User Segmentation: How to Create Personalized User Experiences

What is user segmentation?

At UserGuiding, we take user segmentation very seriously. So much so that it is one of our main use cases. 

Check out how we define the whole process:

User segmentation is the process of dividing users into distinct groups based on shared characteristics to tailor marketing, products, or services more effectively.

I can hear you thinking, so what? How does this work?

Let’s say that your onboarding material hasn’t been effective in Germany for some time. You also noticed that MacOS users tended not to complete the process. 

You sat down, crunched the numbers, and created a plan: You need a targeted campaign to engage MacOS users in Germany.

You will segment these users based on these shared characteristics: operating system, language, and country to define your ideal audience for that campaign.

Voila! MacOS users who speak German and live in Germany will now have a personalized onboarding experience that will engage them better this time.

💡A section from our latest newsletter explains the process even better than I do:

“Segmentation isn't just important—it's the secret that transforms your platform from a one-size-fits-all solution into a personalized experience.

What do I mean by that? Simple. Tailor your campaign by offering varying discount levels to different segments, you can encourage upgrades and upsells more effectively.”

Segmentation helps you explore these growth opportunities with a customer-centric approach. 

Because it is based on user behavior analysis and data-driven decision-making, it makes achieving your product goals easier.

User segments versus user personas

Segmentation helps you identify who your customers are, while personas help you understand why they behave the way they do. 

But let’s see the differences a bit more in detail👇🏻

User Segments

User segments focus on customer groups based on shared characteristics. 

These criteria are demographics (age, gender, location), behaviors (purchase history, usage frequency), psychographics (interests, values, lifestyle), and firmographics (company size, industry).

The whole purpose of this is to help you create targeted campaigns, improve user experience, and streamline product development.

User Personas

User personas, on the other hand, focus on fictional representations of ideal customers. The most common way to do this is creating profiles.

When creating these profiles, you should include demographic information, what they want to achieve with your product or service, obstacles they currently face that no product out there can’t seem to solve, and how you expect them to interact with your product or service.

And most importantly, you should use direct quotes from real users to bring the persona to life.

The purpose of this process is to help you understand the needs, motivations, and behaviors of specific user groups.

How they work together

You first start with segmentation. This will help you identify broad categories of users—like beginner, intermediate, and advanced users.

With user personas, you will dive deeper into the specific needs and behaviors of individual segments.

For example, let’s create a user persona profile for Sarah, who has just signed up for a paid plan for your product. She’s a 30-year-old marketing manager who is not very tech-savvy. So, you place her under the beginner segment.

You know she wants to get up and running quickly with your product to solve a particular problem like managing social media campaigns, perhaps.

But she’s too easily overwhelmed by complex interfaces and too many options. Sarah also prefers not to interact with customer support unless absolutely necessary, relying mostly on FAQs and tutorials.

This profile should tell you that you need to provide step-by-step onboarding tutorials that walk through the main features and offer a basic understanding of the tool, preferably with a lot of interactive elements like checklists and tooltips.

In short, by combining the segment and persona, you will improve Sarah’s satisfaction with your product.

5 Ways User Segmentation Can Help Your Business

The boring answer: Segmentation helps increase retention rates and revenue. 

But you’re not here for the boring answer, are you? Because the real question is how. 

How can user segmentation get your business up and running or boost it?

Ask and you shall receive. Continue reading to find out how!👇🏻

Identify patterns and common attributes

One of the advantages of user segmentation is that it helps you understand what your customers need. 

Behavioral segmentation is particularly useful in this regard. It focuses on user actions and interactions with your product or service, rather than just demographic data like age or location. 

Think about engaged users who have strong brand loyalty and make frequent purchases. They are usually interested in trying new features as well. You get this data through behavioral segmentation.

Once you segment users, you should start to see patterns emerge. This usually happens through usage frequency and user engagement.

For example, you might notice that users who engage frequently might also be those who use advanced features or spend more money, while occasional users might only use basic features or have lower spending levels.

So, your next step will be nurturing this relationship to its maximum potential. 

Marketers can target this highly invested group of users by giving loyalty rewards, while users who show signs of dropping off can be sent personalized re-engagement emails.

Create qualitative user personas

We’ve already discussed how segmentation helps you recognize the unique needs and preferences of different user groups.

I’m going to introduce you to one more term: Needs-based segmentation.

Daniel Kyne, co-founder and CEO of OpinionX, defines needs-based segmentation as 

“the process of identifying groups of people based on their shared experience of a specific problem or need.”

This method is not helpful on its own and should be combined with at least one more approach like a priori or “what you already know” segmentation—behavioral, demographic, and psychographic data fall under this category—or value-based segmentation—financial focus aka monthly recurring revenue (MRR), average purchase size, etc.

Here, it is important to differentiate between descriptive-first and needs-based segmentation types to understand how one affects the other.

