Reducing the cost of sales by 5 times with the help of segmentation

Testing cold audience segments in the promotion of an online cosmetics store

This is a case study of segmentation for an online store selling medical and decorative cosmetics.
But due to its effectiveness, it can certainly be applied in many other niches.

So, we were working with a store of a Ukrainian manufacturer, which has a lot of body and face care products in its line.
The products are really high quality, which is confirmed even by several collaborations with very famous Ukrainian celebrities.

The problem was that the cost per sale (CPS) from advertising was at the level of $50-60, which did not justify itself economically.
Even with repeat purchases. And the then contractor could not fix it.

“We started, of course, with an audit of the ad account and made a few changes.
Some interests and behaviors were reconfigured.
We also added “abandoned carts” to retargeting campaigns and created audiences of users who visited certain pages of the site but did not make a purchase.

As a result, the average cost per sale (CPS) decreased, but still remained too high in terms of profitability.

Then the decision was made to segment the audience.
According to the store owners (who, by the way, took the most active part in discussing strategy and planning campaigns), their products are suitable for a very wide age range of consumers.
From 18-year-old girls to 60+ year old women. There are suitable products for all of them.

But it is logical that women of different age groups are interested in different products.
In addition, there was a hypothesis that the motives for the first purchase are also different.

That is why working with a wide audience of “W18-60” did not give satisfactory results.

Since the entire brand line is in the “middle +” price segment, it was decided to segment it by age.
Three segments were formed:

  1. younger 18-24 years old
  2. middle 25-45 years old
  3. older 46-60 years old

For the first segment, the main offer was the possibility of a free online consultation with a professional cosmetologist to select the most suitable products from the store’s line.

Representatives of the second segment already know what kind of products they need. That is why we offer a wide range of age-related products, among which every woman will find something that suits her.
In addition, there are separate offers for promotional and seasonal offers, as well as gift certificates.

To attract the third oldest segment, we chose an offer to guarantee high quality products.

In addition, each segment was promoted through collaborations with celebrities and opinion leaders. But for each segment, we selected influencers of the appropriate age category.
In addition, it was decided to test the segments in the five largest cities of Ukraine.

Next, an advertising plan for testing all segments was created for a calendar month.

The result fully justified the hypothesis and the correctness of the choice of segments.
The average cost of a sale was $11.73, which is without taking into account repeat sales.

The tactic was adopted for further scaling.

Translated with DeepL.com (free version)

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