As any good product management professional knows, users are not a monolith. Instead, they are a diverse bunch with different needs, behaviors, demographics, devices, goals, and more. User segmentation helps you categorize these different contexts to make your product as good as possible.
Here’s how to segment your user base to improve user experience and boost engagement.
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What is user segmentation?
User segmentation describes the process of breaking up your user base into groups based on shared characteristics.
Users are diverse, and they have unique behaviors, needs, pain points, financial situations, and so on. Understanding these different cohorts helps developers personalize their product and its overall user experience to better serve each segment.
The thing is, users love personalization. It helps them feel in control, cuts down on unnecessary information, and it can even deeper their relationship with your brand. Segmenting users allows you to deliver a more impactful service that helps them solve their pain points.
For example, if you have a set of users who are struggling to achieve their objectives within your app, you can build detailed onboarding content that teaches them about the features they aren’t using. Of course, that’s just the beginning of the benefits.
How does user segmentation help your business?
User segmentation comes with lots of positives that can help your business thrive.
#1. Personalized onboarding
Users love personalization. They also love streamlined processes. User segmentation helps you personalize your onboarding and make it highly relevant to your users.
Simple questions during the welcome message stage can help you understand why the user has chosen your solution and what they want to achieve with your product. You can use the answers to segment your users and deliver onboarding content that is connected to their goals and needs.
#2. Understand your users
User segments help you break your user base down into manageable chunks. This process can help you understand the different types of people using your product and gain better insights into their needs.
The benefits here are immense. For example, you can alter your messaging to suit different cohorts, tailor your onboarding content, or even focus on new feature development that your audience really wants.
When you know your audience, you can deliver the product they need.
#3. Boost product growth
User segmentation helps you contextualize product usage. When you split users into groups, you can understand which users are using particular features. This data is helpful because it can underline the need to change your messaging or find new ways to boost feature adoption, like using product tours.
#4. Help with user retention
There are several ways that user segments can help you hold onto your users. Firstly, you can analyze segments against loyal users and see what patterns emerge. Some of the things you can discover are things like how particular onboarding flows affect retention. From there, you have a direct path toward personalizing onboarding so you can boost user engagement and retention.
Secondly, you can use this data to prioritize feature development. Give the people what they want, and they will stick around.
#5. Reduce customer acquisition costs
User segmentation helps you target the right customers because you know which particular user characteristics are connected to loyalty and long-term use. That means that you spend less advertising money on users who drop off after a few months, meaning your average customer lifetime value rises.
How to implement user segmentation to boost user engagement
Here is a simple step-by-step guide to ensuring your user segmentation is well thought out and effective.
#1. Set your objective
Before you even think about any particular user segment, you need to think about why you need user segmentation. It could be for any one of the business benefits we’ve listed above. Whatever it actually is, it’s essential to determine what you want to get out of the process.
#2. Establish KPIs
Look at your user segmentation goals or objectives and index them to measurable KPIs. Some of these things will already be KPIs, such as user retention rate, MRR, MAU, and so on.
#3. Measure data
Next up, you’ve got to think about how you are going to measure user data. Product analysis tools and CRM data can help you find out more. You can also use surveys to dig a bit deeper.
The key here is to measure data in line with your objectives. For example, if your goal is to raise the average customer lifecycle value, you can start by analyzing your best customers and see if certain patterns emerge.
#4. Pick your user segmentation approach
There are many user segment approaches you can take. They are all dependent on your product, niche, and users. So think about which one suits you best. You can find a detailed list of different user segment types in our article, Types of User Segments You Should Be Targeting.
#5. Build your user personas
There is a lot of controversy in the marketing and product management world about the value of user personas. When done right, they can be a helpful tool. However, as this excellent article points out, personas can fall flat without real user data, solid research, and accurate representation.
So, if you use personas, ensure you put the time and effort into making them valuable. They can help you visualize your user segments more. Just don’t turn them into a creative writing exercise that is less fact than fiction.
#6. Put your segments to work
Again, this part is very goal-dependent, but you can use your segments in a few different ways if you want to drive engagement.
Let’s explore a few of the strategies you can employ when you understand the different user segments.
Marketing: User segmentation is a big part of marketing. That includes acquiring the right kind of users and preparing content that enhances the user experience for existing clients.
User onboarding: You can also employ user segmentation to personalize your onboarding. This approach is particularly relevant if you have a complex product capable of satisfying different use cases.
In-app notifications: Understanding your customers and their different needs, behaviors, and goals means you can tailor your in-app notifications toward helping them engage more fully with your product.
Feature development: If you know a particular user segment is your best or most valuable type of customer, you’ll have a better idea of what type of new features you can use.
#7. Measure and experiment
Measure the impact of any changes that you make, and don’t be afraid to take a few educated risks here and there. Use your KPIs from step #2 to see how different onboarding, in-app notifications, features, and more drive your onboarding.
Usetiful user segmentation use cases
Usetiful is a powerful way to boost product adoption, user retention, and engagement. Here is an idea of what our user-friendly, no-code tool can do.
Segment onboarding: If you have paid and free users, you can use tags to serve them contrasting yet more relevant onboarding content.
Cross-device support: People access your solution for different computers and devices, often on the same day. Usetiful uses a secure, GDPR-compliant user ID to ensure each user only sees a product tour once.
Custom product tours: Usetiful makes it easy to create effective product tours with our simple, no-code interface step editor. This functionality opens up the door to editing your onboarding content to reflect the needs and goals of different users.
Usetfil can help you deliver specific product tours based on location, language, subscription plan, and other custom segments. Effective user engagement starts with showing them how they can extract maximum value from your product. Doing that requires using contextual and hyper-relevant product tours.
Auto segmentation: Usetiful also allows you to distinguish between first-time and returning users. This option helps you to build customizable tour experiences to drive user engagement.
Getting the most from user segmentation requires solid research, experimentation, and a deep understanding of your users. However, there are a few best practices that can help you on your way. Here are four tips to help you implement user segmentation.
Keep things simple at the start; you can always break down segments into smaller chunks as you become more comfortable
Limit your segments to 6 or below so that you can keep track of them effectively
Focus on groups that can most effectively impact your KPIs and revenue
Combine segments to drive deeper insights.
Final thoughts
Product management is hard, and you need all the help you can get. Thankfully, there are a number of methods that you can use to drive user engagement, like user segmentation.
Usetiful offers users a diverse set of features and tools to ensure the user experience is optimized, from product tours and walkthroughs to onboarding checklists, NPS surveys, in-app banners, and more. Splitting your user base into user segments allows you to target each user more effectively with different messaging and more dynamic and relevant onboarding.
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