Descriptive-first segmentation uses the available descriptive data like demographics, firmographics, and customer value, then works its way up to identifying the most important need each group experiences.

Unlike descriptive-first, needs-based segmentation starts with identifying all the different needs your users might have and then using discriminant analysis to see “which descriptive data point has the strongest relationship with each need.”

You can read the rest of Daniel’s article here for a step-by-step process of needs-based segmentation. 

Basically, needs-based segmentation helps shortlist these core needs, emphasize the user’s financial value for your company, and filter the data to create the most accurate qualitative user persona.

Determine your business priorities

User segmentation is important for all teams, but it is especially important for product managers who have to make sure that new users are attracted to the product.

In other words, they must not fall for the myth of the average user—where companies prioritize new feature launches based on frequently voiced, assuming that these represent the needs of all users.

What happens next? 

They end up developing a bunch of features that don’t account for the diversity of user needs. Those features only appeal to only a small subset of users and other users feel alienated.

The solution is simple. 

To avoid the “average user” trap and choose the right business priorities, rely on user segmentation that looks at distinct needs, behaviors, and motivations rather than treating all users as the same.

Cohort analysis is also beneficial for this. It is a method where users are grouped based on when they started using the product or how they behave to track their needs over time.

With this change, you will make smarter product decisions that serve diverse user needs, avoid the pitfall of chasing trends based on superficial feedback, and ultimately build a product that resonates with all users, not just the loudest ones.

Deliver a tailored user onboarding

As I said in the introduction, user segmentation is directly related to storytelling.

And user onboarding is one of the areas where this effect is present the most. After all, what is a story without its characters or an onboarding experience without its unique user?

Each persona is an embodiment of the typical user within a particular segment, with their own background, goals, pain points, and emotions. 

Just as in any good narrative, these characters 

• face obstacles (pain points), 
• have aspirations (goals), and 
• interact with your product (the "plot") to resolve those obstacles and achieve their goals.

And they are more likely to engage with your product if they understand that it caters to their needs. You will get to that point by delivering tailored and personalized user onboarding.

Bas Hennephof’s episode on the Mindful B2B Marketing podcast sums this up pretty well:

“For instance, an activation experiment could be that in our onboarding funnel, we ask some qualifying questions to our new users and based on their answers, we provide specific template options for them. And because then we can match the customer and the specific template better … and you can measure how many people actually start working with that template, publish that template, have that template on their website and start gaining visits on that.”

Instead of the one-size-fits-all approach, segmentation enables you to customize the onboarding journey from the very first interaction.

Check out this example from Grammarly:

You might find this a very simple onboarding question, but it actually works wonders. How?

People using Grammarly for school use it for basic writing improvements such as students or bloggers.

Those who use it for work need advanced writing and editing tools such as writers and marketers. And those who use it for other projects are usually teams or organizations that require enterprise-level features like team collaboration and admin controls.

Therefore, Grammarly will show each group different features and give different suggestions. Professionals will get weekly writing reports, while school users will be encouraged to add Grammarly’s Chrome extension.

The No-Code Way for User Onboarding: UserGuiding 

You can build this onboarding journey in-house, but it will probably cost you a lot of time, require lots of coding, and pushback of other important projects.

What if I told you that you can do it hassle-free, set it up quickly, and collect data like a breeze? 👇🏻

UserGuiding is one of these no-code tools that helps you create a more efficient onboarding experience where you can show the value of your product to users faster.

Just as Bas Hennephof mentions matching specific templates to specific customers, UserGuiding also triggers a welcome survey to identify the user's technical proficiency. 

Based on the answer, the user sees different resources and tooltips to complete their onboarding journey.

Ready to onboard users faster by creating interactive onboarding experiences? 👇🏻

🚀Click here to see UserGuiding in action🚀

Provide relevant and engaging experiences

Similar to what we discussed above, user segmentation also helps you deliver highly targeted and personalized customer experiences.

See how Notion masters this delivery:

The first time a user interacts with Notion’s AI feature, they see these tooltips that show how they can use the feature effectively. 

The process behind this is simple: Segment users who have not used the AI feature and show the tooltips when they trigger AI for the first time.

Deliver segmented messages at the right time

As you’ll recall, we also talked about how segmentation can help you develop targeted messaging that resonates with specific user groups.

Your marketing team can create unique and optimized campaigns that focus on segments most likely to convert.

Let’s look at an example from Sephora, one of the top personal care and beauty retailers in the world:

The emails look almost identical. However, only customers in Canada get a discount on their next purchase in exchange for signing up for text updates. Why?

It’s possible that customers in the US are already converting better than the ones in Canada, Sephora’s segmentation aims to send this message to increase purchases and drive engagement in Canada.

Win back old customers

Most companies focus on getting new customers and say goodbye forever to the old ones (or one-time buyers) without considering re-engaging them.

This is a crucial mistake that you should never make.

