Segmentation to speed customers along journey

Dec 17

Segmentation to speed customers along journey

Most Apps treat user segmentation as an after-thought. But smart marketers know that personalization is key. After all, consider the effect of an offer so well placed it is seen as a reward, compared to being blasted with generic spam. Personalisation brings extra value to the user so that increased Lifetime Value (LTV) comes naturally.

BUT the problem with personalisation is that its….well….personal. It takes a long time and a lot of money to build the smart recommendation systems that Facebook or Google uses – but the good news is that you don’t need that.

Any step towards greater clarity of your user base is a step in the right direction. As you make more and more distinctions, the right actions becomes more and more obvious. Effective segmentation enhances the entire user experience. And it’s easy to start.

Customer Segmentation

Steps to effective segmentation:

  1. Plan out the “user’s journey”. Identify different stages of the lifecycle and interesting trigger points within this journey
  2. Cluster users into preliminary groups, based on demographics or attributes and build a persona around these attributes
  3. Understand the segment. What is the behaviour of the persona. How many users are in this segment?
  4. Test actions on these persona to try and prompt a certain response, such as moving onto the next stage of the user lifecycle
  5. Was it successful? Measure the outcomes of the actions
  6. Refine personas and actions, to continue to improve the outcome. As more data is collected, the actions will become more effective over time
  7. When you find that a certain persona responds consistently well to a certain action, then that is a good segment focus on. We’ll talk about “split tests” or “A/B Tests” in a later post.

Questions to consider when segmenting

Segmentation by demographics is not enough. There are two ways in increase LTV – enhance engagement or encourage monetisation.

Engagement Segments:

  • How long ago did the user download the app?
  • Are they still an active user?
  • Frequency: How many times is the app opened per week?
  • Duration: How long does the user spend each time?
  • Depth: How many features have the user accessed?

 

Value Segments:

  • Status: Are they free, trial or premium subscribers?
  • Recency: How long since the last purchase?
  • Frequency: What is the purchase history? Users who never bought? Bought Once? 2-5 purchases?
  • Value: Have they visited your stores? Have they clicked on in-app ads? What price range are their purchases?

 

Actions for segments:

  • Encourage users to move onto the next stage of the lifecycle. (Check out the video below for how to encourage new downloaders to register)
  • Win back customers using the most effective method. If a user downgraded from a premium account within the past week, perhaps targeting them for feedback regarding desired features and giving them a 20% off resubscription offer is effective.
  • Discover how different segments move through different lifecycle stages. Typically for Apps, a small proportion of segments make up the majority of subscriptions or purchases. Which lifecycle stages are users getting stuck?
  • Test the optimum time to ask users to subscribe to the premium model, based on their segment. Are better conversion rates achieved when users are asked the first day they use the app or after a week?

 

Tell us the segments that work for you – hit us up in the comments or on Twitter @streethawkapp

 

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