How many customer segmentation tools are out there? Dozens, hundreds?

Then how do you determine the best one for customer segmentation analysis to show customer retention and uncover product growth opportunities?

Here, we have listed a few popular customer segmentation software options and described their pros and cons.

What is a customer segmentation tool?

Customer segmentation software is a tool that allows you to group customers based on shared characteristics such as their in-app behavior, the NPS score, completed milestones in the customer journey, etc.

These tools automate the entire segmentation process by pulling customer data from multiple channels and enabling businesses to analyze large amounts of customer data, such as age, location, needs, wants, shopping habits, and more.

What are the benefits of customer segmentation tools?

Here we will briefly outline the key benefits of customer segmentation tools and you will learn how to act on and derive value from the customer data collected.

Let’s dive in.

Analyze customer data and understand users better

Customer segmentation tools will help you dive deep into customer data sources and uncover invaluable information about their experiences with your product.

By using that info, you will form a clear understanding of customers’ needs and pain points.

For instance, you can identify what customer segments churn right after signing up. And vice versa, customer segmentation tools will also analyze data to help you find the most profitable customer segments.

Create personalized in-app experiences for different customer segments

The customer segmentation process will allow you to create personalized in-app experiences and onboarding flows tailored to users’ specific cases.

You can segment customers by greeting them with welcome screens and collecting the info by using micro surveys.

Such personalization will activate your existing customers, and make them happier and more engaged. This will ultimately boost your revenue as customers will become loyal.

Create targeted marketing strategies

Customer segmentation tools enable businesses to craft highly targeted marketing strategies tailored to the unique characteristics, behaviors, and preferences of specific customer segments. This benefit empowers businesses to maximize the impact of their marketing efforts in several ways:

• Improved Relevance: By understanding each customer segment’s distinct needs and interests, businesses can create marketing messages and campaigns that resonate with their audience. This relevance increases the likelihood of customer engagement and conversions.
• Optimized Resource Allocation: Targeted marketing strategies allow businesses to allocate their resources more efficiently. Rather than using a one-size-fits-all approach, resources can be focused on segments that are more likely to yield a higher return on investment (ROI).
• Enhanced Customer Experience: Segmentation tools help businesses deliver a more personalized and enjoyable experience to their customers. When customers receive relevant content and offers, they are more likely to feel valued and remain loyal.
• Increased Conversion Rates: Tailored marketing strategies increase the likelihood of converting leads into customers. By addressing specific pain points or desires within each segment, businesses can boost conversion rates and drive more sales.

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What can a customer segmentation tool provide?

Let’s dig a bit deeper and discover what customer data and actionable insights you can derive from dividing customers into different groups.

Demographic segmentation data

Use demographic market segmentation to understand your target customers’ gender, age, education, income, and so on.

Demographic segmentation helps SaaS companies better understand their customers and address their needs more effectively. Product marketers also use this data to create more efficient digital marketing campaigns and tailor their email marketing campaigns and messages accordingly.

Geographic segmentation data

Geographic market segmentation is pretty straightforward. It implies segmenting your audience based on country, location, city, or zip code. Marketing teams can also utilize this data to understand what market is more profitable.

Behavioral segmentation data

Behavioral segmentation data is the most valuable for SaaS companies. When conducting regular customer segmentation analysis and behavioral analysis, you can observe how users engage with your product and spot obstacles they face along the user journey.

This data type involves the NPS score, customer efforts score, feature usage, product adoption, etc. With a good customer segmentation tool like Userpilot, you can literally spy on your customers, act on insights, and build the best-in-app product experiences.

Psychographic segmentation data

Psychographic segmentation enables marketers to segment target audiences based on their hobbies, habits, lifestyle, and social status to create precisely targeted marketing campaigns and deliver more conversions.

10 Best customer segmentation tools to try in 2023

Now let’s talk about the 10 best customer segmentation software and tools we recommend you to try.

We will outline the pros and cons of analytics and segmentation features for each tool. You can then decide which suits your needs best.

