Understanding Your Users Through Segmentation
Applications are designed for people. So whether you’re a product manager designing new app features, or a marketer working to engage with customers, having a deep understanding of the people using your application is a fundamental competency. After all, the more you know about the people using your app, the easier it becomes to provide these users with useful services and desirable products. But as your user base grows, it becomes increasingly difficult to make sense of the behavior and motivations of this diverse and faceless population.
To prevent yourself from losing touch with a growing user base, it’s key to remain informed by conducting comprehensive user research on a regular basis. Unsurprisingly, this is difficult for many startups. Even the most prudent product and marketing teams can become overwhelmed with the time and man-power needed to perform sophisticated user research on a regular basis. Fortunately, user segmentation is an effective tool that can make user research and targeted marketing as efficient as it is important. In this post, I’ll explain how you can utilize segmentation to glean new perspective on your users and how to use this information to increase user engagement with your product.
Why use user segments over other research methods?
Nearly every startup how-to guide ever published will expound the necessity to keep talking to your users. Startups generally first approach this task by interviewing their users directly or through surveys. While hearing directly from your users is extremely important, interviews and surveys are time consuming and prone to bias. If your application has 100,000 monthly active users, you’d have to survey at least a few thousand of them to get a representative sample. You’d also need to conduct these surveys or interviews frequently to remain informed of any changes in user sentiment as you release new features and acquire new users. Committing resources to that kind of research can be a challenge for even the most well-funded startups.
User segmentation can provide similar insight with a fraction of the resources needed for interviews and surveys. What makes this possible is the fact that segments are created using data that you should already be collecting on your users, this data can then be used to spot trends in a user characteristics and behavior. Furthermore, because most segments are created without direct interaction with the user, the risk of bias is significantly reduced.
If you’re interested in segmenting your users, but don’t yet have a way to access the data with which to segment them, you’re in luck, because it’s not hard or expensive. ROKO Labs, among others, offer free plug-ins or SDKs, that when integrated with your application’s code, automatically begin collecting relevant user data and then visualizes trends on an easy to use dashboard.
Analytics dashboards, like the ROKO Mobi dashboard shown below, allow product managers and marketers to divine the most important aspects of an app’s health in an instant. High level metrics like new user acquisition, user churn, and time spent in app provide a decent snapshot of an app’s overall health. It’s user segments, however, that give teams the ability to analyze what user properties and behaviors are driving those dashboard statistics. And it’s understanding that “why” that will help you better address user needs and ultimately grow your user base.
Segmentation in a nutshell
A segment is a subset of your total user population that share similar characteristics. For example, a segment can be created for all users running your application on iPhone and another for all users running it on Android. This is a property-based segment, which are not tied to user behaviors. Other properties could include user time zone, current app version, or cellular carrier.
Property based segments can be interesting if you notice large engagement disparities between users with different properties. Are Android users half as likely to convert as iPhone users? If so, you might compare the quality of your Android application to the iOS one. Are users in New York spending more time in the application than users in California? Perhaps your content is better suited to the East Coast or there’s a competing app that’s more popular on the West Coast. While we cannot say for sure why engagement is higher in one segment over another, segmentation allows the researcher to identify differences in user properties that could result in diverging user behavior.
If property based segments group users by characteristics that are unlikely to change day-to-day, behavior based segments lump users together by how they’re engaging with your app. Each time a user interacts with an application, that behavior is logged as an individual event. When a user downloads your app, that’s an event. When they create an account, that’s another event. Each time they open the app, buy something, open a different screen, close the app; those are all events. Because each interaction is its own event, an app administrator has a variety of options to create segments based on a specific data point or set of data points.
Behavior based segments are best at providing insights into how engaging your application is, and whether or not that engagement is improving over time. For example, let’s say that all users who’ve logged an event on your application in the last week are considered “active.” Now let’s say that users who’ve been absent for a week but active within the last month are considered “at-risk.” By creating segments for both of those user groups, it becomes easy to see how many users are actually engaged with the application at a given time by comparing what percentage of all users fall into either group. One week later, if a larger portion of your users are included in the “at-risk” segment, there is reason to consider taking steps to retain those remaining active users before more fall into the “at risk” segment and potentially stop using the application altogether.
User Segmentation on ROKO Mobi
If you’re new to user segmentation, the ROKO Mobi platform comes with several important segments already created. Once an application is integrated with ROKO Mobi, users will begin to sort themselves into one of five behavioral segments like the “active” and “at-risk” users mentioned before. The platform also has a segment for “lapsed users,” or the those who are least likely to return, but could provide valuable feedback. A segment for “New Users” and “One-and-Done” users rounds out the behavioral segments that Mobi provides right off the bat.
The segments mentioned above have been given set parameters determined by the ROKO Labs team, however, we know that not all applications expect “active users” to return each week. That’s why ROKO Mobi provides the ability to customize user segments to best fit the specific characteristics of your application. If you run a gaming application whose users tend to visit daily or near-daily, 5 days with no activity could be cause for concern. Under these circumstances, we would suggest changing the “active user” segment to include all users active within the last 3 days and adjust the “at-risk” segment to include those inactive for 3 days or more. Conversely, a travel app might expect users to visit monthly, in which case it would make sense to expand the “active user” segment to include all users active within 30 days.
Changing segment parameters on the Mobi platform is easy, all one has to do is edit the clause that creates the segment. As you can see in the first filter below, the default formula for the active user segment includes users who have been active in the last 7 days. To change the parameters of the segment to include users who have been active within the last two weeks, just change the number of days from 7 to 14. The “Users Preview” section below shows you how many users are included in the segment based on the parameters you’ve set above.
If you’re new to user segmentation and have questions send me an email! If you’re already a user segmentation expert and have strategies you’d like to share, we would love to hear from you and find out what works for you!