Why customer segmentation is so important for brands in 2023

Alex Genov, head of marketing insights and customer research at Zappos discusses the need for customer segmentation and meaningful personalization in CX

Add bookmark

Adam Jeffs
04/24/2023

David Hicks, founder and CEO of TribeCX and facilitator of our CX Masterclass speaks with CX expert Alex Genov, to hear about efforts by online retailer Zappos to understand customers, learn how to segment them and apply insights to optimize and personalize customer journeys.

Genov, head of marketing insights and customer research at Zappos, explains that the retailer is on a journey of customer-centricity, building an experience that recognizes that not all customers are the same. According to Genov, brands must re-evaluate their customer experiences and segment customer bases in meaningful ways. At Zappos, this segmentation is based upon behavioural and attitudinal analysis of customer data.

"We have to realize, especially organizations with millions of customers, that customers are not all the same," says Genov. "They have to understand the need to segment their markets in a meaningful way."

Once a business has defined its customer segments, Genov advises brands to develop an understanding of which of these segments the business can cater to best. While it is of course important that all customers be treated well, going above and beyond for those high value segments can help a brand to ensure the best possible return on CX investments.

Diving into customer insights allows Zappos to track who comes to the website then deliver the most relevant content to them and develop an understanding of how best to contact different segments about products or offers. These insights allow Zappos to personalize experiences in a way that is meaningful to its customer segments, something Genov sees as critical.

This drive for customer insights has led Zappos to implement a new metric, the Net Trust Score, which has become its most reliable metric for predicting which customers will be detractors or promoters.

Zappos notes that the significance of the Net Trust Score means that all CX practitioners must ask themselves if the benefit of initiatives on the bottom line of the business is balanced against any impact they may have on customer trust.

This interview is part of a mini-series with CX Network's Masterclass graduates. Click here to watch insights from our graduates who work for Wayfair and TUI.

If you found this article interesting, you can share it with your professional network on LinkedIn or with the wider world on Twitter.