Userpilot – customer onboarding and segmentation software

Userpilot has advanced customer segmentation options based on product usage analytics and more. This tool lets you create customer groups based on the wide range of in-app behavior:

• Set custom events for tracking any feature usage. Track how often users of different segments click on a particular tooltip, button, or any other element inside your app.
• Segment customers based on their roles and use cases.
• Track customer engagement to find stalled users.
• Segment customers based on their journey stage to detect friction that retard them from reaching the activation point or milestones.
• Track feature adoption of different user segments.
• Segment customers to collect feedback from various audiences with in-app surveys.
• Do A/B testing to make data-driven decisions, and more.

Pros of Userpilot

• A versatile tool with advanced customer segmentation options.
• Code-free and easy to integrate.
• Excellent customer success team to help you get started.

Cons of Userpilot

• It may take a while to figure out how all the features work.
• Price is more suitable for mid-market and enterprise companies.

Userpilot Pricing

• 14-day free trial with all features included
• From $299/mo or $249/mo if billed annually

Baremetrics – Subscription analytics and segmentation tool

With Baremetrics, you can easily access key financial metrics and analyze how different groups of customers contribute to the revenue. In short, you can track MRR, ARR, ARPU, customer lifetime value dynamics, and more within different audience segments, such as new trials, upgrades, swithers, cancellations, refunds, etc.

Pros of Baremetrics

• Awesome tool for understanding how each user contributes to a company’s growth.
• Easy to set up.
• Very intuitive and user-friendly interface.
• A full live demo version of the product is available, so you can play around without signing up.

Cons of Baremetrics

• The onboarding process will take some time to grasp all the features and filter options.
• You cannot create custom segments.
• Setup support is not included in the first plan.

Baremetric Pricing

• Free trial available
• Starts at $108/mo

Kissmetrics – Event analytics and customer segmentation tool

This tool combines product and marketing analytics to track customer behavior inside your product and marketing efforts in one place. Such data allows you to prioritize what gets fixed and tailor more targeted marketing strategies and campaigns to the target audience.

Pros of Kissmetrics

• Link product analytics to marketing metrics to understand what campaigns acquire the most valuable prospects.
• Geared for SMB.
• You can measure how long it takes for customers to move through their conversion funnel.
• Compare feature usage over time.
• See your customer churn rate.

Cons of Kissmetrics

• Despite their focus on the SMB market, using the tool will cost you $299/mo (billed annually).
• No self-service. You need first to request a demo.

Kissmetrics Pricing

Starts from $233.91/mo; billed annually.

Segment – Customer data platform

Segment is a data management tool that aggregates data points from mobile and web apps and also can connect 300+ software to process and access this data pool in one interface.

Pros of Segment

• Saves time and developer costs, making it easy to implement new tools for analytics and marketing stacks.
• Tracks every invalid event and compiles daily in-app reporting.
• Allows marketing teams to create custom scenarios for marketing campaigns based on events.

Cons of Segment

• Many integrations make it complicated to manage.
• Reportedly, it might be tricky to set things up for new customers.

Segment Pricing

• Free plan with limitations
• Paid plan starts off at $120/mo

Amplitude – Digital analytics and customer segmentation software

Amplitude offers valuable insights into user behavior to drive growth and enhance your user experience. Amplitude combines segmentation with behavioral analytics, experimentation, and personalization.

Pros of Amplitude

• With Amplitude, you can set and track any events that happen across your product. This could be as simple as a button click, making a payment, or analyzing’ user interactions with a particular feature.
• Create specific customer segments catered to a particular set of user properties.
• Segment customers at the different user journey stages to analyze what unforeseen roadblocks they may encounter.

Cons of Amplitude

• Setting up events you want to track can be tough. Reportedly, the learning curve can take lots of time.

Amplitude Pricing

• Free plan
• Pricing available from 49$/month

Heap – Behavioral segmentation tool

Heap is all about what a customer is doing with your product. It tracks every user action automatically – clicks, swipes, taps, page views, and more – so you don’t have to decide which events to track.

Pros of Heap

• A code-free tool.
• Automatically gauges customer efforts to complete a concrete event and shows how many clicks were done within a specific step and what the drop-off rate is.
• Create user segments based on any combination and actions taken on your site or app.