Instead, analyze psychographic data (interests, values, and lifestyle) to understand the reasoning behind their departure or to win them back.

Similarly, technographic data, including device usage, software preferences, and online behavior, can provide insights into how customers have previously interacted with your brand digitally.

Then it’s time to create a re-engagement plan.

How to do that?

See how Webflow handles inactivity like a pro:

It doesn't offer discounts or exclusive offers (which might fit into your business model), but instead, it shows the user what they have been missing since they left. 

Webflow reassures these inactive customers that their product is still worth using.

This is how you restore brand loyalty!

A lot of information, many new terms and tips to take in… It can be overwhelming.

Take a deep breath, stretch, then come back so we can take a moment to recap what we’ve discussed so far.

Think of it as a commercial break, but instead of irrelevant ads, I’m going to summarize all the juicy points of this article up to this point👇🏻

• Segmentation enables personalized user experiences by tailoring campaigns, onboarding, and messaging based on specific user characteristics. 
• User personas complement segmentation by providing deeper insights into the motivations and behaviors of specific user groups.
• Segmentation helps you prioritize features and campaigns based on real user needs, not generalized assumptions.
• With user segmentation, you can identify opportunities for growth, such as targeting loyal customers with special offers or re-engaging inactive users based on behavior.
• Pay attention to the storytelling aspect of segmentation. It allows you to craft tailored "stories" that resonate with specific users and their unique needs, goals, and pain points.

Types of user segmentation with examples 

Customer data comes in all shapes and forms and we welcome them all! However, it is important to know what to do with that information. So how will you know?

Just as you segment user groups, you will also segment your target audience’s data. Putting user data into different categories will allow you to keep track of different metrics like engagement, feature adoption, and more.

Let’s take a look at this example from Hotjar:

If you take a closer look, you’ll see that the dashboard has a separate chart for new and returning users (which falls under behavioral segmentation), countries (demographic segmentation), devices (technographic segmentation).

Different segmentation types will reveal different user stories for you. So without further ado, it’s time to go deeper into how these types work. We’ll use Nike as an example.

Want an overview? Don’t worry, I got you👇🏻

Behaviors: Product Usage, Purchase History

Behavioral segmentation refers to the process of dividing a user base into distinct groups based on their behaviors, actions, or interactions with a product or service. 

This can include factors like purchasing patterns, product usage frequency, brand loyalty, or response to marketing efforts.

Let me put this in context for you. The Nike Run Club app does an exceptional job at using behavioral segmentation to track and increase feature engagement.

Through this app, Nike collects data on users' workouts and activity patterns. If a customer regularly tracks their runs or workouts, Nike might suggest new challenges, personalized workout plans, or premium content like exclusive training programs. 

They also send motivational messages or give achievement badges based on the user’s activity frequency.

Demographic: Age, Gender, Location

Nike uses demographic segmentation to tailor its products and customer experiences based on specific characteristics of their users, such as age, gender, income, and geographic location. 

By understanding these demographic factors, Nike can create targeted marketing campaigns and design products that resonate with different customer groups. Here's how Nike applies demographic segmentation in user segmentation:

Age

Nike designs products, such as sneakers and apparel, that appeal to younger audiences, typically by leveraging trendy, stylish designs and collaborating with athletes or celebrities popular with this demographic (e.g., their partnerships with youth icons like LeBron James or Serena Williams). 

Nike also promotes active lifestyles for teens through campaigns that highlight athleticism and school sports.

Gender

Nike has increasingly focused on developing products specifically for women, acknowledging different body shapes, athletic needs, and fashion preferences.

Their Nike Women campaigns, for example, promote empowerment and active lifestyles, while product lines like Nike Training and Nike Running include designs tailored to female athletes.

You’re probably familiar (perhaps all too well at this point) with Nike’s “Just Do It” campaign. However, to show “appreciation to the new generation of female athletes”, Nike introduced “Dream Crazier”.

“So if they want to call you crazy? Fine. Show them what crazy can do,” Serena Williams concludes the 90-second ad. But it actually tells the story. The story of gender-based inequality women in sports has been facing for decades. 

This is also the story of Nike being there to support those successful athletes as much as they’re there to support you.

Make sure to watch the entire campaign video for inspiration:

Location

Nike uses demographic segmentation (but specifically localization) to adjust its products and campaigns to fit cultural preferences in different countries.

For example, Nike collaborates with local sports teams or athletes (like soccer in Europe and cricket in India) to appeal to regional interests and sports cultures. They also tailor their designs to fit local aesthetics and climate needs—lighter fabrics in hotter climates or footwear suited to different sports traditions.

Psychographic: Interests, Values, Motivations

Psychographic segmentation uses psychological traits such as values, interests, and lifestyles to group users.

We’ll continue to use Nike for consistency so you can see how different segmentation types come together to create a well-functioning (and successful) system.

