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Sohini Mukherjee
Sohini Mukherjee August 24, 2023

We all know the famous saying, one size does not fit all. Similarly, one marketing communication can not attract all customers.

In today’s hyper-competitive world, brands are grappling to get a share of their customers’ minds and, therefore, focusing heavily on creating experiences tailored to individual customers’ needs and preferences.

According to McKinsey, Personalization can help companies reduce customer acquisition costs by as much as 50%, lift revenues by 5-15%, and increase marketing ROI by 10-30%.

How can brands come up with more effective and enticing personalized communication and offerings? What is the key to its success?

The secret sauce is knowing the users and their journeys to the deepest level possible. This knowledge helps brands create precise user cohorts, which, in turn, fuels the success of Personalization.

If we attempt to learn the correlation between Segmentation and Personalization, let’s first understand what each of these terms means.

What is User Segmentation?

User segmentation is creating homogenous groups of users based on how they interact with your product and who they are.

User segmentation is key to providing a memorable user experience to customers from the time they become aware of the brand till they turn a brand loyalist.

Gathering user data and segmenting users form the basis of targeted user engagement campaigns crafted to each customer’s interests and goals, motivating users to keep returning to a product. This improved customer satisfaction reduces user churn, increases revenue, and helps a brand stand out from the competition.

User Segmentation

Further Reading: 6 powerful behavioral segmentation methods to understand your customers

What is Personalization?

Personalization refers to the marketing strategy that creates content unique to each customer based on the knowledge of their interests, preferences, past and current interactions with the brand, and their purchase history.

Personalization strives to provide an exclusive experience to users that results in higher brand loyalty and retention.

McKinsey research shows that 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when this doesn’t happen.

Also check out these 6 Web Personalization Examples That Drive Engagement

Important Types of User Segmentation

Demographic Segmentation

This segmentation method groups users based on factors related to a customer’s life, such as age, gender, language, education, occupation, marital status, income, etc. 

For example, a fashion eCommerce brand can create user segments by gender, occupation, and age for personalized apparel, beauty products, and accessories recommendations. 

Psychographic Segmentation 

Creating user groups based on their interests, lifestyle, beliefs, and personality is called Psychographic segmentation.

For example, a Sports product company can communicate personalized product offerings based on customers’ interests in a particular sport(s). They can even share important news from the world of sports that matches their interests to engage customers further.

Or, an audio-book company can make their offers highly personalized based on subscribers’ interests in genres such as Fiction, Biographies, Politics, Mythology, etc.

Behavioral Segmentation

Behavioral segmentation creates user groups based on how they interact with your app/website. 

For example, how much time they spend on the app, how often they visit the app, what features they use, the level of engagement they have with the app, etc.

Technographic Segmentation

Technographic segmentation can be done for individual consumers and companies.

It buckets users based on the platform they use (Mobile web, desktop web, iOS, Android),their Operating system (Windows, MacOS, iOS, Android), app version, and the tools companies use (CRM, ERP).

For example, an app update trigger can be sent to a user segment who’s using an old app version.

Firmographic segmentation 

This segmentation is done when a brand is catering to businesses (B2B).

 Subsets of customers are created based on company headcount, industry, revenue, funding, budget, and relevant products and services offered to each of these subsets.

Further Reading: How to Supercharge Customer Analysis with Behavioral Segmentation?

Personalized User Experience Fueled by Segmentation

Personalized User Experience Fueled by Segmentation

1. Personalized Product Walkthrough Based on Usage

Effective user onboarding is the key to a product’s growth and success. Seamless onboarding is critical to prevent customer churn

Segment users in a bucket who have never used a feature(s) and create awareness around that feature(s) through a personalized UI tour. This drives app adoption and helps users find the value of the product instantly.

Further Reading: Interactive Walkthroughs: Benefits and Examples

2. Precise Targeting of Different Segments 

User drop-off occurs at various stages of a funnel (for example, purchase funnel, onboarding funnel, KYC funnel, etc.). Segment users who do not convert and present personalized In-App Message content (carousels, videos, GIFs) to help them funnel through.