Cons of Heap

• As Heap tracks and records every click that happens in your app, it creates a whopping amount of data points that need additional time to filter out.
• It costs a pretty penny.

Heap Pricing

• A forever free plan of up to 10,000 monthly sessions
• Plan pricings are available upon request

Mixpanel – Product analytics and segmentation software

Another event-based product analytics tool that lets you set custom events for any step of the customer journey and pull data about unmet customer needs and the customer experience.

Pros of Mixpanel

• Group users by any pre-defined criteria on every customer journey stage.
• Compare user cohorts to each other to find behavioral patterns and distinctions.
• Tie up your website to your product and analyze the difference in the user behavior from multiple channels. In other words, you can create separate user cohorts attracted from social media and organic channels and compare them to find out the distinction in their product adoption.

Cons of Mixpanel

• Overwhelming interface.
• Expensive.
• Steep learning curve.

Mixpanel Pricing

• Freemium
• The price builds up with the number of monthly tracked users. For 10K users, you will fork out $1,599 annually.

Piwik PRO – Analytics suite with segmentation capabilities

Piwik is a PRO version of Google Analytics that combines website and in-app behavioral segmentation tools.

With Piwik PRO, you can investigate customers’ touch points across your product and act on them to increase customer satisfaction and loyalty.

Pros of Piwik

• Fast learning curve and super user-friendly interface, according to the customer reviews.
• You can group the most engaged users and discover what marketing channels brought them to scale it up.
• Form segments on user experiences to identify drop-off points and spot which areas of your product generate errors.

Cons of Piwik

• Unlike Google Analytics, Piwik lacks a fancy reporting builder.
• The interface is rough around the edges. Not everyone likes it.

Piwik Pricing

• The free plan includes 500,000 monthly actions
• Enterprise plan upon request

Reveal – Customer value optimization platform

Reveal is another customer segmentation tool that is widely used by customers. With Reveal, you can increase the number of loyal customers, improve customer lifetime value, and maximize profits with automated RFM segmentation and actionable insights for your eCommerce business.

Pros of Reveal

• Perform RFM segmentation or business profitability segmentation like revenue vs. margin by customer type.
• Tailor NPS surveys to RFM groups, customer attributes, or categories.

Cons of Reveal

• The interface is very complex, so it takes some time to get used to it.
• Insufficient knowledge base.
• Expensive.

Reveal Pricing

• 30-day free trial
• Flexible pricing that grows with your revenue; starts at $9999 annually.

Google Analytics – Free audience segmentation tool

Among all audience segmentation tools, Google Analytics is the most popular one. It’s free and lets you work on a tremendous amount of customer data.

But is it the best in the market? Here are the pros and cons:

Pros of Google Analytics

• Segment users by their web and mobile technologies.
• Assign events on the website and form cohorts based on accomplished events.
• Group customers by demographic information.
• It’s free.

Cons of Google Analytics

• Though GA is perfect for website traffic data analysis, it’s useless for in-app events analytics as it doesn’t work with that data type.

How to choose the best customer segmentation tool?

There are a lot of tools on your plate! And all of them are so similar. So, how to come off with a perfect fit?

Here we’re going to share a three-step strategy to pick the best tool to address your needs.

List all the features that you need

Grab a notebook and write down all the troubles, metrics, and questions you want to address. Then, create a list of features that you need at this moment.

Make sure to choose only the most relevant ones.

Read real user reviews on G2 & Capterra

Do some research on software review sites like G2 and Capterra.

Read real reviews from users who have already played with the tool. It is important to pay attention to negative comments in order to understand what difficulties and how often you may encounter when using a tool.

Capterra software reviews platform.

Sign up for a free trial to test the tool

Select several tools that are within your budget and meet all your needs. Make sure that all of them offer free trials so you can test it out to see whether it’s a good fit for you.

Register for a free trial and test, test, test!

ProTip: Request a demo with their salesperson to save yourself time on the learning curve. They can take you straight to the value.

Conclusion

Now you’re fully equipped with the best customer segmentation tools! You can check them out and choose the one that’s right for your SaaS.

If you want to test Userpilot, create different customer segments yourself, and collect invaluable insights, then book a demo call with our team to get started!

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