Psychographic segmentation is actually a key element in shaping its brand identity and building deep connections with different customer groups. 

Nike uses characteristics like interests, values, and lifestyles to create a sense of belonging and motivation for each segment.

Interests

For those who are interested in sports fashion, Nike’s product lines like Air Jordans, Nike SB, and collaborations with high-end designers target consumers who are motivated by stylish, limited-edition releases. 

These products cater to fashion-conscious individuals who care about the aesthetic side of sportswear, not just its functionality.

Values

Nike has embraced sustainability as part of its brand values, targeting consumers who care about environmental impact. 

The brand has made efforts to produce eco-friendly products, such as those using recycled materials in their Nike Air or Nike Flyleather collections. This appeals to environmentally conscious consumers who want to align their purchasing decisions with their personal values about sustainability.

Motivations

Nike strongly appeals to customers who are driven by competition and performance. Whether it’s in professional sports or amateur fitness, Nike targets athletes who aim to be the best, constantly improving their skills and striving for excellence. 

This segment is motivated by performance-enhancing products and the desire to surpass personal or competitive limits. Nike’s high-performance products, like the Nike Zoom or Nike Vaporfly running shoes, are designed for those seeking to optimize their athletic abilities.

Firmographics: Company Size, Industry

Firmographic segmentation categorizes users based on business characteristics, including industry and company size, rather than individual consumers.

For a company like Nike, this type of segmentation is particularly relevant when it comes to targeting B2B (business-to-business) customers, such as retailers, sports teams, educational institutions, and corporate partners.

Nike tailors its approach to different firms based on factors like their size, industry and company size. 

Let’s see how they do it:

Industry

Nike works with professional sports teams, leagues, and educational institutions, offering custom uniforms, gear, and sponsorship deals. For example, Nike supplies uniforms for major professional teams like FC Barcelona or NFL teams.

For college teams, Nike customizes products to match the team’s branding and performance needs. They also partner with organizations like the Olympic Committee or Nike-sponsored athletes to provide them with training apparel and footwear designed for peak performance.

Company Size

For smaller businesses, such as local athletic stores or small-scale fitness clubs, Nike may offer more standardized product lines, marketing support, and less expensive options. 

They might also offer these businesses access to Nike’s Nike Proline or smaller quantities of inventory. 

In these cases, Nike's engagement focuses on fostering long-term relationships and growth, supporting their business with localized strategies.

Technographic: Devices, Tools

Technographic segmentation separates users based on their technology usage, like the devices and software they prefer. 

Nike uses technographic segmentation to cater to a variety of users, from tech-savvy fitness enthusiasts to those who prefer simpler, non-digital workout experiences.

For example, digital-first users can enjoy Nike+ Membership, which unlocks exclusive content, early access to products, and personalized recommendations. 

This appeals to users who actively engage with Nike’s digital offerings, including the app’s product recommendations, customized workout plans, and other benefits.

Nike targets fitness-first and low-tech fitness users by offering basic athletic gear without the heavy emphasis on app integrations. However, the company still encourages them to try out the basic features of its apps for motivation, like tracking runs or following pre-built workout plans.

What should be your next step?

Now that we’ve covered different segmentation types and strategies, it’s time to discuss what your next step should be. As I mentioned before, you can have all the data you want. But it won’t mean anything unless you decide to act on it.

This is where you will develop a segmentation plan. 

For example, if you're targeting different age groups, you might adjust your tone, visuals, and value propositions. Young consumers might respond better to trendy, social media-driven campaigns, while older demographics may appreciate more traditional advertising channels.

Which materials can be used for segmentation?

We talked about what you need to do after you gather data.

But how are you going to collect data anyway? In this section, we’ll go over some of the most common and effective methods of collecting user data to use for segmentation.

Let’s roll!

Guides

Guides help ensure that your data collection process is thorough, reliable, and aligned with the goals of segmentation.

Here’s how you can effectively use user guides👇🏻

First things first, if your product has multiple features or modules, you should create user guides for each major feature. Each user guide then should be tied to users who primarily use those features.

After you define your segments, the next step is to analyze how your guides affect user engagement.

Evaluate how users are engaging with the guides — are they reading through all the steps, or do they drop off at certain points?

This step is crucial because you need to collaborate with your customer support team to get an overview of your efficiency. Look at guides in combination with support ticket data.

If users frequently consult certain sections of the guide related to troubleshooting, it can reveal where users typically struggle. This can also help you segment users by their level of expertise (beginners, intermediate, advanced).

Welcome Surveys

Since I’ve been using storytelling and book metaphors throughout this article, it is only natural that I use another one: You should judge a book by its cover.

This is especially true for welcome surveys. Why? Because they provide an early opportunity to capture critical information about your new users. 

This is also when users start forming opinions about your product. And first impressions can make or break a user’s journey. 

