Expert Writer
June 4, 2025
User segmentation is a key concept that allows businesses (specifically in mobile/app and e-commerce) to deliver more value to their customers. When companies group their users based on what they do, what they like, and who they are, they can personalize their marketing and create satisfied customers. In this glossary entry, we delve deeper into the topic to understand user segmentation, why it is essential, and the best practices for doing it right.
User segmentation is dividing your audience into groups with common attributes, behaviors, tastes, and needs. This enables businesses to create highly targeted campaigns and enrich user engagement.
Where general market segments are considered, user segmentation focuses on tracking the behavior of the people already involved in the product. Creating user personas based on segmentation data helps companies grow and connect better with their audiences. This results in data-driven marketing tactics that appeal more to each segment, improving retention rates and increasing customer lifetime value (CLV).
There are many reasons why you need to segment your users, especially when you are in the highly competitive business of mobile or e-commerce:
If businesses can determine how users use an app or website, they can decide what features or products work best. Such insights into user behavior allow better decision-making and user flow adjustments.
Personalization is a must-have these days in the digital space. With user segmentation, you can deliver content, offers, and communication aligned with that specific group's needs. This leads users to satisfaction and translates into reduced churn.
A segmentation plan can optimize the efficiency of marketing efforts. By segmenting users in marketing automation platforms, messages, push notifications, and in-app prompts can be sent specifically tailored to each group, resulting in more clicks and conversions overall.
Recognizing and addressing individual user needs helps build stronger relationships. User segmentation allows businesses to form long-lasting relationships, which has a direct impact on customer retention and the enhancement of customer lifetime value.
User segmentation can take many forms, particularly for mobile apps and e-commerce companies. Here are some of the common types of segmentation and their uses.
Demographic segmentation divides people according to their demographic profile, such as age, gender, location, education, and income. An e-commerce shop could launch age-targeted campaigns, and a mobile app may personalize an in-app experience based on geographic preferences.
Behavioral segmentation aims to understand how people use a product or service. Key factors include frequency, feature usage, purchase history, and app navigation patterns. This kind of segmentation surfaces your power, lapsed, and churn-prone users so you can communicate with the right message to drive retention at the right moment.
Psychographic segmentation categorizes users according to lifestyle, interests, values, and personality characteristics. Once you understand the underlying psychological motivations, you can better create more personalised experiences and content that resonate more deeply on an emotional level.
Technographic segmentation categorizes users based on their favourite gadgets, operating systems, or tech savvy. This is particularly crucial in mobile app optimization. For example, a gaming app might need to track iOS versus Android users to deliver platform-specific promotions or updates.
Geographic segmentation enables the separation of users based on their geolocation, whether city, state, region, or country. E-commerce businesses tend to utilize this for seasonal and local campaign targeting. Mobile app makers can also use geo-targeting for in-app ads or location-specific notifications.
Segmentation around the phase where the user is in their journey (new user, active user, power user, lapsed user). This method allows companies to craft new-user onboarding experiences, re-engagement campaigns for dormant users, and loyalty benefits for power users.
Revenue-based segmentation involves grouping customers based on the amount of revenue or profit to be generated from them. Analyzing CLV enables companies to focus on high-value segments, thus providing them with the necessary strategy to increase retention, churn, and lifetime revenue.
User Segmentation works best when data-driven and tied to business objectives. Here are four essential steps to take.
Collect accurate and pertinent user data from all possible sources, such as sign-up forms, in-app activity tracking, website analytics, and customer relationship management (CRM) systems. This data is the basis of any user segmentation strategy. Be especially vigilant about ensuring the quality of your data.
Choose the criteria you believe best suit your business goals. These can be demographic, behavioural, or psychographic factors. A clear segmentation strategy, however, usually ties back to high-level marketing objectives, like growing customer lifetime value or decreasing churn.
Analyze the data and uncover trends with analytical tools. Then, cluster users according to those patterns, ensuring every cluster is valuable enough to work with separately. In conclusion, analytics tools can perform complex user behavior data analyses for you and assign users to specific segments.
Once you’ve created segments, you can set up automations and send campaigns with particular content and offers. Test different segments with A/B tests to know the performance of every campaign. This feedback loop improves your user segmentation work and helps develop new strategies.
User segmentation can dramatically boost engagement and retention in a mobile app, a SaaS platform, or an online store. Below are some real-world examples relevant to mobile apps.
A fitness app could classify new users based on fitness goals, such as weight loss, muscle gain, or overall wellness. Each segment would receive tailored lessons and workout programmes using content designed for their particular goals, keeping users returning for more.
A retail app can segment users into categories based on purchase history and browsing behavior. It then sends customized push notifications for sales or product updates in those categories. This segmenting approach has led to higher conversion rates and greater customer retention.
Mobile game makers frequently use user segmentation to detect inactive players and offer special promos and time-limited events to re-engage them. This strategy could be critical in lowering churn rates and returning lapsed users.
Subscription-based apps can offer special content or premium features to their most valuable users, based on how much they engage or spend. This is a smart way to recognize loyalty, boost long-term value, and keep the community feeling appreciated and connected.
Ensuring the user segmentation stays valuable and leads to a real outcome is a continuous tuning process. Here are a few tips to keep in mind.
Users' behavior, preferences, and demographics can also evolve. Active data-driven marketing and segment review will ensure plans aren’t too detached from your audience's reality. Frequent refreshes are also necessary for personalization precision.
Data accuracy is essential for effective segmentation. Enforce strong data governance regimes and user behavior analysis tracking utilities to prevent segmentation mistakes, which inevitably result in an irrelevant campaign.
Every segmentation strategy should contribute to broader business goals — enhancing customer retention, increasing CLV, or driving down churn. Attuning segmentation projects to these pursuits allows resources to be focused effectively and campaigns to be measured.
A/B testing is a great way to improve user segmentation. Test different marketing strategies on segments, measure outcomes, and optimize campaigns based on the results. This iterative approach helps confirm what resonates with your audience and what doesn’t.
Personalization is a primary advantage of user segmentation, so use it. Leverage what you learn about the different segments to create messages, offers, and experiences that feel targeted to each user. Customized engagement drives satisfaction, loyalty, and conversions.
For companies looking for a more powerful and intuitive marketing solution, Reteno offers a comprehensive platform built for segmentation and omnichannel customer retention. Designed with data-driven marketing in mind, Reteno empowers you to:
Check out Reteno’s documentation on segments for detailed guidance and best practices.
In today’s personalized experiences and data-driven strategies, user segmentation isn’t just a nice-to-have — it’s essential. Grouping users based on shared traits or behaviors helps you run smarter campaigns, reduce churn, and keep your customers returning.
Tools like Reteno make this easier than ever, combining segmentation, automation, and analytics in one platform. Instead of juggling multiple systems, you get a streamlined way to understand your users and act on those insights.
When done right, segmentation supports bigger business goals — like boosting lifetime value (LTV), delivering better personalization, and improving overall user satisfaction. Whether you manage a mobile app, run an e-commerce store, or offer any digital product, user segmentation is one of those foundational strategies that drives sustainable, long-term growth.
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