Benefits of user segmentation

user segmentation

I separated my M&Ms into color coded piles as a kid. Shouldn’t we pay our users 1/10 of that attention? I guarantee that you have at least 6 different user segments you should be tailoring your communications towards

 

 

 

 

 

 

 

 

 

 

 

 

 

Not all your users are the same. Aside from the obvious differentiators such as how often they log into your product, what pricing plan they’re on, and what timezone they’re located in, there are a lot of other considerations that should change how you communicate with this non-homogenous group. The job one customer has hired your product for can contrast greatly with how a customer in the same industry, that came in from the same lead source, located in the same city might be using your product. So why would you send these very different users the same tutorial on a feature one is already using daily, invite them to a meetup in a city neither of them lives in, etc.? It is rare that a message will be relevant to every one of your users. Before you push a message out to your entire user base, challenge yourself to group those users into more refined segments. User segmentation benefits not only your customers but also Product Management, Acquisition, and Support teams.

Analyze underlying trends

User segmentation allows Customer Success teams to uncover underlying trends across a large number of customers and users. A starting point for axes to segment users on: when and how you acquired them (useful for cohort analysis), which product(s) they purchased, what kind of paid plan they’re on, which product features they’ve used and when, how engaged they are with Sales/ Support/ Customer Success. All this information will be crucial when you’re trying to define what the commonalities are among your most success customers. Determining what key metrics lead to engaged, happy (and hopefully high paying) customers is arguably the most important project the Customer Success team can take on. The impact of distilling these key actions is widespread- starting with optimizing your marketing sites, filtering down through how the Sales team pitches your products, and influencing how you onboard users and share best practices. You can also expand your research to look for possible correlations between users who gave you a low NPS score and the pricing plan they’re on, if certain salespeople see higher churn rates, and if users are more likely to downgrade their plan if they rarely log in.

Scale your Customer Success team’s impact

Diving your user base through user segmentation will also allow the Customer Success team to scale their efforts by automating some of their communication with customers- without needing to sacrifice authenticity. Once you’ve identified the key actions that increase the likelihood that a user will be successful with your product, you can automate parts of the signup and onboarding process to drive them towards taking those actions. It also lets the Customer Success team carve out phases of the customer journey when certain priorities reign supreme. Onboarding is one of these sacred periods when you want to avoid sending users messages that are not completely vital and could potentially distract from their long term success. Feedback the Customer Success team passes on to the Product team can now include a more defined scale of impact and context and rely less on anecdotal evidence. What type of customers are asking for a feature, and what current or future revenue opportunity do they present for your company? Does the data suggest that our ideal customer profile different than what we originally thought? Finally, by focusing on data like the concrete actions a user has taken versus pre-defined ‘markets’ or ‘customers’, you can more effectively execute marketing, build better products and launch more powerful promotions (source).

user segmentation

Final tips

  • Don’t be creepy. It’s possible to make your users uncomfortable by recklessly exposing how much data you’re collecting about them. Having access to your customer’s information is a privilege, not a right. Don’t abuse it and your users will be less apprehensive to give it to you in the future.
  • Consider mapping users up to “companies” or some kind of parent account when appropriate. This will help you avoid spamming a whole company with a message that is really only relevant to certain types of users within the company. For instance, if you’re asking Admin users to enable SPF and DKIM, you should set up your messages to no longer send to future admins once these settings have been enabled.
  • User segmentation is not a fix for thoughtless copy/ content. Segmentation doesn’t automatically help you increase the relevance of your message for those users- instead, it helps you decrease irrelevance for your other customers as well as provide a chance to send highly relevant messages to the people receiving your message.
  • Although segmenting is really useful, you’re unlikely to find much return on establishing segments if each group has <5 customers. In that instance, unless you have 10+ segments, you are probably just as well off sending 1–1 personal outreaches.

 

An underlying assumption behind this post is that you have already collected this data about your users. If you haven’t, start doing so ASAP. However, don’t make gathering this information a burden on a new user signing up for your product. Few things are as off-putting as being asked for your hopes and dreams, mother’s maiden name, and eye color when you don’t know how a company plans to use this data and how it will benefit you, the user. You can gradually ask your users for this information and/or automatically detect this information with products like Intercom that can determine a user’s location based on their IP address, the last time they were on your site, etc.

Now start sorting those M&Ms…