End user segmentation is a powerful tactic. Effectively segmenting a user base enables SaaS companies to make interactions with their customers more personalized and more relevant. When enterprises can logically group user types, they can better deliver the timely and relevant experiences that users crave.
User segmentation is key to customer success. When you can accurately predict what a particular type of user will value, you can deliver exactly what they want. This drives both adoption and retention.
Segmenting your users is also powerful from a product perspective. When users are understood in clusters of similar behaviors, product teams can see the gaps and pain points that hinder adoption and usage within a particular cohort. These insights can help steer the course of product/feature development in a data-driven fashion, which is less risky for the business.
At Simpo, we have many first-hand examples of the power of end user segmentation. Take monday.com. By effectively segmenting their user community with Simpo, monday.com could preemptively provide in-app guidance in a targeted fashion, drastically reducing the amount of support tickets being generated.
Read on to get the whole story.
All product companies have users. A SaaS company that is succeeding will have an ever-growing user community. Keeping all users engaged and committed is key to SaaS success.
Once upon a time, before sophisticated SaaS, organizations found it very hard to identify different groups and subsets within their overall user groups. In attempting to nurture engagement, the tactics were crude. The norm was to blast an entire user group with one information stream (the junk mail model). At most, segmentation was crude; based on the most basic demographics.
This was especially true when it came to onboarding, product guidance, and support. Everything operated via catch-all documentation: One big feed of information, that goes to everyone.
End user segmentation is the process of making this approach more sophisticated by personalizing information and interactions to the individual user.
Because SaaS products are online, each touch is captured and logged for better analysis and as a result, better service and support. Using this wealth of data, one large database of users can be segmented into different groups using various customer segmentation models. These groups are gathered together based on similar attributes or traits. Traits can range from geographic location, to product version, to the browser or OS used, to job title or any other attribute an organization might choose.
When it comes to in-app experiences, these segments can then be targeted with visuals, panels and prompts that are tailored to that specific segment, rather than the user community at large.
User segmentation uncovers behaviors and reveals how these behaviors vary between segments.
Equipped with these rich and actionable insights, a SaaS product and customer success team can create personalized, targeted experiences for each segment. While no two users will be identical, certain traits reliably translate to certain behaviors; by responding to this reality, product led companies can better serve their customers.
When customers get what they want, they are more likely to adopt a product, and keep using a product. It’s as simple as that. This is especially true in the world of in-app experiences: users need help that is timely and incisive, but never pushy or annoying.
At the highest level, user segmentation brings a single understanding to all functions of the business. Segmentation can reveal what types of users and accounts are adopting and within what cohorts, and their probability to retain for the long-term or upgrade.
This is invaluable for Sales, CS and Product teams. And working from the same information means everyone can sing from the same song-sheet. Communication and collaboration are enhanced. Once customers' needs and wants are fully identified, departments can stop wrestling over persona definitions. They can simply get to work executing a structured initiative to address their customers' requirements and deliver the expected product benefits.
Moreover, this high-quality information helps direct the overall product and feature roadmap. And a feedback loop emerges: Happy users, who receive timely and relevant interactions from the product, will stick around. Then, they will give valuable feedback for future enhancements and benefits. This feeds in to a better product experience for them, and all users in their segment. All boats rise.
Customer segmentation strategies vary from one SaaS company to another, and from one product to another. However, these are some of the most common and proven forms of segmentation:
Behavioral. Segmentation by behavioral traits is probably the most common among customer segmentation models. For one, it needs little data to be effective. Secondly, behavioral attributes such as browsing habits, navigation patterns, usage data, and so on are readily available to many companies. For SaaS, these insights help to distinguish which users are enthusiastically engaging with a product, which ones are struggling, and so on.
Demographic. The demographic segmentation process involves grouping customers based on their demographic characteristics, also referred to as identifiable non-character traits: gender, age, profession, academic level, income level, job function,, title, and so on. This is a widely-used customer segmentation strategy as it's the most straightforward way of creating user groups. Demographic segmentation generally answers the who: who among a company's customers will likely use a certain product based on their demographic attributes.
Firmographic. Firmographic segmentation is a direct parallel of demographic segmentation, used primarily by B2B enterprises to analyze and segment business organizations. Premodimant firmographic traits include industry types, number of employees, company age, location, value, and revenue growth among others.
Psychographic. If the demographic segmentation process fleshes out the who, psychographic segmentation focuses on the why. This method looks at customers’ personalities and interests, and creates groups based on customers’ values, life goals, lifestyles, and other personality traits. While identifying psychographic groups is more research-intensive than demographic segmentation, it can produce subtler results and generate highly actionable insights and is especially useful for B2C providers.
