Let\u2019s get right to it, shall we?<\/p>\n
What is user segmentation?<\/h2>\n
User segmentation is the process of grouping users based on shared characteristics, like demographic properties or behavior.<\/p>\n
Thanks to segmentation, teams can extract meaningful insights<\/a> from user behavior data, design personalized experiences <\/a>for users, and target them with relevant messaging.<\/p>\n There are two main reasons why user segmentation is non-optional.<\/p>\n Firstly, it allows you to make valid conclusions from user behavior analysis<\/a>.<\/p>\n Think about it:<\/p>\n Your user base isn\u2019t homogenous. For example, users have different goals or use the product on different devices. Consequently, their behavior patterns vary. Analyzing product usage<\/a> without taking it into account would skew the results.<\/p>\n It doesn\u2019t stop there.<\/p>\n By comparing the behavior of different user segments, you can find ways to improve the user experience<\/a>. For example, you could compare the behavior or your power users and churned users <\/a>with the same use case.<\/p>\n Secondly, user segmentation enables SaaS organizations to make the customer experience <\/a>more relevant for their users.<\/p>\n For example, users with different goals will need different features to accomplish them, and the onboarding process should reflect this. Thanks to segmentation, you can trigger onboarding flows<\/a> tailored to different use cases.<\/p>\n Modern analytics tools allow you to segment your users based on various characteristics.<\/p>\n Here are a few segmentation types commonly used by SaaS teams.<\/p>\n This type of user segmentation uses customer data that you\u2019d normally find in your CRM, like their pricing plan type<\/a>, sign-up date<\/a>, or spending history.<\/p>\n Such segmentation can help marketing and sales teams retain customers<\/a> and drive account expansion through upsells or cross-sells.<\/p>\n Demographic segmentation is not just about geographic segmentation.<\/p>\n It groups users based on their personal and population characteristics, like age, gender, education, language, geographic location, or family background.<\/p>\n This kind of segmentation is useful for analyzing your target audience and tailoring your marketing efforts<\/a>. You can also use it to localize user experiences<\/a>.<\/p>\n Firmographic segmentation uses information about users\u2019 companies. For example, you could segment users based on their industry, company size, maturity, location, or financial details, like revenue.<\/p>\n In behavioral segmentation<\/a>, you create segments based on their product usage. That\u2019s all the things they do inside the product \u2013 or don\u2019t.<\/p>\n For example, you could segment users based on whether they use a feature<\/a>, when they perform specific actions, or how long it takes them to complete tasks.<\/p>\n Psychographic segmentation<\/a> uses information about shared psychological traits. It\u2019s not about their objective properties but rather what they believe: their values, opinions, interests, and lifestyle choices.<\/p>\n SaaS companies can use this kind of segmentation to diversify their product lines and tailor marketing campaigns to attract the right customer base.<\/p>\n Ready to create your user segmentation strategy? Here\u2019s our 6-step guide to the process.<\/p>\n The process starts with defining the main user personas, or fictional representatives of the main user groups. For example, Userpilot\u2019s personas include the product manager and the product marketing manager.<\/p>\n What information do you need to collect about them?<\/p>\n Make sure you know their:<\/p>\n With user personas in place, it\u2019s time to collect user data for segmentation.<\/p>\n This is easy to do with welcome surveys<\/a> when they first log into the product.<\/p>\n There\u2019s a misconception based on B2C experiences that welcome surveys add<\/a> friction to the user journey and should be kept to a minimum.<\/p>\n In B2B, this is true only to a certain extent. Irrelevant questions can discourage business users from carrying on, but they\u2019re usually happy to answer questions that help you deliver a better customer experience<\/a>.<\/p>\n The next step is choosing the segmentation model. This depends on your goals.<\/p>\n For example, if your goal is improving customer satisfaction<\/a>, you might use psychographic segmentation<\/a> and group your users based on their NPS or CSAT<\/a> survey responses. In this way, you can analyze differences in product usage<\/a> and target them with experiences designed to address their pain points.<\/p>\n The reality in most SaaS companies is that teams try to move lots of needles at the same time, so you\u2019re very likely to use all of the models above in parallel.<\/p>\n Having chosen the customer segmentation model and assigned users to different segments, you\u2019ve got to collect and analyze the relevant data.