{"id":110491,"date":"2025-04-30T22:24:04","date_gmt":"2025-05-01T05:24:04","guid":{"rendered":"https:\/\/thegood.com\/?post_type=insights&p=110491"},"modified":"2025-07-09T08:36:56","modified_gmt":"2025-07-09T15:36:56","slug":"user-segments","status":"publish","type":"insights","link":"https:\/\/thegood.com\/insights\/user-segments\/","title":{"rendered":"How to Identify Your Most Valuable User Segments and Prioritize Accordingly"},"content":{"rendered":"\n

Have you ever heard of the Pareto Principle<\/a>? Even if the name doesn\u2019t ring a bell, you\u2019re likely familiar with the premise that 80% of revenue comes from 20% of customers.<\/p>\n\n\n\n

Despite this being a proven economic model, companies are rarely focusing their effort on that 20%.<\/p>\n\n\n\n

It\u2019s not because they don\u2019t want to; it\u2019s because it is easy to get wrapped up in not losing a single sale, to the point that you are spreading yourself too thin.<\/p>\n\n\n\n

If you focus your energy and product improvements on the highest-value user segment, you will see greater returns for less work.<\/p>\n\n\n\n

In this article, we\u2019re sharing the study we recently ran for a client that helped us identify their most valuable user segments and prioritize improvements to meet their needs.<\/p>\n\n\n\n

What are user segments?<\/h2>\n\n\n\n

User segments are groups within a customer base who share similar characteristics, behaviors, or values.<\/p>\n\n\n\n

They are created with user segmentation, which researches those commonalities and divides your audience into distinct groups. You can then tailor experiences, personalize messaging, and focus optimization efforts on their specific needs.<\/p>\n\n\n\n

Common types of user segments<\/h2>\n\n\n\n

User segments can be divided based on different traits. The type of segmentation you use will vary based on your use case and goals. Here is a quick overview of common user segments.<\/p>\n\n\n\n

Segmentation Type<\/strong><\/td>Description<\/strong><\/td>Example Use Case<\/strong><\/td><\/tr>
Demographic<\/td>Segments users by age, gender, income, education, etc.<\/td>Targeting campaigns for specific roles<\/td><\/tr>
Firmographic<\/td>Segments by company size, industry, revenue, or location<\/td>Tailoring features for SMBs vs. enterprise<\/td><\/tr>
Behavioral<\/td>Based on how users interact with your product, such as product usage, feature adoption, or login frequency<\/td>Identifying power users or at-risk users<\/td><\/tr>
Technographic<\/td>Segments by technology stack, device, browser, or OS<\/td>Prioritizing integrations or support<\/td><\/tr>
Needs-Based<\/td>Segments by specific problems or needs<\/td>Customizing messaging for value drivers<\/td><\/tr>
Value-Based<\/td>Groups by economic value (annual recurring revenue, lifetime value, subscription tier)<\/td>Prioritizing high-revenue customers<\/td><\/tr>
Lifecycle Stage<\/td>Segments by user journey (trial, active, churn risk, etc.)<\/td>Triggering onboarding or win-back flows<\/td><\/tr>
RFM (Recency, Frequency, Monetary)<\/td>Groups based on most recent activity, engagement frequency, and spend<\/td>Identifying loyal or dormant users<\/td><\/tr>
Acquisition<\/td>Based on the marketing channel or campaign source<\/td>Tailor messaging or personalize the experience<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Why companies optimize for the wrong segments<\/h2>\n\n\n\n

When we run prioritization exercises, one of the most common mistakes we see is companies focused on segments of users based on volume. If the segment has more users, they automatically believe it deserves more attention.<\/p>\n\n\n\n

This reflects one of the three common prioritization mistakes:<\/p>\n\n\n\n

    \n
  1. Volume bias<\/strong>: Prioritizing segments with the most users rather than the most value<\/li>\n\n\n\n
  2. Squeaky wheel focus<\/strong>: Optimizing for the users who complain the loudest<\/li>\n\n\n\n
  3. Recency fallacy<\/strong>: Focusing on the latest acquisition channel or user cohort without evaluating their actual value<\/li>\n<\/ol>\n\n\n\n

    The uncomfortable truth is that your most valuable segments may not be your largest, your loudest, or your newest.<\/p>\n\n\n\n