Growth and conversions are not just about the right messaging.
It’s about segmentation and targeted messaging.
Here’s a 3-step framework for identifying and pursuing meaningful, viable, and highly profitable customer segments:
1. Get data, a lot of data
Collect data from past and current customers.
Why past and current? Because we want to identify trends over time.
If we want to uncover nuance and identify who is more likely to become a paying customer, and who is not – we need to have enough data to work with.
That’s why the more data you collect and have, the better.
What identifying characteristics tie different customer groups together?
What attributes help us to form larger segments?
2. Performance
Once we have segments, look at their performance.
→ conversion rates
→ feature adoption rates
→ lifetime value
→ churn
Compare the data with average values across customers.
What segments are above (and below) average?
3. Potential
Assess the potential of pursuing the above-average segments.
Look at this data:
→ CAC
→ viability of acquisition channels
→ total addressable market
→ what competitors are you going against
This 3 step framework is not only useful for driving growth.
Understanding our customers at a deeper level helps us to deliver more value across the entire marketing and product experience.