<\/p>\n Most of the time, however, you may already have the relevant data because you\u2019re already tracking feature usage<\/a> or specific events. All that is left is to visualize in reports <\/a>or dashboards <\/a>and filter the data for specific segments.<\/p>\n Still looking for a user behavior analytics<\/a> tool? Find a platform where you can tag features and events without touching code. Or better yet, get one that tracks it all automatically, like Userpilot.<\/p>\n As you have analyzed the behavior <\/a>of your user segments, use the insights to work out how to improve the metrics you\u2019re targeting.<\/p>\n It\u2019s hard to make general recommendations on how to do it because it depends on the findings and your goals.<\/p>\n For example, suppose your goal is to improve user satisfaction and you discover that the dissatisfied users underutilize a feature that\u2019s very relevant to their use case. In that case, you can design in-app patterns to drive feature discovery<\/a> and adoption.<\/p>\n Or if you realize that it\u2019s mostly mobile users that tend to be less satisfied, your focus should be on optimizing the mobile experience.<\/p>\n As you implement the changes, monitor their impact on the key metrics<\/a>, and iterate until they move the needle in the right direction.<\/p>\n You can do it by visualizing the metrics<\/a> in a graph and tracking trends over time. If there are multiple metrics to track, create dashboards<\/a> where you can view all the data between switching views.<\/p>\n In the previous section, I gave you an example of how you can use user segmentation to drive product results.<\/p>\n Let\u2019s look at 7 more instances of user segmentation applications aimed at improving retention<\/a>.<\/p>\n Imagine logging into the product for the first time and being flooded with information about all the product features and processes, most of them irrelevant.<\/p>\n How would you feel? For me, it would be extremely overwhelming and make me wonder if I\u2019ve chosen the right product.<\/p>\n To avoid overwhelming users and reduce the time they need to reach value, use segmentation to personalize their experiences<\/a>.<\/p>\n Here\u2019s how:<\/p>\n For each user persona, design a bespoke onboarding flow focusing on the core features they need to accomplish their objectives.<\/p>\n Unsure of the quickest route to value<\/a> for each customer segment? Use path analysis<\/a> to see what your successful users are doing. Then, you can build guidance to lead new users down the same path.<\/p>\n When new users sign in, trigger a survey to segment them and use their responses to launch the right interactive walkthrough<\/a> or onboarding checklist<\/a>.<\/p>\n How you engage your users depends not only on their JTBDs but also the stage in the user journey<\/a>.<\/p>\n For example, for newly acquired users on the free plan, your priority is to activate them and convert them into paying customers<\/a>.<\/p>\n To segment users based on their user journey stage, define the milestones that they need to reach to progress to the next stage, like signing up<\/a> for the product or converting to a paid plan.<\/p>\n Next, use your product analytics tool to track the events<\/a>. With Userpilot, these events are most likely to be tracked automatically with our auto-capture feature. Whenever you need them for segmentation or analytics, you only need to label them with our no-code visual labeler.<\/p>\n Once the user experiences the product value<\/a> and adopts the key features, they\u2019re ready for secondary onboarding<\/a>. That\u2019s when they discover more advanced functionality that enables them to realize the full product potential.<\/p>\n How do you know they\u2019re ready?<\/p>\n Again, use your analytics tool. Set up a custom event made up of the actions needed to activate, like sending 10 messages, and segment all users who complete the event.<\/p>\n As soon as this happens, start targeting them with onboarding flows <\/a>focusing on more complex features.<\/p>\n Disengaged users are one of the key user segments because they have a massive impact on product success<\/a>. If a user doesn\u2019t engage with the product regularly, they\u2019re likely to churn<\/a>.<\/p>\n That\u2019s why it\u2019s good practice to segment such users and target them with communications to bring them back to life<\/a>.<\/p>\n If a user doesn\u2019t engage with a single feature only, it\u2019s easy to give them a nudge with an in-app message<\/a>.<\/p>\n However, this won\u2019t work with inactive users. To reach them, try push notifications<\/a> (if they opted in to receive them) and emails<\/a>.<\/p>\n Power users <\/a>are the most successful and loyal customers<\/a>. They make excellent product advocates <\/a>because they know the product well, can use it competently to derive value<\/a>, and are highly satisfied.<\/p>\n How do you know someone is a power user?<\/p>\n Again, depends on the product. For example, it may be the users who have been paying customers for a certain period, have adopted certain advanced features<\/a>, or use the product frequently enough.