyword research, put yourself in your customer’s shoes. Get into the mindset of someone who is ready to buy your products and identify the search terms that they’re entering into Google.

2. Go beyond optimizing your content

Once you find those relevant keywords, find ways to work them into your website.

The most obvious way to do this is to spread them throughout your copy – i.e., on your homepage, about page, product descriptions, etc.

But you shouldn’t stop there.

Keywords should show up in a lot of other places, as well, including:

Your meta titles – The meta title is an HTML code found at the header of a web page. Its purpose is to tell search engines what a page is all about. According to Moz, “title tags are the second most important on-page factor for SEO, after content.”

What about your meta descriptions? Well, contrary to what some may think, meta descriptions don’t effect rankings directly. Still, it’s worth including your keywords in meta tags because Google will display them in bold on the search results page. This might lead to more clicks, which would help your rankings.

Your URL – Ideally, you want the right keywords in your domain name. For example, Red Dress Boutique (RedDressBoutique.com), a fashion boutique for women, has keywords like ‘dress’ and ‘boutique’ in the domain name.

That said, It’s not the end of the world if your domain name doesn’t contain top search terms. But at the very least, relevant keywords should be in your URLs.

For instance, on its category page for men’s running shoes, Adidas has that exact key in its URL.

It’s also a good idea to focus on accessibility. Instead of using random characters in your URLs, customize them with keywords and make it clear what the page shows.

3. Work on your product pages

Product pages aren’t usually content heavy, but there are still a number of things you could do to set them up for SEO success.

In addition to optimizing your URLs and title tags, you also want to incorporate the right keywords in your product titles, descriptions, and image tags.

Internal links can also help. Take a look at how búl does their product pages for inspiration.

The saying “You have to spend to make money,” is quite true in the world of retail. As a store owner, you often have to invest in marketing and advertising to acquire new customers and generate revenue. The question is, exactly how much should you spend on customer acquisition to ensure that your efforts are worth it?

To answer that, you need to calculate your Customer Lifetime Value (CLV).

Sometimes referred to as Lifetime Value (LTV), this metric is the amount of revenue or profit that your business stands to generate from each customer during their lifetime. So, if your CLV is $50, then that tells you that it shouldn't cost more than $50 to acquire each new customer.

There are a number of formulas for computing CLV, and the right method will depend on your business model, customer behavior, and available data, among other things.

To help you figure out the right CLV calculation method for your business, we’ve put together some of the most common CLV methods used by eCommerce merchants. Check them out and see which one is the best fit for your business.

1. Use the simple CLV formula.

The no-frills way to compute your CLV is to subtract the cost to acquire and serve customers from the revenue that you’ve earned from them. To do this, use the formula:

LTV = Lifetime Customer Revenue – Lifetime Customer Costs

So, if you earned $200 from a customer over their lifetime and you spent $140 acquiring and serving that customer, then their lifetime value is $60.

Since CLV is often defined as the profit you’ve earned from your customers, then it technically makes sense to subtract your customer costs from your revenue. That said, this takes a very simplistic view of CLV, and it becomes problematic when you’re calculating the CLV of entire customer groups or segments.

That’s because this formula doesn’t take into account the fact that not all your customers spend the same amount at your store. Not to mention, shoppers don’t all stay active within the same time period i.e., certain customers are active for 2+ years, while others just purchase once and then become dormant.

For this reason, it’s a good idea to use more complex CLV calculations to ensure that you’re able to factor in different customer variables.

And that brings us to our next formula...

2. Determine CLV based on customer revenue distribution

Another way to calculate your customer lifetime value is to look at how revenue is distributed across your customer base. You can do this by benchmarking customer spending in your business and then grouping your customers based on those spending thresholds.

Let’s say that spending in your company typically falls into the following buckets:

• Customers who spend $25

• Customers who spend $50

• Customers who spend $75

• Customers who spend $100

The next thing you need to do is to figure out how many customers fall into each bucket. So you might list them as follows:

You’ll want to sum up the lifetime value of all your customers using the formula

(# of customers 1 x revenue) + (# of customers 2 x revenue) + (# of customers 3 x revenue) & so on

So the example above would be:

(98 x 25) + (80 x 50) + (102 x 75) + (68 x 100) = 20,900

You can divide that amount by your total number of customers to get the CLV

= 20,900 / 348 = $60.05

This is a good calculation to use especially if your basket sizes vary from one customer to the next. As The Balance explains, this CLV formula accounts for the fact that “some customers may be one-time or occasional buyers, versus the regular purchasers on the other end of the scale who have a higher LTV and generate the most profits.”

3. Multiply customer value by average customer lifespan

This CLV calculation is the one recommend by Shopify. What’s great about it is that it factors in a number of variables, including average order values, purchase frequency, and customer lifespan.

