Now You’re Talking: Four Customer Segmentation Secrets Revealed by Agent Provocateur
The most successful retailers in the market today are the ones that can describe their customers down to a tee, and know exactly how and where to talk to them. It’s retail 101, yet many retailers constantly struggle to find out who they really need to be selling to and an effective communications strategy that addresses their customer’s preferences on channel, frequency and subject matter.
Martin Bartle, Global Communications and Ecommerce Director of Agent Provocateur (formerly of Net-a-Porter), specializes in luxury and fashion ecommerce. He’s agreed to divulge some insider knowledge on how to connect with your customers that may just surprise you!
Determine Your Data “Flags”
When beginning the important “getting-to-know-you” phase in customer segmentation, it’s important to pinpoint what qualities and characteristics are the most valuable in determining your various target markets. At Agent Provocateur an in-house data warehouse automatically flags customers by value segment, regency, frequency and type of interactions – all characteristics that Martin and his team deemed valuable merits when segmenting their audience for future communications. “We also have a measure of high value potential to help identify customers who may require a greater level of service earlier in the process,” commented Bartle regarding Agent Provocateur’s high-value customers. Through establishing this from the beginning, retailers can really tap into which customers are shopping for what purpose in response to various types of interactions – an invaluable piece of the data-pie that can work wonders in directing your marketing communications initiatives.
Focus on Welcome and Reactivation Programs
It can be difficult to determine exactly how other brands are communicating with their customers, because if they are well segmented, you’ll rarely see most of their messaging. “My impression is that there is too little focus on welcome and re-activation programs and too much focus on generic brand messaging,” said Bartle. It’s important for retailers to know when to share non-specific company updates or industry-related hot topics and when to opt for more minimal levels of communication. People like to be engaged in a conversation, not be “spoken to,” so personalizing a marketing communications program for specific segments can actually boost customer loyalty. And speaking of personalization…
But not too personal! It’s about striking the balance between knowing your shoppers’ retail and communication preferences and knowing where they took their kids for the annual family vacation. Seems like straightforward and fair intentions, but in reality it can be an extremely sensitive and subjective effort when determining what’s considered helpful data and what’s going too far. According to Bartle, both Mr. Porter and Net-a-porter have some of the most sophisticated CRM and personal shopping programs around, so taking note of those doing it right can be helpful.
For most, sticking with a basic approach of gathering this info from consumers’ direct feedback and shopping accounts is 100% appropriate. Segmentation can be improved immensely from this data, particularly when done for the full course of lifecycle management – from beginning to the end of the customer acquisition and retention process. Bartle noted on the personalization of shopper communications, “It’s sometimes hard to see the value in things like personalized emails, but I’ve seen a 10x uplift in response and conversion rates with very simple programs.” Hard to argue with ROI like that!
Customer Expectations of the Future
To be prepared for the “Future of Retail” that has the industry and media constantly abuzz, retailers need to start now. Getting that momentum going can be tricky, but starting with the customer is a safe bet no matter the vertical. “Retailers that don’t know who their VIP customers are or what they want – will lose them,” says Bartle. “It’s built into the mathematics of the problem that high-value customers are most likely to encounter service issues,” and learning how to quickly solve these issues will allow retailers to better serve their entire customer base.
In closing, here is some “food for thought” from Martin Bartle in preparation for a conversation on customer service, experience and interactions during your next board meeting: “If your retail or online offering does not match the ‘always on’, high service expectations of Millennials and Gen Y today, your uphill battle will only get tougher.”
Martin Bartle is the Global Communications and eCommerce Director at Agent Provocateur, a Board Adviser to Sweaty Betty and Managing Director at Arthur Ridley Esq, a consultancy specializing in luxury marketing and online retail. Martin is an experienced eCommerce and online marketing professional whose previous clients include Lane Crawford in Hong Kong, Mulberry, Heidi Klein and Liberty of London. Prior to setting up Arthur Ridley Esq, Martin worked as the Head of Marketing for Net-a-Porter. Martin’s specialties include luxury and fashion eCommerce, online marketing and PR, CRM and multichannel retail.