In other words, a poorly designed welcome survey will give you incomplete insights into your users' preferences, behaviors, and needs. I hope you’re asking yourself, “How can I prevent this?”

Luckily, you’re reading this article.

Let’s take a look at Wrike’s welcome survey above. 

For context, Wrike is a cloud-based work management and project management software that helps teams and organizations collaborate, track progress, and manage tasks and projects.

This welcome survey is great at capturing relevant information because the questions target the user's potential use, specifically focusing on company size and collaboration needs. 

This information is then used to segment users based on their specific use cases and requirements. From onboarding materials to recommending relevant features, Wrike will adjust the entire user journey with this simple survey.

Your welcome survey should also include relevant questions that target your user’s primary use cases based on your segmentation criteria (demographics, behavior, psychographics, and so on).

NPS Survey and Feedback Forms

As we discussed above, qualitative and quantitative data should go hand in hand to get the most accurate picture of your user segmentation system. Net Promoter Score (NPS) survey and feedback forms are the way to do this.

If you’re not familiar with NPS, it is essentially a metric that helps you gauge customer satisfaction and loyalty by asking a simple question:

"On a scale from 0 to 10, how likely are you to recommend our product/service to a friend or colleague?"

Users who respond with a score of 9-10 are considered Promoters (loyal and satisfied customers). Those who score 7-8 are Passives (satisfied but unenthusiastic customers) and those who score 0-6 are Detractors (unsatisfied customers). 

Feedback forms, on the other hand, are more detailed surveys that allow customers to share their opinions, concerns, suggestions, and specific feedback about their experience with your product or service.

These forms help you gather detailed qualitative insights, which you can later use to create deeper user segments. 

For example, if your survey data tells you that a segment of first-time users reports difficulties in onboarding or using the product, this group can be targeted with tailored onboarding experiences or help resources.

In-app messaging

In-app messaging is very powerful for real-time, contextual communication with users while they are actively engaged with your app.

Since in-app messaging is delivered directly within the app experience, it allows you to engage users at the right moment and tailor messaging based on their interactions. 

This method is most effective when paired with behavioral segmentation because these messages can track and respond to specific user behaviors within the app, such as browsing history, clicks, in-app purchases, and more.

Imagine that your app segments users based on how often and when users interact with the app. 

Therefore, when you see a user consistently opening the app in the morning but rarely in the evening, you might segment them as a morning user and deliver content specifically designed for them at those times.

This will help you create personalized onboarding and campaign messages based on users’ usage frequency or timing patterns, which will drive user engagement.

💡Speaking of personalized campaign messages… Did you know that you can leverage UserGuiding’s targeting features to display these personalized messages to each relevant segment? See example below:

📯Test UserGuiding on your own📯

Checklists

Checklists are the bread and butter for user onboarding. They help you guide users through the initial stages of their experience with your app or product. 

They point to specific tasks or actions that are essential for users to complete in an engaging way. Users see the value of your product more quickly because they play around with the features and try how certain actions are accomplished on their own.

And you get to collect the precious data as they interact (or fail to interact) with your product. This data makes it easier to identify user needs and readiness, which can be used to segment users into different groups.

Let’s take a look at the examples below from KeyHole and Flourish:

What do you notice? (Apart from the fact that they’re both created by using UserGuiding, it’s an amazing feat, I must say.)

I hope you see what I see: KeyHole’s checklist is designed for more advanced users who already have experience with the essentials. They are ready to dive deeper into analysis and social media monitoring.

Flourish, on the other hand, starts with smaller steps and uses the checklist as a gamified setup stage where the user can complete the required actions to get their account up and running.

Thanks to user segmentation based on motivation, these checklists speak for different user intents and objectives. 

How to Implement User Segmentation?

Define your segmentation goals

Trying to take action without knowing your segmentation goals is like trying to find your way in a dark cave. Sooner or later you will encounter something disturbing. Let’s not do that.

Why are you segmenting?

First things first, you must know the reason behind why you need to segment your users. Is it to improve marketing campaigns, personalize user experiences, or optimize product features?

Don’t answer this question based on a vague idea or feeling. Look at your past user data, demo notes, closed lost deal insights, and so on… 

As long as you can back up your initial feeling with relevant information, you’ll find it easier to segment users into meaningful categories.

What specific outcomes do you want to achieve? Increased conversion rates, higher customer satisfaction, or reduced churn?

The end of the tunnel… A soft light flickers across your face… Yes, you made it. And it’s not only because you knew your goals but you also had determined what you wanted to achieve with segmentation.

Granted, your desired outcomes can—and probably will—change along the way, but it is better to have a signpost to refer back to. 

Most likely, this signpost will be related to your KPIs, such as conversion rates and churn. So make sure that you can set SMART goals around them.

Collect real-user data

Collecting data is your best friend when it comes to user segmentation. You can do that through analytics tools, surveys, or user interviews to track engagement. 

