Advanced segmentation strategies to boost your website revenue (Webinar)
August 31, 2020
- Website segmentation at work
- Website segmentation strategy steps
- Phase 1: understand the business
- Phase 2: data accuracy
- Phase 3: segmentation tree
Hello there, data wizards!
We are here together with our Founder, Magda Baciu and Ciprian Borodescu, Co-Founder and CEO @ MorphL, talking about advanced segmentation strategies to boost your website revenue.
Now, while we know you know that data health is the core of any data-driven marketing strategy, we still insist on presenting you with some major steps in creating a healthy segmentation process.
Just stay with us and watch the magic happen in our video below:
Lets dig in!
While there are various types of data we are working with in order to gather insights, today we will be focusing on the quantitative side of things. In this case, the main challenge we face is data overload, which means we MUST create a structure that puts things in place.
Website segmentation at work
We will take you through the step-by-step process of building a data analytics segmentation strategy from the ground up. We promise this will help you save a lot of time and extract actionable insights from website data.
Please be aware that even though we will specifically talk about the website conversion rate optimization, this data analytics strategy is scalable and applicable in many online marketing areas.
Here are some funny ways the guys at Spotify are using data. This is not only super fun, but also super smart:
Now, we can all agree that it’s fun to use data in advertising and it actually provides a pretty solid base for it, but let’s move along and see how data can help you optimize your website conversion rate.
All online businesses track data regarding what’s happening on the website, using various tools, but still such a small percentage of these businesses also get value out of this data.
Fortunately, that’s why we are here!
Let’s see how we can contour a segmentation strategy, shall we?
Step 1: Understanding the business
We`ll start by Understanding the business! And in order to achieve this, we will go through a few research steps which will give context to the whole segmentation and data analysis. Please take a moment and focus on context – this is our magic word.
The process continues with checking data accuracy, in order to be sure that we are creating a healthy segmentation strategy.
For a better understanding of this concept, here is how we’d go about building a segmentation strategy for Etsy, the largest global marketplace for crafters and creative people around the world.
As with any marketplace, there are two sides – sellers and buyers. We’ll assume we want to increase the conversion rate for the end buyers
What’s our north star here? Well, you’ll have to sit down with your marketing team, customers support team, web analytics team etc and figure out what the objectives, KPIs and metrics are.
You will see that the most interesting insights are happening when you understand what’s happening on a granular level, this way you can actually take actions that impact behavior and results from the bottom up.
This will imply some micro-actions such as applying a product filter, using the sort feature or requesting a custom order.
The mail reason we do this is to notice behaviour patterns based on these micro-events as part of the segmentation strategy.
The other thing you really want to understand is your main customer journeys. For example, a new customer that isn’t logged into their account, can only see one purchasing option – the Add to cart button.
Meanwhile, a customer that is logged in will have an additional purchasing option – the Buy now button. Pretty neat, ha?
Last but not least, we have to talk about understanding your audience, the context we mentioned previously. Don’t get intimidated by all these steps, you don’t have to take all of them when thinking about your audience. Just take the resources you have and maybe go through the first 5 steps. That should be enough for now.
Next we will focus on understanding the percentage of data that is accurate. Stay calm, in our experience we have never encountered a single business that was 100% correct.
Unfortunately, checking the data integrity before investing time in data analysis is not a step to skip. Just take your time and go step by step.
Step 2: Auditing the Analytics data
This being said, we now know the basics needed to build a segmentation strategy – so, let’s do that!
Step 3: Building the segmentation strategy
Here is a simple representation of how we go about segmentation. We all know that we can segment the traffic by age, gender, location, device, source etc but when you combine these simple variables with micro and macro website interactions. I promise you good things are yet to come!
It is advised you start with a single primary question – a question that is based on only one of these segmentation variables.
After that, we can go into more layered questions that take into consideration a combination of two or more variables.
Lets get back to our Etsy example and take a step forward.
This framework is basically a different representation of the framework illustrated above. So, as you can see, we are starting with a primary question, based around one variable – the user’s device.
This question will result in the data you see on the screen. The purpose of the primary question is not to give you actionable insights, but to help you get started on the series of more complex questions.
Once we have this settled, we dig deeper into this segment by asking secondary questions. That’s merely combining the variable we used for the primary question, with a second variable.
Take a look at the numbers below, as we start noticing interesting patterns. Seeing that those who search have a very high conversion rate, the question is: In what creative ways can we use the search in other website sections, starting with desktop.
This is the first step in creating a hypothesis to test.
Going even deeper, we repeat step two by adding a third variable to the mix.
After this, we can easily observe that in our example it wouldn’t be a good idea to build advertising campaigns where we promote custom products and target men.
You could keep adding variables, depending on how much traffic your website has and how complex it is. In some cases, it might not make sense to go deeper that 2-3 variables for segmentation.
Hopefully you got a few ideas that you can apply on your business right away, and put your data to work asap.