Data strategy frameworks that you should be familiar with
Efficient and well-engineered customer segmentation makes it possible to better understand customer behavior and allows retailers to react quickly and more effectively
Everyone knows that it is better for retailers to retain existing customers than to acquire new ones.
This is because repeat customers lead to a greater ROI and cost 5-25 times less, which means it is particularly important that retailers retain the right customers. This is why they closely monitor customer retention rates.
The problem is that this combines many different types of active customers into a single KPI. In order to effectively improve customer retention over the long term, companies need to understand active users as they flow through each phase of the customer lifecycle.
Automated processes allow merchants to segment those unique customers based on their purchase behavior. Through a variety of machine learning algorithms used for both online and offline payments, a variety of merchants are able to understand the entire consumer lifecycle. As a result, merchants can send relevant messages in the right place at the right time based on which stage the user is currently in.
Payment processing creates customer segments in a way that adapts to all types of merchants—from small to large companies. The definitions of the customer segments are not clear or fixed, as they are dependent on each retailer’s individual characteristics.
Active customers can be found in one of three different retention stages:
Inactive customers are segmented into churned customers and lost customers.Churned customers consist of two types:
In addition to the number of customers in each segment, it is important to monitor transition trends. In this context, the following questions are extremely important:
The targeted segmentation of financial data combines important information and data points in order to break down siloed data. As a result, merchants benefit from optimized customer identification across all their channels so that they can now focus on what is most important for their sustainable growth: the performance of their existing and resurrected customer base.