Personalisation begins with Segmentation- Key to high CLTV.

Read time: 6 minutes

Let’s consider 2 scenarios:

Number 1:

You build an e-commerce website of your own selling t-shirts (or any other product).

You get 1000 users a day on your website.

On average when people shop from your website, they shop for ₹1500.

You get a conversion rate of 1% on your website. Therefore;

Users= 1000

Conversion rate= 1%

Total orders per day = 10

Everyday business= 1500×10 = 15000

For example’s sake, let’s say the numbers remain stagnant throughout the year then;

15000 × 365 = ₹ 54.75L/year

Now let’s look at another scenario:

Number 2:

Everything remains the same as above. Just;

The conversion rate jumps from 1% to 2.5%

Then;

Number of daily orders = 1000 × 2.5% = 25 orders

Average ticket size = ₹ 1500 (same as above)

Now your everyday business is = 1500 × 25 = ₹ 37,500

Again, for example’s sake let’s say these numbers are stagnant:

Yearly business = 37,500 × 365 = ₹ 1.36cr.

You are getting 1000 users a day on your website in both scenarios which means, you are not spending any additional money on ads.

Still, you are making ₹82.12 Lacs more in scenario 2 than in scenario 1.

That’s the power of the Conversion rate.

My question to you is;

Can you tell me 5 things you are doing on your website to increase your conversion rates?

Do you have 5 solid functionalities, and best practices implemented on your website to convert users who are already coming to your website better?

You are already spending money on Facebook and Google ads to get these users to your website.

But are you doing anything ‘segmented’ to convert them better?

If yes, great, you already belong to the top league here.

No? Don’t worry, this week I discovered a brand that does ₹100 crores a year topline from digital also has no idea about customer segments and personalisation.

That doesn’t mean any business can reach that scale without realising the importance of data segments. The above brand just found an underserved niche and killed with it. They are not growing beyond ₹100 crores now.

When I was working for big bazaar e-commerce, we used to look at this data very closely- How many times does a user open the app before buying?

Typical e-commerce behavior we Indians have, keep adding products to the cart 3 times a day and then shop once a week. (these are the days before quick commerce took over like Zepto and Blinkit).

We realised people open our app 7 times in 5 days before making a purchase.

Next target at hand- reduce these 5 days to 3 days.

What did we play on?

Fear, greed and reward.

Played the game of fear by communicating the lack of supply with items going out of stock soon smartly, gave limited period cashback offers smartly to limited people.

Giving reasons for people to open the app more frequently.

The more frequently they open the app, the shorter the decision-making time.

Reducing the turnaround time from 5 to 3 days across metro cities.

Creating data segments is the most underrated idea of running a successful e-commerce business.

Another example, I am working with a brand right now that does ₹50 Lacs a month in sales today. Started in Jan’23.

Their website conversion rate is at 0.6%. However, the ticket size is ₹20k+

When I asked him what is he doing to convert the users who were registering and not shopping better?

He said nothing specific apart from running remarketing campaigns on Facebook and Google.

Imagine this; you have already spent money on Facebook and Google to get this user to your website once, now you are again spending money on Facebook and Google to get them back, then again you will spend money to get them back the third time.

This is the most inefficient way of running an e-commerce business.

So, what’s the solution you ask?

First, ensure that you have the right weapons to create data segments.

A tool that can help you create these segments based on browsing behaviour as well as based on shopping behaviour.

And do not buy an app or plugin from shopify or Wordpress for this.

The problem with a shopify app or Wordpress plugin is that there is no unified tool that does segmentation and also sends out marketing communication to them.

You may have to install 4 different apps and these apps do not talk to each other.

Hence integrate one customer lifetime tool.

Tools like Clevertap, Moengage, Webengage, Netcore.

These tools integrate with your website and you can pass the critical information from your website back to these platforms with the help of events.

For example,

Add-to-cart is an event and it can be passed with the help of a code back to Clevertap.

Now, you can add more properties to this event.

For example,

Also pass the details of the product like product name, size and colour back to clevertap when someone adds a product to the cart.

Let’s say you sell t-shirts on your website.

You want to target all the people who have added a premium t-shirt in their cart in last 60 days.

You can create a segment of such users and shoot a personalised campaign to them on email and WhatsApp.

Every user that lands on your website is given a unique user ID by these tools that help in user identification.

In e-commerce, the basic user segments that you must create are as below:

Above is the bare minimum.

At any given point of time, you should be able to create a funnel from traffic to registered users to people who are playing on your website to shoppers to repeat shoppers.

Internally we give them interesting names- Crush, Flirts, Lovers, Loyalists so that it is easier for us to think what to communicate with them next..

There could be many such segments that can be created of course. I talk about more segments and communication you can send to them in the Dream Performance Marketing Masterclass. Early bird offer is on and you can avail 10% off by using the code LIVE10.

With segmentation also comes the power of personalisation.

Personalisation has gone beyond your first name, last name etc.

Personalisation should be more on the product.

If I buy a pair of sneakers, tell me what to expect when I wear them, tell me the story of people and what is their experience when they wear these sneakers, how will it make me look.

All these communications can be personalised once you have more behavioural data of the people who visit your website.

Usually, I push my team to create a D0-D14 (Day 0 to Day 14) communication and channel plan for people who register on our website but do not shop.

We have to give them reasons to shop, the reasons could be the brand narrative, reasons to believe the brand, offers, promotions etc. but maintaining constant communication with them is critical.

In fact personalisation is now layered with AI.

The prime example of personalisation + AI is Netflix.

Do you know the thumbnails of the shows that are served on your Netflix account are generated dynamically on the basis of your watch history?

Notice this; a show called ‘Peaky Blinders’ can have one thumbnail for you while another thumbnail on your friend’s account.

Netflix does this on the go looking with data segments and creating personalisation.

This holds true for B2B as well.

B2B typically has a very long sales cycle. Hence following up with constant and automated personalised messages can be critical.

In all the examples above, the channels that can be used are Browser push notifications, E-mails, WhatsApp and SMS.

Start integrating a marketing automation platform with your website today if you wish to convert your traffic better and drive high repeats.

If you want my help in getting this done for your website, reply back to this email.

If you like today’s newsletter and want to learn more about Data segments and retention marketing, Sign up for the Dream Performance Marketing Masterclass where I cover this topic in detail you will also be required to work on a LIVE Bootcamp project to get the complete learning of the topic.

Use code: LIVE10 to avail the early bird offer.

That’s it for today, folks.

Have an awesome Sunday ahead :)

Cheers,

Apurv