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User Segmentation

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What is user segmentation?

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User segmentation definition

User segmentation is the process of separating users into smaller groups based on similar characteristics. User segmentation types and examples include age, location, device used, behavior (daily users, lapsed users, etc), value to the business, and more.

The idea behind user segmentation is that not all users are the same. When you acknowledge this, it can make marketing and selling your product so much easier. Of course, it will depend on the product as to how you segment your audience. 

Learning information from each user segment allows a business to personalize user experience or product features. For example, age is often the easiest way to segment your users, separating boomers, millennials, and generation Z. It’s well known that Gen Z are up on technology so trending on TikTok would reach new customers.

How to perform user segmentation for your digital product

Differentiate between customer and user

These are not always one and the same. Think about children’s toys. Children use them but it’s the parents that buy them. So while you’re targeting the child to make your product as enticing to them, ultimately, the parent will be purchasing. The same can be said for certain video games and within a b2b environment, too.

Track user engagement

This metric can be anything from website traffic to app downloads; it’s unique for every product and company. Analyze the data you have to figure out who is using your product and find out their motivations behind it. 

Choose segments based on aims

There’s no point in selecting user segments that don’t relate to where your business is headed. Are you focused on engagement or page views online or are you looking for repeat customers (whether it’s a subscription model or not)? Always go back to your goals to see which segments will help you to target the right users.

Implement this information

Think about each segment and how you can target them best, whether that’s through marketing or product development. Identify action steps to be made and complete them!

4 user segmentation types and examples

There are thousands of ways to segment your users, but the approach you choose usually comes down to a few areas. The four examples below are the most popular and you can combine various attributes to create customer personas.

  • Demographics - These are personal traits such as gender, age/generation, location, income, occupation, and education.

  • Geographical - A business can target as broadly or narrowly here: postcodes, cities, or countries.

  • Psychographic - Rather than facts like demographics, this looks into a person’s interests, feelings, beliefs, and social class.

  • Behavioral - This segment refers to actions concerning your product, including usage frequency, time spent using the product, casual user versus core use, and paid vs free user (conversion rate).

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General FAQ

What is the definition of user segmentation?
User segmentation is a way of categorizing your users/customers and grouping those with similar characteristics together to offer personalized service.
What are some example types of user segmentation?
Segmentation can cover demographics (age, income), geography, behavior (product usage, time spent), and psychographic (beliefs and interests).

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