<\/p>\n To harness their loyalty for WOM<\/a>, consider inviting them to a referral scheme in which they get rewarded for recommending your product, an affiliate program, or making them product ambassadors.<\/p>\n This is another example of segmentation <\/a>based on the stage in the user journey and it builds upon secondary onboarding.<\/p>\n If your SaaS is like most others, you have a tiered pricing system, with certain features available only in the higher plans. You may also offer features as add-ons.<\/p>\n The goal of such a pricing model is to maximize customer lifetime value<\/a>.<\/p>\n The catch is that account expansion<\/a> efforts don\u2019t work if the features aren\u2019t important for the user.<\/p>\n What\u2019s more, you can\u2019t push users to upgrade to a higher plan after they log in for the first time. They first need to discover what the product has to offer and adopt the features in the free plan<\/a>.<\/p>\n Only then can you start targeting them with upsell and cross-sell<\/a> messages. They could be triggered contextually, for example, when the user completes an event that indicates they\u2019re ready.<\/p>\n Before you roll out your features <\/a>to the entire user base, you may want to consider a dark launch<\/a> or beta test to assess its performance in real life.<\/p>\n Which users should you choose for the beta test?<\/a><\/p>\n Firstly, the new functionality needs to be relevant to their use case. Secondly, they must be a representative sample of the user population. Thirdly, they must be willing to test your product <\/a>and, ideally, provide feedback<\/a>.<\/p>\n To find users who meet the last criteria, you can segment them by the time to adoption and survey response rates<\/a>.<\/p>\n Once your segment is ready, use toggles to enable the feature to them and send them in-app messages<\/a> inviting them to take part in the test.<\/p>\n The ability to group users based on shared properties or behaviors is essential for customer success. It allows teams to better understand their user needs and tailor their experience to satisfy them.<\/p>\nWhy does user segmentation matter?<\/h2>\n
Different types of user segmentation<\/h2>\n
User segmentation based on customer data<\/h3>\n
![\"User](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/userpilot-user-profile_ffaf73b9c6ec2be555d8bc112e8e8d07_800.jpg)
<\/picture>Demographic segmentation<\/h3>\n
Firmographic segmentation<\/h3>\n
Behavioral segmentation<\/h3>\n
Psychographic segmentation<\/h3>\n
How to create a customer segmentation strategy<\/h2>\n
Step 1: Create user personas<\/h3>\n
![\"User](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/user-persona-end-user-behavior-monitoring_ae91a15d51301398c65c58ad1f5b6918_800.png)
<\/picture>\n
Step 2: Collect customer data<\/h3>\n
![\"Welcome](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/design-welcome-survey_789f4498f063a8631beb5b95d1039429_800.png)
<\/picture>Step 3: Decide on your segmentation model<\/h3>\n
Step 4: Track user behavior among different user segments<\/h3>\n
![\"Filtering](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/screenshot-2025-01-05-at-145412_918e855e6099e17ded1b9201d8ee7d5f_800.png)
<\/picture>Step 5: Create strategies for different user segments<\/h3>\n
![\"New](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/new-feature_28b9764e3bfd4ec3bbe2f89a98539e54_800.png)
<\/picture>Step 6: Measure the impact of those strategies<\/h3>\n
![\"Product](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/product-usage-dashboard_4ece01a8be06e674e6588e72f45c2a94_800.png)
<\/picture>User segmentation examples to improve customer retention<\/h2>\n
Segment new users to personalize customer experience<\/h3>\n
![\"See](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/clearcalssegmentationbyrole_a10d2c0ba176aeb3b713728964f3ac2f_800.webp)
<\/picture>Create user segments based on the stage in the customer journey<\/h3>\n
![\"Visual](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/event-autocapture-dashboard_be5e7e2de1afcceef94ab9e6bdb25503_800.png)
<\/picture>Segment active users for the secondary onboarding process<\/h3>\n
![](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/impala-tooltip-examples_ef77799132cdcb69af93a73b8361bdda_800.png)
<\/picture>Segment disengaged users to improve user engagement<\/h3>\n
![\"User](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/disengaged-users-segment_f181f4898dd4e22093db69a0420a5c08_800.png)
<\/picture>Segment power users for WoM marketing campaigns<\/h3>\n
![\"Segment](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/create-conditional-nps-follow-up-with-userpilot-improve-nps_e6d4f575149c5c1389eab2985d098a56_800.webp)
<\/picture>Segment customers to contextually prompt upsells<\/h3>\n
![](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/upsell-tooltips-customer-retention-strategy_8371fc94d268bb1fa5ede723b5881729_800.webp)
<\/picture>Segment users for early feature announcement<\/h3>\n
![\"User](\"https:\/\/blog-static.userpilot.com\/blog\/wp-content\/uploads\/2025\/09\/beta-testing-survey_65dd7f8cacfa0c17b94688bf2bd78c36_800.png)
<\/picture><\/figure>\nConclusion<\/h2>\n