The Power of Customer Understanding: Putting Data to Work
Let’s get real about one of the most misunderstood yet crucial aspects of business: understanding your customers. It’s not enough to glance at some demographic data or launch a generic email blast. It’s about diving deep—getting into the minds, hearts, and wallets of your audience. Jonathan Lo, Founder of Salt Foundry and fractional Chief Marketing Officer, made this crystal clear during his presentation at the CEO Works Luncheon, hosted by Santa Cruz Works on September 26, 2024.

Lo highlighted the journey of Overstock—a company that most people know for its wide selection of discounted home goods. But how did Overstock go from just another e-commerce platform to a company that saw 12 quarters of positive EBITDA? The secret sauce wasn’t in the discounts; it was in how Overstock approached customer segmentation.

Overstock’s Secret Weapon: Customer Segmentation
Here’s the thing: customer segmentation is not just dividing people by basic traits like age or income. It’s about understanding their deeper needs, motivations, and behaviors. There are five ways you can segment your customers: demographic, geographic, psychographic, needs-based, and behavioral. 

Overstock recognized that not everyone shops the same way. For example, one group of customers were “Savvy Shoppers”—people who live for the thrill of finding a bargain. For these customers, the adrenaline rush of scoring a discount was just as important as the product itself. Overstock knew that offering personalized discounts and highlighting seasonally relevant offers was the way to win over this crowd.

Savvy Shoppers vs. Reluctant Refreshers: Knowing Your Tribes
On the other hand, there were the “Reluctant Refreshers”—customers who were less concerned with finding the best deal and more focused on convenience. These folks didn’t want to spend hours shopping; they just wanted their home to look good without too much hassle. Overstock catered to this segment by emphasizing ease of use, streamlined product suggestions, and ready-made room sets that made home decorating a breeze.

Personalized Marketing: The Key to Long-Term Loyalty
Overstock didn’t just blast out one-size-fits-all emails. Instead, they sent tailored recommendations based on each customer’s browsing and shopping behavior. If you clicked on a particular sofa but didn’t pull the trigger, you could expect a friendly reminder in your inbox a few days later, with potentially a discount code thrown in to sweeten the deal. It’s like having a personal shopper who helps you find and buy the products you want. 

Results That Matter: 12 Quarters of Positive EBITDA
The results? Overstock saw significant boosts in customer engagement, loyalty, and ultimately, revenue. Lo pointed out that the company's 12 resulting quarters of positive EBITDA were generated by its customer-first approach. By deeply understanding what motivated its customers and tailoring the shopping experience to those needs, Overstock wasn’t just selling products—they were building long-term relationships.

The Takeaway: Empathy and Data Are Not Optional
So what’s the takeaway? Jonathan Lo’s presentation underscored one simple yet powerful truth: in today’s business world, empathy and data are not optional. If you don’t know your customers at a granular level—what they want, what they value, what frustrates them—you’re just guessing. And in a market as competitive as e-commerce, guessing isn’t good enough.

Learn More: Insights from Jonathan Lo’s Presentation
Understanding your audience better than they understand themselves is the key to not just surviving but thriving. Whether you're running a small startup or a global brand, segmentation, personalization, and a deep understanding of customer needs will give you the edge.

Want to hear more about Jonathan Lo’s insights? Check out the full recording of his talk in the image link provided. If you’re serious about leveling up your business, this is one presentation you don’t want to miss.

Want to learn more about how Salt Foundry can improve your marketing strategy? Check out their website at https://www.saltfoundrystrategy.com.