Businesses understand that some people are more important to their business than others. That's why proper targeting is an essential part of an effective product strategy. Even the large companies typically break down their users into segments. Then they decide which segments to focus on in different scenarios.
In this blog, we will understand the concept of user segments and the steps to segment the users. So, let's begin.
User Segmentation
User segmentation is the practice of dividing potential or existing users into groups that share similar characteristics. The underlying idea is that those groups will likely have comparable behavior and probably respond similarly to marketing/product activities.
When it comes to product design, teams collect a lot of data about their users. One of the biggest reasons to build user segments is to make that data actionable. By segmenting the audience, businesses can tailor content and features to serve their audience (i.e., leverage contextual data in your messaging or features). The better product teams are at segmenting their users, the more personalization they can offer each group.
Marketing and Experience Segmentation
Depending on the goal of segmentation, it's possible to define two types of segmentation:
- Marketing
- Experience
Marketing segmentation focuses on creating effective marketing strategies for a product's target audience. Generally, a market segment consists of a group of people that:
- Have a common set of needs that they want to fulfill using your product.
- Are distinct from other segments (different segments have different needs).
- Respond similarly to a market stimulus.
- Communicate with each other. Since they have a shared set of needs, they can form communities and share the message with their peers. This is the most powerful.
The goal of marketing segmentation is creating a message that resonates with a segment, making it circulate inside a segment (word of mouth). By segmenting users, it's possible to create a more efficient marketing campaign for end users.
Experience segmentation model is a start-to-finish series of interactions a user has with a product. This type of segmentation typically focuses on understanding the needs of users with different levels of expertise. By segmenting users, it's possible to create a better user experience for end-users. For example, companies can learn the needs of experienced users and create product shortcuts to make the process of interaction with a product more efficient for them.
User Characteristics for Performing Segmentation
It's important to layout the information about your users in a way that will assist your teams to understand them. In its basic form, user segmentation is based on the following four parameters of a user:
- Demographic: Properties like age, gender, education level, occupation, or income level.
- Geographic: Geographic areas, such as countries, regions, or cities.
- Behavior: Behavioral patterns that users experience toward using a particular product. These can include buying behaviors (spending and consumption) and desired benefits.
- Technology: The level of users' tech-savviness.
User Segmentation and User Personas
The characteristics listed above tell what information to collect about your users, but they don't tell the reason for doing it. The ultimate goal of product design is to create product features that solve the user's primary needs as best as possible. Different user groups have different needs and desires, and it's essential to conduct research to understand the needs before creating segmentation. Begin by creating user personas for using it as a summary for the user. Collect information about real people who interact with your product and start to find patterns; where the characteristics of users overlap, and build an archetype, or persona, that represents those users collectively. This knowledge assists in adjusting product design to create better usability for them.
Here are a few things to focus on when working on personas:
- Psychological aspects of a target audience
- User behavior
- Cultural segmentation
Ways to Conduct User Segmentation
To get a successful outcome from user segmentation, follow these few simple steps:
-
State the goal of segmentation upfront
It's essential to understand what we want to achieve by segmenting our target audience. For example, the goal of segmentation might be to optimize a sales channel. In this case, we might want to identify a group of users to sell a new product. Select the research methods to use and the data to collect according to that goal.
-
Measure user engagement
The ultimate purpose of product design is to make the product more valuable for people who use it. User actions enable us to see the paths participants took while performing their tasks, as well as the outcome of interaction, be it successful completion or abandonment of the task. Thus, after getting a grasp on your entire audience, take a few users that match a particular user persona, and track their user journeys to find patterns. Then use this information to create segments.
When creating a user segment, pay attention to these aspects of a user journey:
- Time users spend interacting with products
- Customer journey milestones
- Factors causing abandonment of carts
Analytics tools like Google Analytics or Hotjar assist in tracking user behavior data and the paths that users take. Still, it's useful to use additional tools like surveys and interviews to understand why users interact the way they do.
Conclusion
User segmentation is an essential part of user research because well-defined segmentation enables for a powerful action. Also, using user segmentation assists in adopting a particular perspective on a problem. When businesses perform user segmentation, they are able to provide a tailored experience to their users. Contact Oodles UX consulting services for more assistance related to user-segmentation.
