Customer segmentation is critical to retail.
Let us first try to understand what customer segmentation is. It is the understanding of customer profiles based on various factors related to demographics, spending, and frequency. Customers are divided along the lines of frequent high spenders, non-frequent high spenders, frequent low spenders, and non-frequent low spenders. A business must create separate promotion and outreach plans for all these categories. A standard one-size-fits-all strategy will do very little to nudge the customers into making purchase decisions on a repeat basis- the gold standard for all businesses in retail to stay profitable.
Let us look at a few ways customers from each category can be brought to the purchase stage regularly.
Frequent High Spenders
Frequent high spenders are not looking to save money. They love to purchase and stay up to date with the market. A frequent high spender is constantly looking for higher satisfaction levels, more innovative products, and more opportunities to buy unique items. Creativity and out-of-the-box thinking are key to maintaining such a customer.
Non-Frequent High Spenders: Non-frequent high spenders are people who have enough spending capacity but are occasional or emotional purchasers. Events like festivals, anniversaries, and birthdays are important to them. Customers in this segment are generally from the upper middle class of society who love a big fat celebration, a memorable occasion and are frugal spenders on other days. As a retailer you should try to understand the inner workings of this class of people, those little details that matter to your customers. This will help you create more causes for your customers to purchase your products. With Zithara’s marketing and communication capabilities, you can easily capture and capitalize on these important moments in your customer’s life.
Frequent Low Spenders: This category of spenders probably likes your products but is cautious about spending too much. The goal in such a scenario is to nudge your customer in a way that triggers them to increase their total bill value over time ultimately converting a low spender into an average or a high splendor.
: Non-frequent low spenders are the category of customers that are most likely to be lost in the coming time. They need immediate and targeted attention. Customers might be losing interest due to product fit, more options available easily and at a lower cost, poor customer experience journeys, poor post-purchase experience, negative word of mouth, or other unfavorable causes.
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