Don’t Let the Segmentation Scaries Get You
It's normal to feel overwhelmed by segmentation, or to oversimplify it using only demographics. This guide helps you navigate the subject with ease.
I remember the first time a colleague came to me and asked me what is now the dreaded question, "Who are our users?"
Because I couldn't answer this question clearly or with confidence, I had issues with recruitment, prioritizing insights, organizing insights, understanding which customers to focus on, and creating critical deliverables such as personas and journey maps.
I was frustrated with being a user researcher and not feeling like I could answer such a fundamental question. I decided this was the time to rip the band-aid. It was time to dive into segmentation.
Jump to…
When segmentation feels scary
As soon as I decided to begin segmenting our customers, I fell into utter paralysis.
How was I supposed to start? Which customers should I start with? How would I know what the right choice was? What if I only found useless information that we already knew?
I cycled through these questions and spent hours on Google, trying to understand where to start and what I had signed myself up for. Then, finally, I got to the point where I wasn't sure what segmentation even was.
Just the word made me nervous, and even thinking about the project sent me into a spiral. I spent two months procrastinating because I was terrified of failing or making the wrong choice. After two months and having nothing to report to stakeholders yet again, I shook myself out of my doubtful mindset.
Learning is all about moving forward and iteration, which was exactly what I was trying to do with segmentation. So, instead of making myself feel like I was an emergency room doctor trying to find a cure to incurable diseases on a timeline, I remembered that, whatever I did, wherever I started, I was getting information that would move the organization forward.
What is segmentation, and why should we care?
Segmentation can take on many different forms, with different definitions depending on who you ask. So, the way I define segmentation when it comes to product/UX:
Segmentation is taking a large group of people and separating that group into smaller subgroups (or segments) based on shared characteristics between the individuals in the group. These shared characteristics can be based on many variables, but should not only be based on demographic information.
The reason I point out demographic information is because of this very meme by Desiree White:
When segmenting our users, we must be thoughtful and intentional about the shared characteristics we assign.
But why does this even matter? What if we know our users? What if we hate personas and aren't going to create any?
Segmentation goes beyond knowing customers or creating deliverables like personas.
How segmentation helps you and your colleagues
✔ Do a better job of recruiting
Understanding your users can help you ensure you are recruiting the most relevant people for your study.
✔ Prioritize research projects
The most impactful research projects will likely be with revenue-generating participants. Knowing customers will help ensure you do the most impactful research at your organization.
✔ Know which insights matter most
Whenever we get a long list of insights from different customers, it can be impossible to know which to prioritize if we don't know who our customers are and the impact our insights will have on them. Knowing these segments helps you with knowing which insights to work on first.
✔ Identify unmet needs
Segmenting your audience and what you already know about them can help you determine your knowledge gaps. These gaps are critical in creating an even better customer experience and ensuring the product or service meets their needs.
✔ Improve the product
Segmentation gives you the tools to understand who uses your product and can also help you know how they interact with it. One of the most fascinating things I learned was how different segments had hacked a product to make it work for them. This information lets you improve your product/service to align with your users' mental models.
✔ Inspire innovation
Seeing your segments can help you understand who you might be missing. This exercise can lead to significant innovation in your product to meet a new segment's needs and alleviate their pain points.
✔ Know your customers
Finally, answer those questions about who your customers are!
There are many more reasons for segmentation than building personas or deliverables that can help you and other departments make big decisions.
So how do we segment?
Ways to segment your audience
Unfortunately, there isn't a one-size-fits-all for segmentation; instead, there are many ways you can segment your audience. And this is where this process can get complicated.
To make it a bit easier, there are themes in segmentation tactics:
- Primary demographics
- Behaviors/usage (what they are doing)
- Interaction (how they are doing something)
- Feelings (why they are doing something)
- Environmental context (who they are doing something with)
- Timing (when they are doing something)
This certainly isn't an exhaustive list of themes, but it will give you a good starting point for breaking your audience into respective segments. Next, let's dive deeper into each theme to understand it better.
✔ Primary demographics
A lot of researchers are familiar with the core demographics of customers, such as:
- Age
- Gender
- Education
- Income
- Employment status
- Occupation/role (and years of experience)
- Race
- Location
- Marital status
- Family
- Homeownership
Understanding primary demographics like this can be interesting in certain circumstances but shouldn't be the basis of segmentation because they don't tell you much about the customer.
Knowing that your product skews toward females aged 25-35 can be great. However, getting deeper into different characteristics can tell you much more about what your audience is thinking, needing, and their struggles—which leads to real improvement and innovation.
✔ Behaviors/usage
Going deeper than these primary demographics means looking at the what. Understanding what people are doing can allow you to segment deeper than surface information. If you can find patterns in behaviors and usage, it can indicate to you potential areas for improvement or creation, depending on if you serve that usage.
Behaviors to look for
- What are people's habits?
