How to use customer segmentation to improve CX and create delight

This guide gives you a simple four-step framework to segment your users and develop a satisfying CX. Learn how to spot and solve issues with your website or product, replacing friction and frustration with customer loyalty and delight.

4 steps to create a smooth, personalized experience through segmentation

At its core, segmentation is about finding similarities or patterns in who your customers are, what they want, and how they behave. This simple act of sorting creates benefits for your company—like increased empathy, retention, and loyalty—and, more importantly, for your customers. 

Your products or services alone provide value to your users. But in a crowded marketplace, your CX, the sum of all the interactions a customer has with you over time, is what sets you apart. 

Segmentation lets you create personalized moments that better match customer needs, turning them into enthusiastic and loyal fans. Let’s look at four steps to improve your CX through segmentation.

1. Identify relevant customer segments

Start by looking at what kind of groupings make sense for your industry, company, or team. 

Customer characteristics relevant to another company may have no bearing on your goals. For example, a marketer at an ecommerce beauty company might segment by skin type, an attribute that’s irrelevant for a marketer at a software-as-a-service company. 

So, how do you decide where to start with segmentation? Think about who uses your product or service—and where, when, why, and how. 

As a starting point, pull up any existing user personas (profiles of your target audience) and your customer journey map (a visual representation of a customer’s touchpoints with your brand).

Once you’re clear on your target customers, note any commonalities or differences between personas. For example, you might create groups or segments based on 

• Demographics: age, earnings, education level, job title, marital status

• Firmographics: industry, company size

• Geographics: country, population

• Psychographics: psychological traits like goals, interests, or values

• Technographics: iOS or Android phone, preferred browser

• Behavioral data: date of last visit, rage clicks indicating frustration

Segmenting your customers is easy when you adopt a tool like Segment, a customer data platform (CDP), or HubSpot, a client relationship management (CRM) platform. Both have user segmentation features (and integrate with Hotjar 👋).

2. Gather customer experience data 

Once you’ve decided which segments to target, get to know exactly who the different customers in those segments are. 

Say you’re a product manager, and you want to split your customers into free-version users and paid subscribers, who have very different needs. Now it’s time to dig deeper into those customers’ barriers, goals, interests, and issues. 

Collect data from a wide range of sources, including

• Customer interviews for in-depth insights and the opportunity to ask follow-up questions. (Tip: easily source interview participants from a pool of more than 200,000 people with Hotjar Engage.)

• Analytics for segment-specific metrics like retention, churn, renewal, and customer lifetime value (CLV), the amount they spend with your company over time

• Heatmaps to visualize aggregate data like users’ mouse clicks, moves, and scrolls 

• Recordings to watch how individual users interact with your site

• Surveys, particularly customer satisfaction (CSAT) and Net Promoter Score® (NPS) surveys that measure loyalty

3. Analyze your data 

Once you’ve collected your data, it’s time to interpret your quantitative and qualitative results. Quantitative data is numerical (think metrics and heatmaps); qualitative is opinion or text-based (think long-answer survey and interview responses). 

Data analysis isn’t a one-size-fits-all process. Some teams may start their process with qualitative data, while others may prefer to review quantitative first. If the latter’s more your style, analyzing your funnels is a good place to start. 

Try this approach to funnel analysis that moves from quantitative to qualitative:

1. Take in the big-picture overview in Hotjar Funnels so you can spot issues like drops in conversion fast—these often coincide with a dip in satisfaction

2. Apply filters in Funnels to see how users in different segments move toward conversion

3. Click on a data point to jump into relevant recordings and see the story behind the numbers

As you analyze, keep your customers’ needs, preferences, and pain points top of mind. By staying customer-centric, you increase your sense of empathy and figure out how to problem-solve for your customers, who just might thank you with their loyalty.

4. Personalize and improve experiences by segment

Now that you have your segments and data, decide how you want to improve the way customers experience your brand, product, or service. Personalization lets you engage your customers and build relationships with them, helping your users get more value from your offerings.

Depending on your department and role, you might personalize through

• Website or product UX design: use location-based personalization, like designing different landing page experiences based on the user’s country, or navigational personalization, like creating a ‘product recommendations for you’ carousel to reduce friction 

• Marketing emails and content: reward high-value customers with exciting promotions; establish rapport with new leads through a welcome sequence; create blog content that appeals to decision makers’ interests 

• Customer support channels: call your customers by name or meet them on the platforms they’ve demonstrated interest in

Create experiences that delight

Once you’ve segmented your customers, continue to monitor, iterate, and improve your segmentation strategy and personalization approach. 

Your customers and segments evolve as your company does. By working toward continuous improvement, you create an incredible customer experience that satisfies and delights.