This method uses the formula:

Customer Value x Average Customer Lifespan = Customer Lifetime Value

Let’s break down what each of these components means.

To determine Customer Value, multiply your Average Order Value (AOV) by Purchase Frequency. You can find your AOV by dividing your Total Sales by the Number of Orders.

Meanwhile, to determine Purchase Frequency, divide the Number of Orders you have gotten over a certain time period (say 1 year) by the Number of Customers you have within that same time period.

Once you know your AOV and Purchase Frequency, multiply those figures and you’ll get your Customer Value.

Next, let’s talk about the Average Customer Lifespan. This figure pertains to the length of time that a customer is active. You may need to examine your purchase history to figure this out, though some experts say that 1-3 years is a good estimate.

Once you’ve determined your Average Customer Lifespan, you can go back to the formula above, Customer Value x Average Customer Lifespan to find your CLV.

Total sales + No. of orders = Average Order Value

No. of orders (1 year) + No. of customers (1 year) = Purchase Frequency

Average order value x Purchase frequency = Customer Value

4. Multiply lifetime value by profit margin

Another way to approach CLV is by multiplying Lifetime Value by Profit Margin. According to Clever Tap, this method takes your expenses into consideration so you're able to figure out the net value that you get from each customer.

Lifetime value x Profit margin = Customer Lifetime Value

The formula for this method is: Lifetime Value x Profit Margin, wherein Lifetime Value is Average Order Value multiplied by the Number of Transactions, which is then multiplied by Average Customer Lifespan.

Average order value x Number of transactions x
Average customer lifespan = Lifetime Value 

Lifetime value x Profit margin = Customer Lifetime Value

Driving home traffic this Christmas is simple with Marsello’s holiday email flow marketing campaigns. The pre-built best-practice emails save time and maximize returns, the cart abandonment emails recover lost customers quickly and effectively, and the loyalty program keeps customers coming back even after the holiday-mayhem has died down. In fact, users of this Shopify add-on are seeing 20 percent more sales and double the customer average spend per order.

Their tools don’t just stop at holiday email marketing, they offer a complete marketing package, including tiered loyalty programs, a referral program, AI-powered product recommendation emails, feedback collection, pre-designed email campaigns to cover your email marketing basis and customer lifetime value calculations.

2. Wishlist  

Wishlist allows your customers to create a wishlist of their favorite products, by adding a wishlist button to your product and collection pages. Whether customers are using it to compile a to-buy list, or eagerly creating a list for Santa, this little button makes things simple and makes customers more likely to complete their purchase with you.

Free trial: 30-days
Price: From $2.99 per month

3. Product Reviews

This professional Shop Sheriff suite of Shopify plugins provides valuable tools without excessive Javascript or third-party apps creating a mess backstage. Have your Shopify pages load instantly with AMP, display a carousel of trending products on your home page and view advanced analytics to tailor your future marketing plans.

Price: Free plan available, $9/month for hobbyist, $29/month for company

Invite everyone over

If you’re having a Christmas party, you’ll want everyone there. Increase online traffic to your Shopify store this holiday season with these Shopify add-ons:

5. Expandly

 Catering for additional guests (or shopping channels) can be hard work, but it’s a little easier with multi-channel management software. Expandly allows you to connect your Shopify store to Amazon, eBay, Wish and Etsy, alongside your shipping carrier and Xero accounting software.

Free trial: 14 days
Price: From $30 per month

6. Order Deadline

Counting down to presents Christmas is the most exciting part of December, and it’s easy for your Shopify store to join in the fun. Order Deadline answers your customers’ most pressing questions: When will I get it and how long do I have to place my order? With four designs to choose from, this simple addition to your Shopify store results in fewer calls and emails, and happier customers.

Free trial: Three days
Price: From $10 per month

Send out some Christmas cheer

Delight your customers and spread the good news. These Shopify add-ons will help get people talking about you with nice things to say.

7. Plug In SEO

 Reward your hardest searching elves this Christmas by checking, fixing and improving your SEO with Plug In SEO. The Shopify add-on checks your essential SEO elements (titles, headings, meta descriptions, speed, blogs and more) constantly, telling you what’s broken, what’s worth fixing and how to do it.

Free trial: 7 days
Pricing: From free

8. Deliverr

Step 5: Show your customers that you have what they need.

Shoppers often leave stores and sites because they haven’t found what they’re looking for, but just think how high the chances are that they just haven’t found that perfect item in your store yet. Offering product recommendations based on customers’ browsing and shopping histories, and the shopping and browsing history of customers like them is a proven way to increase your revenue and customer loyalty.

