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What is user segmentation, and how does it improve UX? (with types, tips, and examples)

Creating smaller user groups or segments yields meaningful data for your product team. It enables you to glean insights into who your users are, what traits they share with other users, where and when they access your product, how they interact with it, and why they use it.

This helps you connect with and understand your diverse audience more deeply—the not-so-secret ingredient to dishing out a personalized, impactful user experience (UX).

Last updated

8 Feb 2024

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5 min

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Summary

In this guide, we introduce you to user segmentation and how you can take advantage of it to cement UX efforts and create customer delight.

  • What is user segmentation? User segmentation refers to the process of breaking down your entire user base into smaller, distinct groups to have a clearer and better understanding of their profiles and pain points.

  • What are the benefits of user segmentation? Segmenting users helps product teams enhance buyer personas, tailor user experiences, increase engagement and adoption, prioritize your backlog, and improve customer retention.

  • What are the types of user segmentation? Familiarize yourself with the most common user segmentation types like demographics, firmographics, geographics, psychographics, technographics, behavioral, needs-based, and values-based.

What is user segmentation?

People count on intuitive and value-adding experiences to accomplish their goals, whether it’s to successfully get in shape or efficiently lead design sprints. User segmentation is one way to deliver those experiences.

Segmentation is the process of dividing your user base into distinct groups based on their shared characteristics, behaviors, needs, and preferences. When done right, it maximizes your opportunities to drive conversions, sales, and other business growth

What are the benefits of user segmentation?

Segmenting users contributes to several positive outcomes. Check out some of the benefits below—plus learn through examples how to easily integrate this practice into your team’s workflow.

1. Enhanced buyer personas

User segmentation lets you filter your data based on set criteria, revealing insights that refine your buyer personas—semi-fictional profiles of your ideal target audience that blend real data and hypothetical characteristics. 

For example, imagine you’ve built a user persona representing product managers (PMs) and divided it further into segments. After analyzing historical data from a segment comprising first-time millennial PMs, you’d update the product manager persona to

  • Broaden the age range to 30-50-year-olds to include younger PMs (the average product manager age in the US is 39 years old)

  • Reflect nuances in purchasing patterns to portray this segment’s penchant for testing new products, tools, and features after they’re released

🔥 Kick off user segmentation with Hotjar 

While segments feed user insights into personas, personas also serve as a starting point for the segmentation process. Here’s how to implement user segmentation with Hotjar’s product experience insights tools:

  1. Launch a user persona survey: use our ready-made survey template or create your own with AI to get to know who your users are, the reason they use your product, and their goals and blockers

  2. Create segments based on your personas: apply the relevant user segmentation model (we’ll talk more about this later in the guide and also in the next chapter)

  3. Improve user segmentation with Hotjar: go back into Hotjar and filter quantitative and qualitative data in Heatmaps, Recordings, Dashboards, Trends, and Funnels by segment to understand your users better

  4. Conduct user interviews: get deeper insights by talking directly to your target audience (you can source them from a pool of over 200,000 participants via Engage)

  5. Create segmented campaigns: feed the correct behavior insights into your main segments in your customer relationship management (CRM) system via the Hotjar + HubSpot integration

Watch the beginning of this video to know what questions to ask in your survey or interview

2. Tailored user experiences

Awareness of each segment helps you personalize experiences—and UX personalization focuses on delivering features or solutions that meet people’s needs in their specific context. 

For example, you can tailor your product’s UX to a segment’s desires and motivations by

  • Displaying different messaging to new and returning users, e.g. a fitness app flashing the sign-up screen to new users and the welcome screen to frequent visitors

  • Promoting relevant products to certain user segments, e.g. a budgeting app offering lifestyle-based credit cards to young professionals, aged 21–30

💡 Pro tip: tailoring UX also extends beyond the product. Your content and CX teams can use segmentation to improve customer experience by, say, sending follow-up emails and providing a live chat feature to cart abandoners to uncover checkout issues.

3. Increased user engagement and product adoption

Targeting by customer segment enables you to introduce context-appropriate tools and features to users, making them more likely to engage with and adopt your product. 

Engagement measures how often users interact with your product. So the higher the engagement, the better. Ultimately, you want these repeat visitors to reach adoption, the part where they start using your product to accomplish their goals. 