Make sure that you’re also tracking user actions, preferences, and attributes. Otherwise, your segmentation might give conflicting results.

Define user groups based on data

Think of grouping as a step before actually segmenting your users. “Why should I add more steps to my already long to-do list?” You may ask.

Well, to be able to turn users into actionable data, you need to group them based on common age groups, motivations, as well as different product use cases. 

Grouping shows you the patterns, segmentation helps you take action based on those patterns.

Analyze the groups and create user segments

When you start analyzing the groups, you will have a chance to get meaningful insights into users.

Then according to your goals, you should bring different data sets together to create a cluster. This will be the base of your segmentation.

Analyzing user behavior by segments can reveal opportunities for growth, such as identifying power users and those likely to churn.

Segmentation gives you a competitive advantage to address potential problems or increase brand loyalty.

Implement segmentation strategies

In this section, I’m bringing together what we’ve discussed so far about segmentation strategies in a nice, pretty package so it’s easier for you to remember:

Developing user personas

Remember Sarah, a 30-year-old marketing manager, not very tech savvy, who just signed up for a paid plan of your product? That is a user persona.

So I’m not going to repeat myself here, you can read that section again. But allow me to reiterate this: Creating user personas is crucial for defining the main user groups and their characteristics.

Kim Zalazar from Nielsen Norman Group also has a good point: 

“Personas are a vehicle for storing and communicating information about people in a way that no other artifact really can. They do this by humanizing complex data which makes it much easier to consume and remember.” 

Tailoring marketing messages and offers

Marketing campaigns rely heavily on user data, and by extension, user segments. 

You can develop highly specific and targeted marketing strategies that resonate with specific segments. For example, you can offer segmented discounts to your existing users to drive higher engagement and conversion rates.

We’ve recently covered this in our newsletter, On Board⛵

New trial users can get a 30% discount on annual plans to encourage immediate upgrades while long-term freemium users are offered a 25% discount on premium features to incentivize paid conversions.

For more upsell opportunities, you can provide current paying customers with a 20% discount on higher-tier plans.

However, you shouldn’t offer discounts to each and every user with the hopes that it’ll make them stay.

Baird Hall’s CHURN.FM episode goes into detail about this: 

“Segmentation when it comes to retention is really important, making sure that you're not giving a 20% offer to all canceling customers.” 

“What's really great is segmenting your cancellation flows or your reactivation campaigns based on how customers have used the product. Were they ever activated at one point? If they weren’t, then we need more aggressive offers.” 

Hall emphasizes the importance of creating a “habit-building product” that uses segmentation to build different cancellation flows to start driving impact.

Make sure to listen to the rest of the episode to gain insight into retention and marketing strategies!

Creating personalized product experiences

Remember Wrike’s welcome survey screen? Yes, that is also an example of how you can tailor personalized onboarding experiences.

By segmenting users based on company and team size, Wrike shows relevant onboarding materials based on the user’s answers.

This improves their time-to-value because the features highlighted in their onboarding tour will be streamlined to emphasize in a way that drives value for users.

The faster this user can understand the key benefits of your product and experience those benefits, the shorter the time-to-value will be.

Monitor and measure impact on segments

When apps, products, and even people can go “viral” in a span of a few hours, it would be a mistake to assume that user segments will stay the same.

How can they not change when user behavior evolves rapidly? 

That is why you should always monitor potential changes to revise your segments. If the impact of your segmentation strategies on key metrics drops drastically, it might be time to go back to the drawing board. 

Wow, what a journey we’ve been on together! If you’ve made it this far, I salute your dedication to user segmentation. 🫡

Take a look at this recap section here to make sure we’re still on the same page:

• First, identify the purpose of segmentation and back your goals with data from past user data and demo notes.
• Then gather data through analytics tools, surveys, and user interviews. Make sure to track user actions, preferences, and attributes to avoid conflicting results.
• Create representative personas for your main user groups, which makes the data easy to consume and understand.
• Segment users to design targeted campaigns, such as personalized discounts for different user groups. Be cautious about overusing discounts for retention.
• Use segmentation to personalize onboarding experiences, and continuously track changes in user behavior and segment performance to refine strategies.

Ready to dive back in? 3…2…1… Go!

Why segment users with UserGuiding?

With UserGuiding, you can create triggers for different user behaviors. For example, after a user completes a specific action or reaches a milestone. 

This helps you automatically adjust the onboarding flow or send personalized messages. 

UserGuiding’s segmentation feature also comes with data-driven insights. 

You can gather and analyze data on how users interact with your product. This is crucial for understanding what resonates with different segments and increasing retention.

User segmentation examples

Nothing teaches you better than real-life examples from successful companies. They get the job done and help you get your job done even better.

Let’s take a look at two user segmentation examples👇🏻

Spotify

I was today years old when I found out Spotify comes from the combination of “Spot” and “Identify”, which is fitting for our purposes: It spots audio content and identifies users who will actually love that content.

