segmentation and targeting blog header image

How to Optimize Your Marketing with Segmentation and Targeting

When was the last time you got a push notification that wasn’t relevant? Or one that you’ve already received a dozen times but not acted on? Maybe the messages you get are a mixed bag, a hit and miss hotch-potch of valuable and useless? Me too – and we’re not alone. Businesses waste a lot of time, money and precious resources shipping mobile marketing campaigns that miss the mark and fail to garner the results they’re looking for because their marketing teams are failing to capitalize on the insights their data can – and often does – give them. Nowhere is this more true than in the realm of segmentation and targeting. 

When it comes to mobile marketing, there are very few things that are going to lower risk while increasing returns, and user segmentation is one of them. Segmentation is the heart of your marketing and growth strategies is going to help you to:

  • Improve your app’s value proposition
  • Build a more customer-centric app
  • Tap into new markets and spot lucrative new opportunities
  • Discover new audiences
  • Minimize customer acquisition costs
  • Reduce churn
  • Increase sales
  • Better target your audience with relevant, valuable messaging
  • Grow a mobile app that truly addresses the needs of all of your users
  • and support the creation of campaigns that will hit each unique audience segment with an optimized offer – every time.

… and yet, only 4% of marketers are segmenting with multiple types of data, with 42% of them not segmenting at all.  

What segmentation is

Identifying the users of your mobile app and understanding their needs plays a crucial role in every app’s success. No two users of your app are exactly the same;  each has their own preferences, behaviors, needs and expectations, and without segmentation,  it’s going to be nigh on impossible to develop campaign messaging that’s both relevant and valuable to each of these individual users.

User segmentation involves segmenting your users into groups based on shared characteristics and qualities, helping you make sense of the data points you have on your users so that you can reach them with more personalized, valuable messaging. This could take the form of behavioral information, such as users who visit your app several times to check out an item before making a purchase, or demographic information, like app users between the ages of 24 and 35 who live in New York.  Indeed, there are several types of segmentation that you’ll want to consider, depending on your goals:

Demographics – based on age, gender, occupation and income etc, demographic insights can be a great starting point for developing segments that enable you to ship personalized user experiences that match the different needs of your target audiences.

Psychographic – based on user interests, lifestyle, values, beliefs, hobbies etc. Knowing how old your users are, where they live and how much they earn is one thing, but none of that can really tell you much about what that individual likes and doesn’t like, what motivates them and inspires them, the values they live by and the beliefs that they hold dear. That’s where psychographic segmentation and targeting come in, helping you to understand your user-base more deeply, and by default, more able to deliver the app experience they’re looking for – think personality, values, interests, lifestyle, opinions and beliefs, and you’re on the right track.

Geographic – based on city, state, neighborhood, country etc, using location-based segments mean you’re in the optimum position to deliver relevant, localized content – think discounts for nearby brick-and-mortar stores, offers to lure them away from nearby competitor stores, and weather/season-focused push campaigns (think BBQ-related products for a hot summer day).

Behavioral – based on user activity, session frequency and length, browsing activities, average purchase value etc, understanding how users are engaging with your app means you can reach them with the right content and the right time, increasing engagement and revenue opportunities.

Technographic Segmentation –  based on preferred  mobile devices, technologies and software etc, how your user-base makes purchases is important information that you’ll need when looking at the user journey and shipping campaigns that ensure that the process is as easy and as frictionless as possible. 

Bottom line? Segmenting your customers will make it far, far easier for you to reach your customers at the optimum moment with the optimum message. It’s the difference between the tried-tested-and-failed spray and pray approach and finely tuning your campaigns to address the specific needs and interests of each and every one of your customers.

Image of pie chart with segmentation and targeting based on location

How to get started with segmentation and targeting

Know your audience

Who are your users? How old are they? How did they arrive at your app? Why do they use your app? How often do they use your app? How long do they usually spend in your app? How often do they make a purchase? Before you do anything with segmentation, you need to learn as much as you can about your audience and how they’re using your app – the segmentation models outlined above are your starting point, and your analytics platform is your tool. 

Skip the granularity (for now)

It’s easy to get carried away with segmentation and targeting when you first get started, but if there’s one piece of advice you’ll want to keep in mind from the get-go, it’s to avoid getting bogged down in unnecessary details. It’ll be useful for you to know how old your users are, and it might be useful to know their birthday, but it’s probably not that useful to know what their star-sign is (unless you’re delivering daily horoscopes). If you have more than three adjectives that define your segments, you’re probably over analyzing.

Be clear about your goals

You won’t be able to ship effective, successful mobile marketing campaigns unless you’ve identified the goals you’re trying to reach:

  • Improve the onboarding process?
  • Identify new opportunities that you might be missing out on?
  • Decrease churn?
  • Increase push notification opens and click-thru’s?

After establishing your (simple!) segments, identify actionable, measurable goals for each segmented group then look to build your campaigns around them. 

Test, test and test again!

Users will change, your app will change, and the world will change – which means that the campaigns you ship based on your segments today are unlikely to be the same campaigns that reap rewards in 12 months time. This means you’ll always need to test to establish whether or not your segmentation and targeting strategy is working. When it’s not serving you any longer, revisit and revise where needed, but never take your eye off the ball – your competitors will always be waiting in the wings to capture the attention of customers who you’ve stopped appealing to.

Screenshot from Kumulos product of segmentation and targeting tool.

