Yoyo’s Purchase Behavioural Segmentation is changing the way retailers market to customers

| September 9, 2019 | By

Yoyo has lunched Purchase Behavioural Segmentation to enable retailers to segment and market to shoppers based on their spending behaviour.

Yoyo's Purchase Behavioural Segmentation is changing the way retailers market to customers

The problem with traditional customer segmentation

Customer segmentation is the process of filtering customers into groups (or segments), based on a variety of characteristics so that marketers can better target their campaigns.

Over 80% of consumers say they are more likely to do business with a company if they receive genuinely personalised experiences (source: Edelman), making it essential for retailers to target their customers with messages that can meaningfully resonate with what they like doing, as well as who they are.

Attempts to personalise the way physical retailers talk to their customers have traditionally relied on broad, siloed segments. 

Attributes like gender, location, income, and occupation are valuable, but only provide a one-time snapshot, and reveals limited, contextual understanding of how customers actually behave in the marketplace.

More advanced CRMs that can group customers based on marketing campaign engagement – like email open rates, or product webpage visits – have the same problem, remaining too presumptuous and clumsy and lacking real ROI measurement.

How Purchase Behavioural Segmentation can change the way retailers market to their customers

With too much emphasis placed on finding out who customers are, rather than what they do, it’s no surprise that only 33% of companies say they find segmentation impactful.

Look to ecommerce-only merchants and we see a more successful model. The likes of Amazon and Netflix are able to deliver hyper-targeted marketing and recommendations based on how their customers behave and engage with their brands in real time.

However, this granular level of segmentation has completely eluded physical-only stores and multi-channel retailers are unable to deliver an integrated marcomms strategy that consistently delivers hyper-targeted messages to both in-store and online customers.

Yoyo enables retailers to segment and target all of their customers based on the behaviours that actually matter – the way they spend their money.

Yoyo's Purchase Behavioural Customer Segmentation is changing the way retailers market to customersYoyo enables retailers to segment and target all of their customers based on the behaviours that actually matter – the way they spend their money.

How do we do this? We’re the only technology platform that can match the identity of both in-store and online customers to the items they buy.

Through a simple transaction API, Yoyo extracts full stock keeping unit (SKU) level basket data from any point-of-sale, revealing who each customer is, as well as when, where and what they buy. 

This opens up a whole new level of customer understanding, enabling retailers to segment customers into behaviour groups, with hundreds of conditions to choose from, including:

  • products they’ve bought
  • their favourite time to shop
  • first purchase
  • frequency of purchase
  • average spend
  • outlets they’ve visited
  • projected yearly spend
  • when they’re beginning to slip away.

Whether on or offline, retailers can now design their marketing strategy around the customer behaviours that really matter to their bottom line.

Consumers will shop with a retailer three times more frequently if they are provided with genuinely personalised experiences (Epsilon)

What is the value of Purchase Behavioural Segmentation?

In the past, a retailer spent a fortune to find out that a 24-year-old female who works in IT, earns a certain salary and lives in a certain area was most likely to buy their lead product. 

The retailer then created a tailor-made marketing campaign, which hopefully resulted in high engagement rates. However, there was no way to find out if this group actually went on to make the desired purchase.

Purchase behaviour segmentation is about engaging with a customer based on what they do, not just on who they are – and it gives retailers the ability to measure the ROI on every campaign they run.

A retailer could instantly identify that 25% of customers who bought X, regularly bought Y, enabling them to create and deliver a campaign that incentived the other 75% to follow this desired behaviour.

What’s more, the retailer can see whether these customers actually went on to make the desired behaviour – a clear value to the marketing ROI.

The ability to analyse purchase behaviour also reveals which lifecycle stage customers are based – from the moment they make their first purchase. This means retailers can react to a sudden change in behaviour and do something when it looks like a customer is about to churn. 

Yoyo could create a segment of customers who historically make a purchase three times a month. If one of these customers stopped displaying this behaviour over a period of six weeks, a campaign could trigger that incentivised them to return. 

In short, purchase behavioural segmentation enables retailers to devise, deliver and accurately measure campaigns that can target their most valuable customers, reverse churn rates, and measurably increase customer lifetime value (CLV).

How Yoyo-powered Purchase Behavioural Segmentation works 

Yoyo enables a retailer to create and save customer segments, which can then be attached to a marketing campaign on Yoyo’s Marketing Campaign Builder.

Retailers have the option to group customers just by Lifecycle Stage or they can choose to further narrow down their customer segment by choosing attributes, which range from “Last Product Purchased” and “Favourite outlet” to  “1 Year Projected Revenue.

What are Lifecycle Stages?

What are Lifecycle Stages?

New:
Customers who have registered to a Yoyo-powered app, but have yet to make a first purchase

Active:
Customers who are highly likely to return

Slipping Away:
Customers who are less likely to return

Churned:
Customers who are highly unlikely to return

Power Customers:
Customers whose average transaction value is defined as high

What segmentation attributes does Yoyo enable retailers to choose?

What segmentation attributes does Yoyo enable retailers to choose?

Retailers can now segment real customer behaviour like never before and tailor marketing strategies to do anything from nurturing the most valuable customers, preventing customer slippage and measurably increase customer lifetime value (CLV).
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