Marsello has you covered here too; simply drag the product recommendations widget into your email while editing the flow, and our smart AI will do the rest. Consider combining this with a discount code recommended above and really coax your customers into making the purchase they’ve been thinking about. If you want to know more about customizing your holiday email flow, check out our Holiday Email Flow Guide.

Step 6: Recover abandoned carts of customers who’ve left your store without a purchase.

This one is extra important for you to make the most of the busier holiday traffic. When you’re shopping online, how often do you add something to your cart only to promise yourself to come back to it later?! Remind customers of your unbeatable products and the item they forgot to buy by turning on abandoned cart emails – these have proven to gain retailers an average of 6% more revenue per day. Just think about how much that adds up throughout the year; so why not tap into through enabling the flow in your Marsello settings.

Step 7: Reward your customers.

Customers love to feel valued and what better way to do that than by giving them points for every dollar they spend in the form of a loyalty program. Marsello’s loyalty feature also enables retailers with brick-and-mortar stores to cross-reference those points with their online stores so customers can shop online and in-store and still gain the same points to the same account. Being generous here and offering high incentives is a winning way to gain customers loyalty, but to also gain new customers. If you include referral incentives (another feature Marsello offers), your loyal customers earn points for every referred friend that completes a purchase and that friends earns points too. When you add the extra level of a tiered loyalty program, where customers receive bonuses for shopping regularly and reaching a certain point level, it’s easy to see why customers will keep coming back.

Step 8: Get a jumpstart on content marketing creation.

Blogs are a great way to keep your customers interested and up to date, so now is a great time to get started if you have already. For a festive season blog idea, why not take your top 5 best selling products or gift-guide picks and write about them in a creative way. Nothing sells better than a positive review, and even better if it’s third-party; so, start gathering feedback by enabling Marsello’s feedback feature and once you start reaping the rewards, add those testimonials to your blog, website or social media. There’s a wealth of content marketing opportunities throughout the holiday period, so keep an eye out for anything you think would present a good blog or social media update.

Step 9: Set yourself goals.

This seems like a basic one, but it’s the bread and butter of marketing during such a busy time. Automating as much of your marketing and possible will make this easier, but really what you’re trying to do is increase reach and revenue: you want to market to as many potential buyers and possible, and have those buyers complete a purchase they’re satisfied with. If you want to do this by having two major sales within a two-month time period, add it to your list of goals. If there’s a certain amount of revenue increase you want to achieve, add that too. But don’t just add these to a list and forget about them, create a plan of how you’ll achieve this! Will you use email marketing? Do you have a social media plan? Is your stock organized and ready for you to keep up with the demand? How much did you make last holiday period and will you be able to match or beat that this year?

While you’re considering upping the ante with your holiday marketing, here are a few more small tips which some retailers are pulling off elsewhere:

1. If you’ve got extra stock that you can’t shift but would make a cute gift, add it as a freebie promotion and advertise that. A simple email campaign with ‘Buy now and receive a free gift on us’ could be enough to convince most shoppers. We also love the idea of ‘we’ve also thrown in a free stocking stuffer’.

2. Prepare to adjust your marketing. If you notice that your social media isn’t reaching many people or your email campaigns aren’t having a high open-rate, it could be something as simple at the time of day those updates go out, or that your competitors sent out a similar email that day. Be original but authentic in your approach; remember that natural engagement with your customers is often highly valued.

3. Prepare target products. You may have holiday-specific stock or items that you’re predicting to sell well; make sure that this stock is prepared through careful stock-take, monitoring, and planning. Don’t go into a sale with half the products you anticipate on selling.

4. If you’re using paid ads or keyword marketing, be smart about it! Searches nearing the Christmas period, for example, peak when they contain words like ‘Christmas’, ‘decorations’, or ‘presents’. If your products were previously advertising, for example, stationery supplies, then perhaps it would be an idea to change your keywords to something like ‘Christmas Cards’, ‘Xmas Stationary’ or ‘Greeting Cards’.

5. Show off your products as the solution. When you give your customers the affirmation that your products are the answer to their gift-giving needs, you’re so reassuring them that they’re making a quality purchase. Does your store sell woollen socks? Great! Those are perfect for the wintry seasons when your socks do the hard yards of keeping toes warm. What about the Camera equipment you’ve just got in stock? That’s the perfect solution to family photo sessions or capturing those special seasonal moments.

There are infinite ways that you can prepare for the holiday season, but Marsello has your marketing covered. With email campaigns, smart suggestions, loyalty programs, optimized designs, free chat, and email support and so much more, it’s the perfect companion to your store for the busy holiday period and more.

Do you have a favorite tip (either one we’ve mentioned, or a fresh idea)? Add a comment telling us a little about what is it, how it works for your store and what makes you love it so much?