Geographic. The location of users matters in business, especially when a business caters to customers found within a set radius of a specific location. Geographic user segments can be defined in various ways, such as country, region, city, state, etc. For SaaS, geographic segmentation helps to determine services, features, and content that are relevant to a users’ area and timezone, for example GDPR capabilities are important for all orgs based in Europe or with end-customers in that region.
Technographic. With technographic segmentation, businesses group their customers based on their technology stack. This can range from their operating system, to their standard browser, to their current cloud services, and any other relevant filter. As more consumers become technologically aware and reliant, technographic segmentation is becoming increasingly popular among SaaS providers.
At Simpo, we provide our users with a Segment capability that enables users to develop groups of end-users, and provide those users with the most compatible and relevant information, content and capabilities. Simpo users can segment their users based on their personas, and bring those personas the in-app guidance that is right for them.
Simpo users have access to two types of Segments: Global Segments and Local Segments. The Global Segment enables users to create and define a Segment, and then apply that same Segment to several Simpo plays or content sequences. The Local Segment feature allows Simpo users to create and define a specific Segment for a specific Simpo experience, and only that experience.
User segmentation helps Simpo users identify probable “Aha!” moments; the moments that will make a user realize the value of the SaaS product to their working life. “Aha!” moments can range from features activated early in the user's journey, to activities that correlate with product adoption. Identifying these is crucial to driving adoption and retention.
At Simpo, our users all make effective use of end user segmentation. Here are four tactical principles we consistently see working:
Combine CRM and Product Data
An enterprise's CRM software will provide much of the data required for segmentation. However, this data should always be combined with product analytics. Segmentation works best when it is based on an individual’s role, company, and so on – and information on product usage. Capturing and evaluating product usage per segment is crucial to understanding how different groups use the product differently.
Create Segments Based on Business Objectives
This is crucial if a company is exploring a new territory, vertical or account size. To see what uptake looks like, product managers and developers need to determine how this new cohort is behaving. What are they looking for? What do they want? With this knowledge, you can tailor their in-app guidance to the prevailing business objectives.
Compare and Contrast Segments
Don’t treat segments in isolation. Comparing and contrasting segments helps enterprises determine effective ways to improve customer success and product KPIs. If one segment is drastically outperforming another, ask why. Perhaps the learnings from one segment can be used to illuminate how you approach another segment. If in one segment you have improved engagement for stagnant users, can the approach be ported to another segment?
User segmentation thrives on experimentation and measurement. Even if things are going well, enterprises should always keep testing approaches to see what works, and to discover which levers they can pull to produce a change in a segment’s behavior, experience, or sentiment. From there, companies can examine whether these changes are contributing to desired business outcomes. Always keep testing, tweaking, and refining.
“Quick Search is super easy to use and its UI is amazing. Segments help us optimize our content all the time, which is something I didn’t see in other tools.” Serfaty, Product Knowledge Manager at monday.com
At Simpo, we have seen our customers reap the benefits of end user segmentation firsthand. Consider monday.com.
Monday.com is a SaaS project management solutions provider that caters to over 100,000 project teams at the world's leading brands, including Coca-Cola, Adobe, BBC, and Universal Studios.
Support tickets from users were piling up. The monday.com team knew that the key was to help users help themselves. If they could predict the information and aid that would be most useful to each user, they could provide it preemptively, without the need for a support ticket.
Personalizing this user outreach required segmentation. The monday.com team used Simpo Tools to split their end users into different groups. They were then able to target these different user group segments with specific tools – announcements, walkthroughs, NPS – tailored to that segment’s wants and needs.
Today, based on the user's actions, permissions, and tasks, the monday.com solution automatically finds and targets users with knowledge content that is relevant and highly personalized to the user. The burden of searching for significant and useful content and other knowledge material is off the user's shoulders.The monday.com team also used segments to help with an A/B test. While testing out different pricing models, they needed to ensure that specific users in each pricing version would only see certain articles about their version. Simpo segments helped them execute this, and the A/B test had a significant impact on bottom line.
After implementing user segmentation with Simpo, many tens of thousands of monday.com users can now quickly find the answers they need. By fully leveraging the platform's self-service capability, 83% of users no longer have to resort to submitting support tickets.
If you’d like to learn more, sign up here for this free on-demand webcast featuring monday.com.
The monday.com example really proves the power of end user segmentation. When SaaS companies segment effectively, they empower themselves to make their user interactions more personalized and more relevant. This is crucial with in-app guidance, and every other area of product design and customer success.
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