Before we get into why “segmentation” with web analytics can be highly valuable to your site’s performance and profitability, let’s first define what the term means. In the area of data analytics (and in simpler terms), “segmentation” means taking your site’s visitor base and dividing it into specific, homogeneous groups based on certain characteristics and criteria.
Typical items site managers may base their segments on include but are not limited to:
- frequency of visit
- frequency of purchase
- geography (IP addresses)
- pages viewed
- order size
So, why is segmentation important?
How can segmenting your visitors be useful? One of the most significant things proper segmentation can do is it will allow you to better understand your customers. And the better you understand your customers, the better you will be able to sell to them. Segmenting will help you organize your customer/visitor base and will make it easier for you to delve deeper into particular trends and behaviors of your customers.
Once you’ve created your segments, you must then continually monitor and evaluate the behaviors and actions of each segment. When you do so, you will be able to create effective triggers that will push the right types of products or services, discounts, offers, call-to-actions, and so on to the right group of visitors at the right time. This will serve to dramatically improve your conversions. Furthermore, the proper segmentation will allow you to see which of your customers are the most profitable to your company, as well as those that aren’t and are hurting your conversions, and thus give you direction towards where your attention is required most.