This happens thanks to user segmentation. 

According to Business of Apps, Spotify had 551 million unique users in 2023, with over 110 million coming from the United States. A majority of their users were under 35 years old and women made up 56% of the company’s user base.

To add another layer to its segmentation strategy, Spotify also uses behavioral data to make personalized recommendations based on user behavior.

The most famous example? The annual Spotify Wrapped lists.

It’s a very clever and interactive way of showing that they have done their research, path analysis, and monitored every stage in the customer journey. 

If you’re not familiar with the concept, Spotify Wrapped has become an annual tradition where users get a personalized summary of their listening habits over the past year. It highlights the music, artists, genres, and podcasts that the user has listened to the most.

Also, Spotify curates playlists with the user’s most streamed songs or podcasts and recommends new artists that they might enjoy listening to

It just doesn’t end there, though. 

The Wrapped list comes as a shareable template you can post across social media with the hashtag #SpotifyWrapped, which already has 12.9 million posts on TikTok and trends worldwide on X every year.

Spotify Wrapped makes music more than just music. It’s “a conversation starter” as Spotify says, aka free word-of-mouth marketing.

In 2022, Spotify added “listening personalities” to the Wrapped lists, which are basically 16 unique personas attached to their most engaged, power users.

Although these personalities are yet to be added to Spotify’s advertising based on location and interest, it is still a good example of how behavioral segmentation can drive higher engagement and retention rates without sending boring emails or lackluster social media posts.

Bumble

Another example (and not very popular in marketing research in my opinion) is Bumble.

Bumble is a popular dating app that was founded in 2014 by Whitney Wolfe Herd, one of the co-founders of Tinder. It’s often described as a dating app with a twist because it encourages women to take the first step in initiating conversations.

Today, Bumble is more than that. It has since expanded to include other types of connections as well, such as friendships and professional networks.

Here’s what Whitney Wolfe Herd has to say about the app’s evolution:

“Bumble has now grown far beyond a dating app into a networking platform, allowing people of all genders to make empowered connections in all areas of their lives, whether that means you’re seeking a romantic relationship on Bumble Date, making new friendships on Bumble BFF, or growing your professional network on Bumble Bizz.”

What does this mean for user segmentation?

First of all, every user on the platform has the same need: “to make empowered connections.”

So, instead, Bumble segments its users into different categories based on their intentions, mainly across romantic, platonic, and professional contexts. 

This allows the platform to increase user retention by providing value in multiple areas and gives them a chance to upsell their premium features like Bumble Boost and Bumble Premium to encourage deeper engagement.

Check out this example from Bumble Bizz👇🏻

Bumble Bizz is more than just a business directory—it's about networking with a human touch. 

Bumble understands that business relationships are personal as well as professional, so it allows users to approach networking in a way that reflects their personality and values, not just their resume.

Because of that, this UX design and highlighted features will not look the same for Bumble BFF.  

Now, let’s take a closer look at how Bumble BFF adapts its features based on user segment👇🏻

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As you can see, Bumble BFF suggests group activities and group chats as an icebreaker while Bumble Bizz focuses on professional milestones, career advice, or industry connections. 

This personalized experience ensures that users stay engaged across multiple areas of their lives.  

Tools to Help You

Let’s see how you can step up your user segmentation game with third-party tools👇🏻

Analytics Tools

Google Analytics

Google Analytics is one of those analytics tools that lets you segment users based on multiple strategies. 

For example, you can create a segment for users who have viewed a specific page or completed a particular action (behavioral) or by age, gender, or interests if you have enabled demographic reporting. 

Google Analytics 4 introduces a feature called Audience Builder, which enables you to create highly specific audiences for analysis or remarketing purposes. You can think of this feature as Google’s interpretation of user personas.

Pricing

Google Analytics has a free version (GA4) that allows you to collect data, such as visitor numbers, demographics, traffic sources, and website interactions. This option is a great fit for small- and medium-sized businesses.

If you’re running an enterprise, check out Google Analytics 360. This is a premium, subscription-based version that has additional features like enhanced data processing, customization options, and advanced integrations.

Google Analytics 360 has a different pricing structure that is tied to authorized resellers, but Google’s suggested price starts at $150.000/year.

Ratings

G2: 4.5/5⭐

Capterra: 4.7/5⭐

‍TrustRadius: 8.1/10⭐

Mixpanel

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Similar to Google Analytics, Mixpanel also offers multiple segmentation options like demographic and behavioral targeting. You can also create custom events to track any specific actions or events, such as “added to cart” or purchases.

There’s also a segmentation report that you can add filters on based on user properties like location, events, gender, and timeframe. This report will help you create or refine your funnel and see how different segments are performing.

Pricing

Mixpanel has a free tier that you can use for up to 20 million monthly events, which is perfect for any business to hit the ground running and start with analytics essentials.

