CONCEPTUALIZING AND IMPLEMENTING A SEGMENTATION STRATEGYMAU 2016Cody Ryan – Senior Manager, User Retention @

TODAY’S CONVERSATION ON SEGMENTATION1. Why it matters2. What data you should use3. Stages of segmentation4. Results of improved segmentation at Ibotta5. Key takeaways6. Q & A

SEGMENTATION OVERVIEW

WHY IT MATTERS ALL USERS ARE DIFFERENT! Users differ and are unique based on:

Demographics In-app behavior Needs Socio-economics Beliefs/perceptions Motivations

WHAT TO SEGMENT ONBehavior

Demographic

Acquisition Source

Predictive Modeling

User-level Data Warehousing

Proper data tracking is the cornerstone to segmentation

Segmentation Strategy

High ValueLow Use

High ValueMid Use

High ValueHigh Use

Mid ValueLow Use

Mid ValueMid Use

Mid ValueHigh Use

Low ValueLow Use

Low ValueMid Use

Low ValueHigh Use

IF YOU DO IT RIGHT… …segmentation drives User Acquisition (UA)

The easiest way to drive increased value and decreased churn, is to get the best possible users from your User Acquisition efforts

Coordinate with UA efforts to find these users. Identify them based on:

• Source• Demographics• Look-a-like

targeting• Behavioral

characteristics

Level of Usage

Valu

e of

a U

ser

PRACTICAL IMPLEMENTATION

STAGES OF SEGMENTATION

• Leverage more data to build predictive modeling and advanced statistical analysis

• Smaller, more-specific segments help stretch users to drive behavior that is incremental

• User-level segmentation

• Segment based on app usage (opens, purchases, etc.)

• Bucket users together into a manageable number of segments

• All users receive a uniform experience

• Useful for A/B testing general app features

None AdvancedIntermediateBasic

Example:

None Usage + Value Scoring Buckets

User-Level Usage + Value Scoring

K-means cluster analysis / Machine

Learning

1ST STAGE OF SEGMENTATION

Segmentation parameters should be aligned with business objectives For example: If ads are what make you money, segmentation should drive more ad

revenue The goal is to move users up and to the right

No Segmentati

on

High ValueLow Use

High ValueHigh Use

Low ValueLow Use

Low ValueHigh Use

High ValueLow Use

High ValueMid Use

High ValueHigh Use

Mid ValueLow Use

Mid ValueMid Use

Mid ValueHigh Use

Low ValueLow Use

Low ValueMid Use

Low ValueHigh Use

Level of Usage

Valu

e of

a U

ser

Valu

e of

a U

ser

Level of Usage

2ND STAGE IN SEGMENTATION Use cluster analysis to identify user groups that behave similarly Cluster analysis leverages statistics to allow users to group according to

pre-determined behavioral factors (purchase events, app feature usage, etc.)

2ND STAGE IN SEGMENTATIONShrinking

Growing

New User

Steady Eddy

Paid UA ReferralOrganic UA

Download

Data Collection Source Time to Register Demographics

Name Age Gender Zip/State iOS/Android

Actionable Targeting Data

User Behavior(Opens, app events, etc.)

Cus

tom

er S

uppo

rt &

Res

olut

ionData Collection

Engagement Level & Timing(How long does it take a user to cycle through funnel)

Data Collection

Frequency & Volume(Avg 1.2 per week, 2 wk/month)

ADVANCED SEGMENTATION – CONTINUOUS CYCLE

Data Collection Time App Events Ad Engagement Clicks Customer

Support contact Details for each

engagement or behavior

Source Source

Needs: 1) User Linked Across all

Platforms2) Dynamic

Learning/Updates 3) Data Warehouse 4) Personalization Tools

Actionable Targeting Data

App Events

Ad Interaction

Content

Likely to Churn

Other Variables

Likely to be Power

Likely to Refer

Source

Internal External

Communications

In AppEmail Push Ads URUA

Data (Predictive, Manipulation, etc)

ADVANCED SEGMENTATION – CONTINUOUS CYCLE

Data, Content & Communication

Triangle

RISKS AND LIMITATIONS Risks:

Users notice differences and get frustrated Segmentation is too complex to manage efficiently Law of Unintended Consequences

Limitations: Don’t house or collect all of the right data Can’t align across internal and external tools Don’t have the capabilities in-house to build

RESULTS FROM INCREASED SEGMENTATION

None Basic+72%

Increase in App Events

Basic Intermediate

+44%

Increase in App Events

KEY TAKEAWAYS TEST EVERY CHANGE IN SEGMENTATION!

Improve segmentation incrementally (and know what every improvement is worth)

Align segmentation with business goals

Let the data dictate your strategy

Build back end systems with future segmentation in mind

MAKE SEGMENTATION A CORE COMPETENCY!