For example, you create segments based on engagement levels, labeling the lowest as ‘at risk’ and the highest as ‘power users’. You then watch recordings in Hotjar, filtering by segment to see whether these user groups encounter blockers to product adoption. You learn that

  • At-risk users ignore some dashboard elements, while power users explore most of them during active sessions, leading you to review and redesign your dashboard

  • The majority of at-risk users find a particular feature intimidating when using it for the first time, prompting you to create tooltips that explain how these features work

#Segment users by the actions they perform or experience during a session, and apply the segment as a filter in Recordings
Segment users by the actions they perform or experience during a session, and apply the segment as a filter in Recordings

Use Hotjar to uncover each user segment’s UX issues and address conversion blockers at once—preventing churn.

4. Optimized backlog prioritization

Collecting feedback from different segments allows you to spot common themes and patterns, weighing their impact against backlog items on your prioritization list.

Prioritization spotlights the features, updates, and fixes that matter to your users, so you can better allocate resources and achieve business goals effectively.

For example, prioritize problems that key user segments mention in their feedback, as in the following scenarios: 

  • Piled-up requests to fix a recurring issue where clicking a feature causes a digital banking app to close

  • Repeated comments on the need for seamless integration with third-party tools in a project management platform

🔥 How TechSmith used Hotjar to segment users based on their frustrations 

Conan Heiselt, UX designer at software company TechSmith, embedded a Hotjar survey on their site that appeared when users performed certain activities—such as clicking on specific elements or scrolling past a certain point. He used the on-site survey to ask them: what’s your biggest frustration with this page?

Heiselt collected responses and categorized them into roughly 15 general themes. By knowing what a particular user group wanted, which ranged from a search filter to more pricing transparency, he figured out which improvement areas to prioritize.

#Ask open-ended questions to gain more insights into each user segment
Ask open-ended questions to gain more insights into each user segment

5. Improved customer retention

Because segmentation helps deliver personalized UX, it also contributes to satisfaction and loyalty among user groups.

Customer satisfaction and loyalty result from a product fulfilling specific needs and in people sticking around, signaling a boost in your customer retention rate.

For example, when

  • Science-fiction film enthusiasts find tailored recommendations from their streaming service, which aligns with their interests and gives them a sense of exclusivity

  • Fashion-forward shoppers receive a curated feed from an online retailer, which showcases the latest fashion trends, exclusive previews, and early access to limited-edition collections 

💡 Pro tip: use Net Promoter Score® (NPS®) to measure and segment long-term customer happiness. Embed an NPS survey on your site or send an external survey link, and then segment users as promoters, passives, and detractors for better targeting.

Understand what keeps customers happy and apply your findings to boost retention

What are the different types of user segmentation? 

Select a user segmentation model to employ in your analysis. Here’s a list of your options (non-exhaustive) and their criteria for categorizing people:

  • Demographic segmentation: population-based characteristics like age, income, education level, job title, and marital status

  • Firmographic segmentation: organizational attributes like industry, company size, monthly revenue, employee count, and business location

  • Geographic segmentation: location-based segments like country, state, city, and town

  • Psychographic segmentation: psychological traits like goals, interests, attitudes, and values

  • Technographic segmentation: tool- or technology-based factors like hardware, software, browsers, and integrations used

  • Behavioral segmentation: behavior-related patterns like pages visited, purchasing habits, and frustration indicators (like rage clicks)

  • Needs-based segmentation: shared demands like preferences, pain points, problems, and motivations

  • Values-based segmentation: economic-based qualities like ethical consumption and sustainability commitments

Create meaningful segments to unlock personalized, unforgettable UX 

By creating meaningful segments and leveraging Hotjar’s tools, you can build a user experience that meets the needs and expectations of your diverse audience. Collect customer insights across demographics, firmographics, geographics, psychographics, technographics, behavioral patterns, needs, and values to deliver a product that resonates with each unique segment.

And as a final reminder: stay curious, for user segmentation is a long-term, ongoing commitment.

Harness Hotjar’s segmentation tools for deeper user insights

Understand how key user segments perceive and feel about your product—and deliver an experience they can’t resist.

FAQs about user segmentation