Segmentation and targeting in action

Customer segmentation and vivid buyer persona descriptions bring specific buyers to life, increasing the chances of selling products and reducing the high risk of product failure. Companies use these descriptions to upsell and cross-sell additional products, improve the customer experience, and build overall brand loyalty. Segmenting helps companies identify their best groups of customers, understand which messaging and buying channels they prefer, and sell in a cost-effective manner.

Target Lapsed Users

We all do it – download apps, use them obsessively for a short window of time, and then we’re on to the next shiny new thing. The trick is to build an app so engaging that it becomes a key part of your users lives, but when that’s not the case, you need to be constantly reaching out to re-engage lapsed users. When it comes to segmentation and targeting, defining your lapsed users will depend on the usage frequency you defined at the start of your app journey. Every day? Once a week? Maybe 3 or 4 times a year if it’s a travel app? Most mobile marketers tend to include users who haven’t launched their app for over twice the usual interval … so if a customer routinely dives into your app once a week you’d want to add them to your lapsed user segment if they haven’t logged in for a fortnight. 

How to do it

Re-engaging lapsed users is a fine art – we could (and will!) write an entire article on it, but in the meantime, think about enticing them back with a personalized offer, updates on what’s new, or an invite to try out a new feature, product or service. You could also think about including deep links in these push campaigns which take users straight to the page you’re looking to promote, minimizing friction and making that re-engagement as smooth as possible… 

Turn power users into vocal brand advocates

One of the oldest marketing strategies in the book, a great way to elevate the reach of your app and grow your user base is by word-of-mouth, or ‘advocacy marketing’.  Advocacy marketing leverages your app’s most loyal, passionate and valuable segment of users – ‘power users’ that use your app frequently and for above-average session lengths – for marketing across digital and social channels, paying dividends both to them and to your business.

How to do it

Create a segment of power users then engage them with highly engaging content they can share with colleagues and friends across channels such as SMS, social and email (don’t forget your deep links); invite them to provide an app review in exchange of coupons or discounts; and run competitions or fun challenges that they want to share with like-minded friends. All of these activities will ensure your brand and app are being seen by as wide an audience as possible – and increase your chances of hiking up these downloads. 

Reduce cart abandonment

Despite the fact that mobile apps have the lowest cart abandonment rates (compared with desktop and mobile websites) abandoned carts are still one of eCommerce’s greatest pain points that costs billions every year. Creating user segments to address the issue is one of the most effective ways to minimize the issue, and there are a number of approaches you can take. Worth considering:

  • Hesitant users – we all know them (I’m one myself) – they see an item they’re interested in, pop in their basket, not quite ready to pay, and then forget about it.
  • Users that know they’ve left items in their cart and are patiently waiting for the coupon they know will turn up to entice them back 
  • Users that have low-value items in their cart
  • And users that have high-value items in their cart

How to do it

However you choose to skin it, you’ll want to create push messages that differ for each segment. If it’s a hesitant user you’re targeting, a straightforward gentle reminder can work wonders – just link them back to their cart to complete their purchase (not forgetting to ensure you’ve nailed the seamless, frictionless checkout experience that gets them from cart-to-completion in as short a time as possible. For users with low-value items languishing in their cart, a push message that draws their attention to a product that would be the perfect partner for the item (a matching high-value pair of shoes to go with the shirt in their basket, for example – preferably with a discount) could work its magic. And for users with high-value items in their cart, a message that brings them back with the promise of a coupon at checkout, alongside a one-click ‘buy’ button will see your cart abandonment rates start to shrink. 

Target your power purchasers

We all know the old saying that 20% of your users net you 80% of your revenues, so it makes perfect sense to focus on that 20% when it comes to segmentation and targeting – after all, these users are keeping you in business.

How to do it

Wooing your biggest spenders with regular push messages and hyper-personalized campaigns  could include:

  • A push campaign which ships special vouchers or discounts to use  within a certain timeframe (creating urgency)
  • Exclusive discounts for orders of $50 or more
  • Free shipping for every 3rd order
  • Special offers to redeem each time they refer a friend (who, if falling into the same demographic,  may also turn out to be a high spender)

Our tip? Get creative – high spenders are worth hanging on to so you’ll want to wow them with frequent aha moments and plenty of reasons to stick around.

Target those most likely to take advantage of offers 

I confess, I’ve got offers galore languishing on my smartphone, and most of them are offers that I’ll just never use. Fact is, some people live for coupons and discounts, whereas others simply want a quick and dirty transaction and can’t be bothered scrolling through messages to find a coupon that’ll give them $1 off at checkout. The key to discovering who’s who is to run a few test campaigns across your user-base, wait to see who bites, then create your segments accordingly – when it’s time to give your revenues a boost, you’re ready to reach the customers that are going to bring in the most. 

How to do it

There are a million and one ways to optimize a coupons-based campaign – the ones we see deliver time and again are:

  • Encouraging coupon-lovers to share gamification-based promotions such as ‘Share with three friends to be in with a chance to win’
  • Advertising coupons and QR codes in-store when app users are already primed to purchase
  • Try single-use codes that offer high-value deals only during a particular timeframe  – consumers tend to prefer these over frequent, low-value discounts that they can use any time.

Conclusion

Who is your app built for? Who are the ‘power users’? What kind of content do they like to consume? What brings them back to your app time and again? User segmentation and targeting bring your app customers to life, enabling your team to ship optimum campaigns that exponentially increase the chances of engaging, retaining and selling. Businesses that use segmentation reach their customers where they are with the right message at the perfect time, enhancing the customer experience and helping to build app loyalty. If you’d like to discover more about segmentation and how Kumulos can help, let’s get the conversation started