- What hobbies do people have?
- What do people need to do daily?
- What routines do people have?
- What are people's goals? What are they trying to achieve?
Usage to look for
- How many times have people used a product/feature? Or purchased something?
- How many times have people reached out to support?
- How long has someone been a customer? How long have they used a product/feature?
- How often are people signing into a product?
- Perceived usability or satisfaction
✔ Interaction
Learning how people interact with a product/service brings us one step deeper into understanding our customers and making meaningful segments.
When looking at interaction, we can pull from data analytics to understand trends in how people are using our products in…
- Where they enter the product
- General flows (happy path versus errors)
- Where people drop off
- Click-through rates
✔ Feelings
The feelings context helps us understand why people might be doing specific tasks or using certain products. It helps us answer the more profound question of "why."
When looking at feeling-based segmentation, you can think about:
- Motivations
- Goals
- Values
- Personality traits
- Lifestyle
✔ Environmental
The environmental context looks at where they are when they are doing something and who else might be involved in their tasks. This segmentation theme can be significant if you have an ecosystem of roles all working together that you need to unpack into separate segments.
For environment, you can separate by…
- Who else is involved in tasks
- In-person versus online shopping
- In-office versus remote
- At home versus out and about
- Multi-tasking versus single-tasking
- Desktop versus mobile
✔ Timing
Timing can be highly relevant to your audience, especially if you have a specific selling season. Looking into when people are making certain choices or using your product can be an excellent segmentation technique.
For timing, you can look into the following…
- Seasons
- Holidays
- Time of day
- Day of the week (week versus weekend)
- Regular routines on a pre-scheduled basis (ex: dentist/doctors appointments)
- Big life events (ex: birthdays, weddings)
How to segment
Now that it's clear there are so many ways to segment our audience, that overwhelming feeling might return. We don't have to use all of this data to segment our customers because then we would have no one to recruit, and each customer would be a segment.
There are two main ways I then think about how exactly I want to segment:
- By profit
- By study goals
✔ By profit
Revenue-generating customers are important. They are the customers who help the business stay in business. Segmenting your customers by how much revenue they generate and then using that to understand how those customers work, what they do, and how they feel can help you identify unmet needs or pain points that hugely improve your product.
Profit is often a very nice starting point if you are unsure where to start.
✔ By study goals
Using study goals is where this process gets much more contextual and dependent on your organization.
Whenever thinking about segmentation, think about the goals you are trying to accomplish with your study and use those to help inform you what information you need.
For example, these are a few ways I've segmented customers in the past with study goals.
✔ By personas
When I was first generating personas for a company, I had no idea where to start. We had a bunch of different clients and users.
My first step was to go to the account managers to understand who they were talking to regularly and who was in our product most often. I then went to the data and finance team to understand what types of companies were generating the most revenue.
This information gave me what I needed to decide on my first segmentation for personas:
- The role we would focus on recruiting was social media managers because they were in our product the most often and could give very effective feedback
- The company size we would focus on would be large companies because they were our highest revenue drivers
- We would first focus on companies in the US because they were also our biggest revenue drivers
This information allowed me to narrow the scope of "who are our users" to start building our first personas.
✔ By generation
For another project, I was trying to understand general fashion trends. While fashion trends tend to vary, we wanted to understand who was using (and creating!) the most recent trends in fashion. Ideally, we wanted to innovate to highlight fashion trends in an e-commerce setting.
For this particular project, we did a lot of market research into who was most engaged with fashion trends and also looked at the age range of people using our product and how that age range related to revenue.
Through this information, we decided to focus on Gen Z, as they were most interested in engaging with fashion trends and a significant potential revenue driver for our platform.
✔ By location
One last example is in the food delivery space. When working with food delivery, I had no idea where to start because the audience felt incredibly broad.
So, when in doubt, I went to understand where the profit was coming from, and the two major variables that stuck out were location and frequency of orders. Once we had people ordering ten times from our platform, they would come back regularly.
By understanding this segment, we decided to focus on particular locations—but also on people who ordered less than ten times to understand what could have gone wrong. This information helped us improve retention.
As you can see, there are so many different variables we can look at when it comes to segmentation, but using profit and goals as a jumping-off point.
Don't get discouraged
Please keep in mind your first segmentation is rarely correct. It’s impossible to look at and make judgments based on 100% of your customers at once. The best thing you can do is start moving forward based on your goals and understand which segments are essential for your organization.
Instead of being daunted by the entire problem space, segmentation enables you to look at different groups to identify differences and create smaller, manageable projects for your team. Segmentation can also make you a much more effective and impactful user researcher!
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Nikki Anderson-Stanier is the founder of User Research Academy and a qualitative researcher with 9 years in the field. She loves solving human problems and petting all the dogs.
To get even more UXR nuggets, check out her user research membership, follow her on LinkedIn, or subscribe to her Substack.
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