Customer segmentation in retail: 6 powerful case studies
Are you still talking to all of your customers the same way? In today’s hyper-competitive retail environment, that just won’t cut it. You need to use customer segmentation to send each customer unique communications and offers. Here are 6 case studies demonstrating the value of customer segmentation.
Customer insights and segmentation can help you unlock a new competitive advantage, identify opportunities to grow customer lifetime value, and optimize campaign performance.
By employing data-driven customer segmentation, you can improve your performance across every sales channel and customer touchpoint. Customer data platforms (CDPs) like Lexer can help you manage your data effectively, create valuable customer segments, and automatically update audiences across other retail systems.
In fact, Lexer is the CDP of choice for leading brands like Quiksilver, Igloo, Nine West, Rip Curl, Supergoop!, and more. Here are 6 case studies from brands and retailers who have used Lexer’s customer segmentation tools to implement data-driven retail strategies and drive results.
Customer segmentation case studies for acquisition
An excellent customer segmentation example as it pertains to customer acquisition in the retail space is the case of Black Diamond. The business aimed at growing its direct-to-consumer business to improve personalization, acquisition, and retention. This is with a backdrop of a healthy wholesale business and a small DTC team without a dedicated IT team that could provide actionable customer insight.
Black Diamond enlisted the help of the Lexer team to overcome these challenges. The team was in charge of providing customer data and gathering insights into their behaviors. The insights helped the brand develop an agile strategy for customer acquisition and retention campaigns across all its channels.
Using the Lexer CDP, Black Diamond was able to cut their cost-per-acquisition (CPA) in half and double their return on ad spend (ROAS). Additionally, there was a 1,101% increase in the revenue per email when targeting lapsed customers. All of this was achieved using a 5-phased process which included collecting and analyzing historical data, targeted lead generation, and using Lexer’s high-value lookalike audiences to improve customer acquisition.
With the advent of Covid-19, Brand Collective was looking for a way to drive online sales as the performance of their traditional brick-and-mortar stores had significantly been affected. The brand wanted data on their customer base as they looked for new ways to engage these new customers who were increasingly digital-first shoppers.
Using the Lexer CDP, Brand Collective was able to gain holistic customer data in real-time. The easy-to-use Lexer platform built targeted segments across all marketing channels, including their email, mobile, and search. These yielded an action plan that helped the brand take on new opportunities and avoid the risks of the ever-evolving marketplace.
The Lexer team enabled Brand Collective to customize their digital campaigns and messages sent to their segmented audiences. This drove a 220% increase in return-on-ad-spend, a 2x increase in new customer acquisition, and a 5x increase in revenue from paid channels.
Customer segmentation case studies for lifetime value growth
The global surfing brand Rip Curl needed intelligent segmentation to help them identify high-level customers. Additionally, the team wanted to see an increase in impact while still minimizing its digital marketing campaign budget.
The brand decided on Lexer’s CDP to help it gain insights, perform advanced segmentation, and target customers. Additionally, Lexer helped them orchestrate omnichannel campaigns.
By working with the Lexer team, Rip Curl achieved an in-depth understanding of its customer, which would give the brand the insights it needed for high-value customer acquisition. Additionally, due to the advanced audience segmentation and automation, the business could now benefit from customer lifetime value growth.
PAS Group wanted to significantly reduce ad wastage, re-engage lapsed customers, and create unique customer experiences. Additionally, the group wanted its brands to stand out and grow revenue within the highly competitive fashion and apparel industry. All of these would be made possible by linking all customer data to help with data-centric decision-making.
Using Lexer’s CDP, the brand was able to segment its customer audiences and deliver targeted campaigns to recent and lapsed customers on paid social and email. This resulted in a 4x return on their advertisement spending and an 18x overall return on investment. These were achieved through the unification of all online and offline purchase data with loyalty and engagement data, all of which provided a holistic view of PAS Group customer data.
Customer segmentation case studies for retention
Wondercide wanted to rely on the traditional direct mail in conjunction with digital campaigns to help with re-engaging high-value customers. By measuring key customer retention metrics and understanding the factors driving retention in their business, they were able to improve retention rates significantly.
Using the Lexer CDP, Wondercide sent out personalized direct mail postcards that drove an ROI of 600%. The direct mail reengagement campaign targeted lapsed and opted-out customers whose last order was within the previous year. It also targeted inactive customers who hadn’t interacted with the business within two years and lapsed customers whose previous orders had been more than two years past. As a result, the business experienced a 310% ROI for the opted-out segment, 203% ROI for the inactive segment, and 155% for the lapsed segment.
In a bid to increase its holiday seasons sales, Mountain Khakis used the real-time insights provided by Lexer’s CDP to activate segmented campaigns. Specifically, the brand was able to retarget its female gift-buyers with a “treat yourself” campaign that saw a 7.1x increase in sales 2-3 weeks post the campaign.
Additionally, the campaign resulted in a 5x return on ad spend from female customers. This translated to a 49% boost in sales just in time for Christmas and a 47% boost in total customers.
Effective customer segmentation begins with mastering your data
As a business, you need to lean on customer intelligence to orchestrate specific high-value customer segmentation.
Lexer’s customer data and experience platform provides you with customer insights tools, data enrichment tools, segmentation tools, and predictive analytics tools that helps your business identify and target the right audience. As the only CDP built for retail with native tools to support every customer touchpoint, we are well equipped to help you drive incremental sales from improved customer engagement.