Cracking the Code on User Segmentation Strategies

Most B2B SaaS businesses sell to and serve various categories of customers: buyers, users, admins, industries, verticals, plan types, those with or without integrations. That means segmenting your customers is essential to understanding each of their needs, behaviors and desired outcomes.

Creating a segmentation strategy, however, can feel overwhelming. There is often so much data from so many sources and no indication of where to begin.

We dedicated this month’s webinar to user segmentation strategies to help give you a leg up on getting started. Our CMO, Nicole Wojno, welcomed two subject-matter experts on the topic: Aaron Aycock (Founder and Chief Product Officer, UserIQ) and Nils Vinje (VP Customer Success, Rainforest QA).

The recording of the webinar is available here if you missed it live and want to learn more about:

  • The importance of segmentation for user adoption strategies
  • The common pitfalls and barriers to overcome
  • Departments that should be involved
  • Valuable ways to segment users
  • User segmentation models in B2B SaaS businesses

In this blog post, we wanted to dive deeper into sharing our own segmentation strategy to drive user adoption.

The Customer Journey as a Segmentation Model

An easy way to get started with segmentation is to look at the stages most users are likely to go through as they become more active, and set these as separate segments. Here are some examples that work for most B2B SaaS businesses.

The “Hello!” segment

This category of users recently signed up and are logging in for the first few times. They likely know very little about your product and need some guidance to start off on the right foot. When you have a segment created of your newest users, you can deliver welcome messages or tours, track their onboarding process and ensure that they are successfully adopting features.

The “Time’s up” segment

This segment consists of prospective buyers reaching the end of their trial period or existing customers whose contract is coming up for renewal. To ensure a smooth transition to a paid plan or the next billing period, you can proactively target this segment with a reminder or special offer.

The “Just got paid” segment

You may not always perceive it that way, but users who decided to upgrade or stay subscribed can go through a stressful time as they’ve just put their reputation and their money on the line for your product or service. You can reassure them that they made the right decision by helping them hit a WOW moment, like sending “thank you” swag or delivering a “high five” engagement.

The “You did WHAT?!” segment

Those are the users who just hit a WOW moment doing something significant that will help them make the most of your application — like combining your most valuable features.

The “No, you didn’t…!” segment

The fact that some customers did not do something during a given period can be equally revealing, indicating that they might find it challenging to adopt your product and need a little push.

How We Do Segmentation at UserIQ

To illustrate how you can use the customer journey as a segmentation model, here’s a look at the process we went through to define the milestone approach we follow at UserIQ:

Step #1: Determine milestones

The first step we took in defining our segments was to identify the critical features our most successful customers use in our application. We noticed that two milestones are typically necessary to drive adoption of UserIQ: creating a segment and launching a campaign. In fact, we found that users who combine both user intelligence and targeted engagements are most likely to see the full value of our platform.

Step #2: Build segments that group users who have hit each milestone

We then use these milestones to define users who have achieved that milestone as segments, and as they progress and hit new milestones, they enter new segments. This helps us create engagements that are milestone-based so we can smoothly guide them from one milestone to the next.

But adoption and milestone achievement aren’t always linear. It’s also important to account for users who may drop off so you can guide them back to the path to success.

Milestone Segmentation for User Adoption

In the onboarding and adoption stages, we measure progression between milestones and drop-off groups considering variables like sign up date and feature usage over a specific period. To make it to the next stage, for example, users must have logged in less than 30 days ago and also accessed the “create segment” (milestone 1) or “launch campaign” (milestone 2) features at least once.

User Segmentation by Sign Up Date User Segmentation by Feature Usage

Step #3: Combine segments to track progress and drop-off

The advantage of a milestone-based segmentation approach is that you can easily keep track of journey progress and combine milestone data to build overarching stages. For instance, we are able to tell which users have achieved onboarding success since they belong to both milestone 1 and milestone 2 segments. We can even create a specific segment for users who have hit both of those milestones and are now considered successfully onboarded.

User Segmentation by Onboarding Milestone

Step #4: Develop targeted campaigns

Additionally, breaking down the customer journey into specific milestone segments enables us to tailor our engagement efforts for bringing back users on the path to success. We might, therefore, implement different touchpoints based on where they dropped off and assess the impact on conversion at each step — answering questions like:

  • Is our ratio of successful customers increasing over time?
  • Is our drop off rate improving between milestones?
  • How are each of our segments performing overall?

User Segmentation for Re-Engagement

Segmentation is fundamental to B2B SaaS businesses because every user is unique, whether by their plan type, their desired outcome, or even their sign up date. It is not always easy to get started, however. To learn more about how to create segments and drive product adoption, listen to the full webinar on Cracking the Code on User Segmentation Strategies.

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