June 14, 2010

Summer Segmentation: Merchandise Divisions

Online marketers like to segment by first time visitors, prior visitors, prior buyers, that kind of thing.

Catalog marketers like to segment by recency / frequency / monetary values.

Give this one a try. Take all of your first time buyers who purchased two items. Split those customers into those who bought from just one merchandise division, and those who bought from multiple merchandise divisions. Then measure the long-term value of each segment of customers.

It turns out that, in most cases, customers buying a broad range of products are more valuable than customers who have a preference for just one merchandise division.

So give that a try ... and if you are a web analytics expert, take a look at conversion rates by this level of segmentation!

3 comments:

  1. Anonymous5:00 AM

    Hi Kevin! Have a look at a word cloud I made from your blog, one day my overseas analytics tool was so sloooow...
    http://www.wordle.net/show/wrdl/2165278/Kevin_Hillstroms_Mine_That_data_Blog

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  2. Very cool insight and I can intuitively believe this to be true. Another proxy for number of purchases for first time buyers has been the amount of time spent browsing the site before making the purchase.

    Now if only was possible for me to get a hold of some data and validate this idea.

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  3. Sure, that proxy works too, good job!

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