If you need advanced analytics and unlimited reports or cohorts, Growth tier might be a better fit for you, which starts at $24 per month. If you’re an enterprise, you need to contact Mixpanel to get a quote.

Ratings

G2: 4.6/5⭐

Capterra: 4.5/5⭐

‍TrustRadius: 8.9/10⭐

Heap

Heap is a digital insights platform that focuses on end-to-end customer journeys to improve conversion and retention. Its analytics feature also allows you to segment users based on their behavior.

This is what Heap says: “Heap helps you quickly identify patterns in user behavior so you can segment accordingly and engage them based on their actual experience.” 

You can also integrate Heap with Salesforce to “track high-value users from first touch through adoption.” 

Pricing

With Heap’s free tier, you can access core analytics charts and 6 months of data history. If you are in the process of scaling up your start-up, Growth tier might be more suitable for you. 

This tier comes with all the features in Free, plus unlimited users and reports as well as chart customization and 12 months of data history. You’ll have to contact Heap for pricing details.

Ratings

G2: 4.4/5⭐

‍Capterra: 4.5/5⭐

‍TrustRadius: 8.4/10⭐

Customer Relationship Management (CRM) Tools 

Salesforce

Salesforce is a great tool for managing customer relationships, especially if you’re working in B2B. Why?

Because you can segment your users based on their industry, company size, and revenue. Salesforce also has a special segmentation strategy: customer value.

It allows you to segment users based on their customer lifetime value (CLV) or recency, frequency, and monetary analysis.

Pricing

Salesforce offers different pricing options based on the product you want to purchase. 

If you need to centralize your data or have personalized experiences across every customer touchpoint, you need to add Data Cloud and Personalization to the base solution which starts at $25 per user per month.

Data Cloud starts at $108.000 per organization per year and Personalization starts at $108.000 per organization per year.

Ratings

G2: 4.4/5⭐

Capterra: 4.4/5⭐

‍TrustRadius: 8.6/10⭐

HubSpot

Like other tools in this list, you can use HubSpot for demographic and behavioral segmentation. The good part is that HubSpot allows you to segment users based on their position in the lifecycle stage.

For example, you can segment a user based on whether the contact is a lead, marketing qualified lead (MQL), sales qualified lead (SQL), and existing customers.

You can add another layer to this and use source segmentation, which puts users into different segments based on where the user came from (referral, organic search, or social media). 

Pricing

HubSpot’s pricing structure depends on which product you want to sign up for. Operations Hub Starter tier starts at $15 per month per seat while Service Hub Starter tier starts at $15 per month per seat as well.

Depending on what features your business needs, you can check out their pricing page to get more details.   

Ratings

G2: 4.4/5⭐

Capterra: 4.5/5⭐

‍TrustRadius: 8.4/10⭐

Data Visualization Tools 

Tableau

While Tablau is mainly a data visualization tool, it can still be helpful for user segmentation if you apply behavioral or demographic attributes to data you have.

Before you start segmenting users in Tableau, make sure your data is clean and well-organized. The data you import into Tableau should ideally include user-related attributes, such as: behavioral, demographic, and business data.

In Tableau, segmentation is typically done by using dimensions (categorical data) and measures (quantitative data). Then you will use filters, groups, or sets to segment users. For more complex and customized segmentation, you can use calculated fields.

Pricing

You need to choose a base edition of Tableau for you first and then customize the licenses you’ll need to get an accurate pricing. But the base edition options are Tableau, Tableau Enterprise, and Tableau+.

Ratings

G2: 4.4/5⭐

Capterra: 4.6/5⭐

‍TrustRadius: 8.0/10⭐

Power BI

User segmentation in Power BI involves breaking down your users into distinct groups based on shared characteristics or behaviors, such as behavioral, customer lifecycle, or engagement data.

Power BI also allows you to pull data from multiple sources such as Excel, Salesforce, and Google Analytics. You can then use its grouping and binning features to create your segments. 

To segment users based on more complex rules, you can create calculated columns or measures in Power BI using DAX (Data Analysis Expressions). This allows you to classify users into custom segments dynamically based on their behavior or attributes.

Pricing

Microsoft’s Power BI also has a free tier available for creating interactive reports for visual analytics. Power BI Pro starts at $10 per user per month while Power BI Premium starts at $20 per user per month. 

Power BI Embedded has customer-facing reports, dashboards, and analytics features. You need to contact sales to get a quote.

Ratings

G2: 4.5/5⭐

Capterra: 4.6/5⭐

‍TrustRadius: 8.4/10⭐

Conclusion

There you have it. The keys to make user segmentation your secret weapon. 

Remember that user segmentation starts with discovering the stories of your users and what you hope to achieve at the end of the process. By implementing the strategies we’ve discussed in this article, you won’t be afraid of taking smaller steps to achieve your big goals.

Your journey has just begun. Enjoy!