Segmentation and Personalisation: What's the Difference and How to Use Them?
For brands, the path to building meaningful messaging and engagement with customers is not an easy one. To achieve that, marketers will need a good understanding of the differences and relationship between user data, segmentation, and personalisation.
According to a recent study by CMO.com, 74% of consumers get frustrated when brand messaging has nothing to do with their interests. Yes, we all wish brands could see eye-to-eye with what’s going on in our lives. But for brands, the path to building meaningful messaging and engagement with customers is not an easy one. To achieve that, marketers will need a good understanding of the differences and relationships between user data, segmentation, and personalisation.
Segmentation vs Personalisation
Segmentation is looking at your user data and grouping users who exhibit similar behaviour or share similar attributes. Take, for example, behavior such as ‘users who browsed for Android phones on your site/ app’, ‘users who shopped for a handbag’, ‘users who browsed Android phones and shopped a handbag’, things like that. The same extends to attributes like users owning a particular model of a smartphone, users residing in a given city, and such.
Personalisation, on the other hand, is building a ‘first-person’ perspective to interactions with your users focused mostly on data about user behavior.
Look at the push notification on your left, for example. It is a case of segmentation and not necessarily personalisation. The push campaign targets users who have 'played' or 'listened' to the artist Najim Arshad in the past.
Now, look at the push notification on your right – a simple example of a push notification with personalisation. Calling out the user’s first name, Sameer gives your message a ‘First-person’ perspective.
Segmentation first, personalisation next
Now that we understand the differences between segmentation and personalisation, let’s see how we can use them wisely to deliver personalised experiences to users.
Adding users’ first name in a notification or email, like in the example above, is the first step towards personalisation. But that only shows that you don’t know anything about the user, other than his first name
What drives the point home (and purchase and revenue); is first creating relevant segments and personalising your messaging to users within the segment. Only then, you have something that says, “You know your users, you understand them and that you care for them.”
As seen in the above diagram, the depth of personalised experiences depends on user data (acting as a base), creating segments out of it, and personalizing your messaging, giving it a first-person perspective.
Understanding the role of segmentation & personalisation with an example.
Let’s now look at a few examples of brands that are getting the segmentation and personalisation steps right for deeper personalised experiences.
Above, is an example of how a leading payment and mobile banking app, segments its users before sending a notification. In this case, the app is encouraging prepaid mobile users to recharge their mobile currency via a push notification.
The segmentation is a blend of different categories of data like:
‘User Behavior’ Recharge_successful in the last 15 days users who have completed a recharge with ‘User Attributes’: Prepaid user and ‘User properties’ HSBC Bank. Excluding custom segment: ‘Prepaid users’ in the last 14 days. Also, notice the first-person personalisation [First_Name] Peter in the push notification as well.
The result is a higher degree of relevance and personal nature of the message to the users, increasing their tendency to act on the message.
How brands are winning with segmentation and personalisation.
Let’s look at the example of SIVVI.COM. - a leading e-commerce store segments the users and personalizes the notifications.
As seen, in the image, using segmentation tags like [Product Browsed], SIVVI.COM can target users who browsed Nike sneakers and Adidas jerseys. Personalisation, on the other hand, is done using tags like [First Name], which inserts the user’s first name, i.e., George. Such personalized campaigns engage up to 15% of users – a significantly high number when compared to non-personalized or segmented campaigns.
Here’s an example where Gaana app - a leading music streaming service uses segmentation to deliver personalised music listening experience to its 100 million+ users.
As seen, Gaana uses segmentation to target New users and personalisation to address them by their First Name. The notifications nudge new app users towards a premium subscription. Gaana witnessed an uplift of 120% in premium subscriptions to their service along with a 10% increase in the number of songs played on their app. 10% may not seem much, but with a userbase of 100 million+, it is a significant chunk of users who were engaged on the app.
Here’s another example from SIVVI.COM, where they send dynamically personalized emails showcasing items browsed but not purchased. The email, again, is an excellent example of segmentation (users who browsed a category but didn’t buy) and personalisation (items the users browsed like the Adidas shoes). These emails typically help recover up to 10% of abandoning users contributing to an increase in sales.
A layered approach for segmentation and personalisation is the key to driving deep-level personalisation for your brand. Skipping or altering the order of either of the steps may not get your brand the expected results or outcome from marketing automation.