What is user segmentation?

Glossary What is user segmentation?


What is segmentation?

Segmentation, often referred to as audience segmentation or user segmentation, is a strategy that identifies specific subgroups within a wider marketing audience based on shared characteristics. Segmentation in advertising facilitates more personalized marketing campaigns that lead to improved user engagement.

Segmentation definition

What is micro-segmentation?

Micro-segmentation is a more granular approach that divides users into highly specific subgroups. This advanced target audience segmentation strategy groups users based on a combination of factors such as behavioral data, transaction history, interactions with digital content, and more. Segmenting even further, marketers can target a segment of one, also known as individual marketing or hyper-personalized marketing. A segment of one approaches each individual as a unique segment with distinct needs, preferences, and behaviors.

In turn, businesses can understand better and meet the unique needs and preferences of very specific groups, thereby improving engagement, customer satisfaction, and potentially, the overall effectiveness of marketing efforts.


Why do companies use segmentation?

A segmentation strategy requires that a company customizes its offerings and communications to align with its end users. Digging even deeper, audience segmentation enhances your inbound marketing efforts with the following:

  1. Relevant marketing: Tailored strategies resonate better with specific types of audiences.
  2. Resource optimization and profitability: Focusing on target audience segments that are more likely to respond to their offerings ensures that marketing spend yields better returns.
  3. Improved product positioning: Breaking down the varying needs and preferences of different customer groups aids in product development and enhancement.
  4. Competitive advantage: Meeting customer needs more precisely gives an edge compared to competitors who adopt a one-size-fits-all approach.
  5. Increased retention: A stronger connection with customers can foster higher satisfaction levels and ultimately, better customer retention.
  6. Market expansion: Identifying and understanding different audience characteristics can also help companies discover new market opportunities or areas for expansion.
  7. Risk management: In certain app verticals, such as fintech, segmentation might also assist in compliance with regulatory requirements or managing risks associated with different market segments.

Through audience-based marketing, companies can cultivate a deeper understanding of their market, optimize their marketing efforts, and drive better business outcomes.


Different types of segmentation

There are different ways to slice and dice the market, and each type of customer segmentation has its own benefits.

What is psychographic segmentation?

Psychographic segmentation divides a market based on variables such as interests, lifestyle, or personality characteristics. It delves into how people live, their interests, and how they view the world around them.

What type of marketing is conducted by using psychographic segmentation?

Marketing campaigns employing psychographic segmentation are often tailored to appeal to the values, desires, or fears of a target audience. This can include lifestyle-focused campaigns, social cause marketing, or messaging that appeals to a specific subculture or identity.

What is behavioral segmentation?

Behavioral segmentation is the categorization of individuals based on their behavior, usage, decision-making, or knowledge about a product or service. This can include purchasing behavior, usage rate, or brand loyalty.

What are four types of behavioral segmentation?

Four types of behavioral segmentation include:

  1. Usage patterns: Regularity and length of sessions.
  2. In-app behavior: The actions users take within the app, such as features utilized, pages visited, and buttons clicked.
  3. Purchase behavior: Frequency of in-app purchases (IAPs), value of IAPs, or types of IAPs.
  4. Event-based segmentation: Segmenting users based on specific events, such as app install, updates, or achieving particular milestones within the app.

What is demographic segmentation?

Demographic segmentation is based on audience characteristics such as age, gender, income, education, occupation, family size, religion, race, and nationality. Companies that use demographic segmentation, such as Meta properties Facebook and Instagram, allow marketers to leverage demographic targeting on their advertising platforms.

What is ABCDX segmentation?

The ABCDX segmentation framework segments users who have made at least one purchase, based on the perceived value they derive from your app. The segmentation is done in five distinct categories:

A: Users who need your app to address their pain points. They exhibit high conversion rates and continually use the app due to its significant perceived value.

B: Users who recognize the need for your app to alleviate their issues, but have reservations. Although willing to spend, they take longer to purchase.

C: Users who find partial relief from their pain points through your app, but don't see much value in it. They spend a minimal amount and have significant objections.

D: Users who have many objections and often challenge the value proposition of your app. They are the least likely to make a purchase.

X: Users with specific needs your app doesn't cater to without personalized features and tuning. They require a level of customization that is not currently offered.


Adjust and audience segmentation analysis

Adjust's Audience Builder is a robust audience segmentation tool designed to enhance your inbound marketing strategies through precise data segmentation and audience modeling. Mobile marketers can set custom criteria and sit back while Adjust does the work. Users are grouped according to your specified criteria. The dynamic audience feature even updates every audience in real-time, saving you significant time and effort!

Learn more about engaging the right users at the right time with Audience Builder, or request a demo.

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