Three Things Retailers Need to Properly Segment Customer Data

March 18, 2019

Most marketers, especially those in the retail industry, understand the importance and value of customer segmentation and personalization. However, that doesn’t mean that most marketers are successfully executing it. The reality is that segmentation and personalization can be overwhelming and dizzying when you start to look at the sheer amount of data, all the possible sources of data and the potential technical barriers.

Yes, retail customer segmentation takes some pre-planning and foundational work, but it doesn’t need to be headache-inducing. Here are the three things retailers need to put into place before they begin to segment customer data.

Task 1: Data Integration

The first step is to identify all channels, vendors and sources of customer data. This could be catalog, online, in-store, email, social media and mobile, just to name a few. Before you even address the technical component of compiling this data, we know that there may be organizational barriers to overcome. All too often the marketing department is divided by channels, reducing opportunities for collaboration and making it more difficult to gain a 360-degree view of the customer.

The key is to identify an executive sponsor, ideally someone who oversees the entire marketing department and can understand the value of bringing together data across marketing channels. The second step is to identify technology that can aggregate all of the data into a flexible and elastic contact database. Look for a tool made for marketers, rather than one that provides marketing insights but still requires a technical team or SQL specialists.

Task 2: Trust in the Data

Once you have all your cross-channel data in one place, the question is whether you trust it or not. Duplicates, old data, wrong data, empty fields and more can wreak havoc on the success of your customer segmentation strategy.

Look for a contact database that includes data cleansing, normalization, matching and merging to ensure the highest data quality. You should also develop a proper data cleansing regimen to maintain data cleanliness levels.

Task 3: A Well-Defined Goal

You have all of the data possible on your customers and prospects. You trust that the data is accurate. Now, you need to create an actual strategy for what you want to achieve with your customer segmentation. “Better personalization” or “more specific targeting” won’t cut it. Instead, think in terms of outcomes such as reduce shopping cart abandonment, increase average customer spend, and increase store traffic.

Once you have your goals in place, you can begin to brainstorm the segments and lists that you need to create and market to. Marketing should be able to own the segmentation process from start to finish, rather than relying on an analytics or technical team, as it’ll make your team faster and more creative.

It’s undeniable that we are living in the era of Big Data, and retailers will either sink or swim. Retail customer segmentation doesn’t need to be overwhelming or scary. If you have ideas for what your marketing team could do with cross-channel data, QuickPivot wants to make them a reality.

Request a demo today to see QuickPivot in action and discuss whether or not it could be a fit.