Building Buyer Personas: Using segmentation to connect with customers
As e-commerce becomes a more prevalent preferred method of shopping for consumers, online sellers now have access to more potential buyers than ever before. However, sellers looking to grow brand awareness or increase sales can often make the mistake of targeting as many consumers as possible. Instead of targeting large, indefinite demographics, e-commerce enables sellers to shift the focus to specific customer types in aims to better resonate with the buyers and create a connection with the products or brand.
Brands seeking to identify the distinctions between their different customers must focus on adopting a targeted marketing approach. Once the brand determines the unique types of customers within their whole audience, a strategy can be set to cater to each group’s needs and preferences.
Creating customer personas is a popular method for sorting and targeting your customer base effectively. Simply put, a customer or buyer persona is a semi-fictitious profile of your ideal customer, built from quantitative and qualitative data and other research. A useful tool for understanding your audience, these profiles inform marketing and sales decisions, help to optimise campaigns and personalise the customer experience to help engage specific customer types well enough to motivate purchase. Getting to grips with segmenting your customers will eventually help with addressing queries from specific customer groups and showcasing products in different use to align to persona preference.
Establishing customer personas
Distinguishing customers to create personas requires an accurate balance of qualitative and quantitative insight.
Common types of quantitative data include:
- Consumer analytics
- Behavioural and transactional data
Common types of qualitative data include:
- Frequently raised customer service inquiries
- Customer interviews and feedback
- Direct discussions with clients
Whilst it may be tempting to segment into a multitude of sub-groups, most sellers will only require 3-5 buyer personas to cover all the groups in a customer base. If too many personas are set, the profiles become more indistinct and difficult to use.
The method of customer segmentation
Extracting existing data is key for establishing a base for the various customer personas. Depending on the brand or products, different information about the target demographic may be more or less relevant, however, age, gender identity location, job title, industry, income, and interest, are commonly included. Sellers that are just beginning their e-commerce journey can utilise competitor data to create a starting foundation about customer preferences and refine personas as more primary data becomes available.
Greater detail during the stage of research is essential for creating a more accurate representation of each consumer segment. Consider where do buyers from this personal typically research information online? What are their favourite social and shopping channels? What is their preferred method of communication? All this information can be a differential factor for brands looking to get their message to the right people in the right places at the right time.
Building on your customer personas
Although the relevance of certain data will vary for each seller, each persona demographic should also factor in how psychology, digital presence, and customer value will affect the profile of the buyer.
Tracking psychological factors such as customer habits, interests, and attitudes can help to analyse why certain sub-groups may be making purchases, or why item sales for particular products have increased. Ask yourself how the goals of each buyer can be achieved through your products, and how can their pain points or concerns be resolved through the purchase? This type of data is often highly subjective, but still critical to understanding what your core customer personas care about. From there, campaigns and value propositions can be enhanced to target consumers more effectively.
A consumer’s digital presence will heavily dictate their interaction with technology and therefore inform your marketing strategy to best suit the target demographic. Delving into this data helps to analyse which platforms the consumer uses to shop or socialise, how often they visit each channel, and whether mobile-friendly advertising will be required to captivate their attention.
Understanding each customer persona’s value is key to ensuring that marketing efforts and long-term profitability levels are tracked sufficiently. To achieve this, sellers can include a customer lifetime value (LTV) to customer acquisition cost (CAC) ratio for each persona. Lifetime value will indicate the projected revenue from a customer during their lifetime shopping with the brand, whilst CAC will track the costs required to secure a new customer. Maintaining an LTV:CAC ratio of 3:1 or higher is commonly recommended for e-commerce brands, although sellers looking to launch new channels or products or generate brand awareness should factored when analysing initial acquisition costs.
Whilst free analytics tools can provide the basic information to get started, cutting-edge segmentation software can be utilised to better analyse and track how psychology, digital presence, and customer value will factor. The capabilities of machine learning to understand customer journeys and how each element of your channels affects each segment’s shopping decisions should not be overlooked.
The buyer personas created can be used to inform your selection of marketing and sales channels, messaging, and product positioning. By understanding the core customer and what they care about, you can now create a strategy that targets the most-used channels for the buyer persona with value propositions that are most likely to resonate and lead to a conversion.
One of the primary purposes for developing personas is to extract the information to understand potential shoppers’ emotional triggers. This can then help brands to develop a strategy that can influence and encourage the audience to shop, whether that’s through using influencer marketing to target younger personas or offering special discounts for customer birthdays.
There are three primary categories of triggers:
- Internal triggers relate to the customer’s thoughts, opinions, and feelings, and commonly include aspirations, fears, insecurities, and stressors
- External triggers are factors that relate to events that not within the shopper’s control such as life changes, obstacles, other people’s expectations, and more.
- Seasonal triggers are often regular and predictable, and will commonly include birthdays, holidays, new seasons, and interest-related or profession-related periods.
Aligning your strategy to better suit the customers’ triggers will not only enhance the customer experience and deliver a more personalised campaign but can also help to understand whether your products fulfil the buyer’s needs sufficiently.
Brands can also utilise established buyer personas to refine the experience even further, through methods such as special homepage alterations for returning visitors from segments with varied interests, personalised content highlighting different payment or delivery options for price-sensitive segments, or social campaigns targeting any of the segment’s data. As the persona process becomes more detailed and sophisticated, you can further define each profile by preferred shopping platforms to create targeted campaigns for Amazon, eBay, your website, and other channels.
Data gathering can also reveal additional avenue for reaching customers, such as identifying shared platforms or content types. For instance, research has found that 73% of consumer rank email in their top two preferences, making it the most popular platform to receive a marketing message from brands for all age groups.
It should also be noted that depending on the selected channel, there may be certain restrictions limiting how users can be targeted or what content can be used. For instance, marketplaces such as Amazon have restrictions for email communications from sellers unless a customer has purchased a product, and even then, the content is restricted.
As e-commerce channels and marketplaces become more competitive each year, incorporating customer personas into marketing campaigns can enhance the likelihood of converting new buyers. Consumers have greater availability of choice online, therefore, brands can communicate with shoppers much more effectively when targeting specific consumer needs, wants or pain points. Instead of shifting the attention towards quantity, sellers can adapt the buyer personas to resonate through knowing what their customers are and what they care about. Consider customer triggers when crafting campaigns to further enhance the experience and personalise the experience for the consumer.
Stuart Conroy has run Activ8 for 20 years and has operated across multiple channels in Asia, Europe and North America. With an understanding of the latest technology, logistics and outsourcing opportunities, Activ8 provides strategy consulting and hands-on solutions to brands looking to manage risk and scale opportunity in online commerce.
Activ8 utilise their experience of being on the Fast Track 100 on two occasions to help brands navigate the scaling process and operate a risk-averse multichannel strategy.
Having worked in investment banking before starting an ecommerce business as well as creating and working with a number of start-ups, Stuart has a great understanding of the challenges facing businesses of all sizes in the modern, digitally-influenced arenas.