Hint: There is none.

There is no singular factor nor fixed set of rules to follow when using sales data and information for customer segmentation.

It's become easier than ever to collect data, analyze, and apply learning from sales data and customer information. As a result, you may be up to your elbows in sales data and customer information. That's a good thing!

All of this information may have you thinking masterpiece but the truth is, data without application is like Picasso without a paintbrush. See, Pablo knew what he wanted to create but I have a hard time believing he could've finger painted The Old Guitarist. You know what you want to create (more sales) and proper customer segmentation helps you paint a masterpiece.

The Very Basics of Customer Segmentation

Never overlook the little things like simple demographic information. Sometimes the smallest identifiers can spark ideas marketing messages that lead to a significant uptick in sales. For example, if you're an online jewelry retailer that sees an uptick in transactions with male customers around Valentine's Day. It's simple to see the value of sending a unique message to males with a purchase history of transactions between January 1st and February 14th versus promoting a product or message to all historical customers. Further, you could segment this crowd to cross-sell products that compliment their previous purchases.

Simple And Effective Grouping

Segmentation based on product or category sales and engagement can help ensure the right message reaches the right person. A great example of this could be a shirt company sending an email to customers that have purchased multiple colors of the same product, announcing a new or exclusive color of that same product.

Beyond The Basics - Advanced Customer Targeting

Through combinations of recency (time since last purchase), frequency (number of purchase and time between each), lifetime value (total amount spent on purchases), engagement (this could include email opens, ad clicks, active time-on-site, and more). An example of this could be sending coupon emails to customers that haven't completed transactions in the previous 6-months but have made 2-4 purchases over the past 18-months while prices have been marked down.


These are just a few examples or ideas for using customer segmentation to drive sales. The more information you have how/when/why your customers make purchases, the better. Remember, that information is the paintbrush you’ll use to paint your masterpiece.