3. Nudge User Segment 

Detect the interests of users by observing which pages they are visiting, features they are using, the content they are consuming, or asking qualifying questions at a meaningful moment.

Bucket users based on their interests and contextually nudge them with suitable content that helps them take action (subscribe to a course or program, opt for a loan, purchase insurance, etc.)

4. Personalized Gamified Experience 

Present fun games like Spin-Wheel to user segments who are eligible (for example, customers who have made purchases worth X amount and more) to receive rewards. Users play the game and stand a chance to win guaranteed rewards or rewards based on sheer luck.

Users with low awareness of the brand can be invited to participate in a quiz. It boosts their knowledge about the product features or offerings in a fun way.

Further Reading: Understanding Human Behavior and Gamification

5. Email Personalization 

It is a great way to connect with potential and existing customers 1:1. Good email campaign strategy rides on effective user segmentation.

For example, a personalized welcome email is sent to new subscribers. Attractive discounts are offered to customers who have purchased more than one time in the past.

Further Reading: Top Email Marketing Strategies For App Engagement in 2023

Another important segment that can be targeted with appropriate personalized email is the users who aren’t actively using the app to drive them back to the product. Attach a Survey link in the email to understand their concerns, interests, and preferences.

Follow-up campaigns can be designed for people who have attended a webinar or any other marketing event.

Personalized emails are a great way to celebrate important user milestones or when users have reached a goal, such as completing 10,000 steps a day or using your app for a year.

Conclusion 

Engaging users in today’s rapidly evolving marketplace has become more challenging than ever. 

Modern consumers expect brands to act as their personal guides who can understand them as individuals and assist them in building healthy habits (fitness, meaningful eating, personal finance, sustainability), elevating personal style, enhancing their beauty and sense of aesthetics, etc.

Brands have to seamlessly craft contextual and personalized experiences that sync with each user’s preferences and interests but, at the same time, don’t become intrusive. 

More importantly, the customer experience needs to be truly omnichannel, transcending the line between offline and online interaction with the brand.

The backbone of a well-designed personalization strategy is consumer data. The ability to know users one-to-one gives brands the firepower to excel at delivering timely and relevant content and experience that improves customer satisfaction and eventually turns them into loyal brand advocates.

How can we help? Join the Revolution!

At this point, you might be wondering, “These strategies sound incredible, but how do I implement them?” That’s where Upshot.ai comes into the picture.

  1. Personalization at Scale: With our intelligent customer segmentation and personalization tools, Upshot.ai enables you to create hyper-personalized experiences. It’s like having a one-on-one conversation with each of your customers, no matter how big your audience is.
  2. User Experience Mastery: Our seamless integration and user-friendly interfaces mean that providing a smooth user experience is no longer a mountainous task. You can design and tweak customer journeys that feel natural, enjoyable, and effortless.
  3. Gamification Unleashed: Looking to turn engagement into a fun game? Upshot.ai’s gamification tools allow you to design engaging challenges, badges, and rewards that keep customers coming back for more.
  4. Omnichannel Communication Hub: Be everywhere your customers are with our robust omnichannel communication platform. Keep the conversation flowing seamlessly across platforms, ensuring a consistent and engaging brand voice.
  5. Onboarding Brilliance: From the first hello to the successful conversion, Upshot.ai’s onboarding tools guide your users through the process with ease and style, all while keeping it personalized and engaging.
  6. Rewards & Incentives Reinvented: Tailor-made reward systems, easy-to-implement referral programs, and incentives that resonate with your brand – Upshot.ai’s reward and loyalty tools has it all covered.
  7. Analytics and Insights: Monitor, analyze, and adapt with real-time analytics and insights. Understand what wows your customers and continuously evolve your strategies with Upshot.ai’s powerful analytical tools.

Upshot.ai isn’t just a platform; it’s a partner in your quest to redefine the customer experience. With our comprehensive suite of tools, seasoned expertise, and customer-first approach, we stand with you in your mission to WOW your customers in 2023 and beyond.

Ready to take the plunge? Let’s turn the ordinary into the extraordinary together. Book a demo, and let’s get started! 🚀

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