How segmentation helps you better personalize your UX ?

You thought your brother’s wedding would be just fine…  But you ended up at the kids’ table (and you’re 35!). How could he do this to you? Did he hate you? Does he think it was the best fit? 

You didn’t spend a nice evening, and here is how he could have prevented it: 

• Better analyze his guests before seating people 
• Try to match their table experience with their preferences (yes, you can’t talk about politics with 12-years-old kids)

Does it slightly remember you of a well-known marketing process? Yes! We’re talking about segmentation. 

Today, we will see how LifeTime Value (a conversion metric) can help you segment your audience so that you can better personalize their User Experience on Ads, your website, social media…
Ready to leverage your segmentation efforts and make the most of your UX personalization options? Keep reading!

How to use Customer Lifetime Value to segment your audience?

What is LTV? 

LTV, CLV or Lifetime Value (call it what you want) is a useful KPI (key performance objective) that helps you calculate the projected net margin your customer generates over a defined period of time.
To make it short, when most marketers are looking for immediate results, it can be more beneficial to think long-term. That’s precisely where LTV intervenes to boost the profitability of your campaigns. 

The 3 main benefits of using the indicator of Lifetime Value:

1. Focus on improving your customers’ retention

Fact: a 5% increase in your customer retention leads to a 25% increase in profit.

2. Better segment your audience to focus your actions where you will generate the most revenue 

Fact: existing customers are likely to spend 67% more than newly acquired customers.

3. Create long-lasting relationships to maximize your long-term profitability

Fact: do you know the lindy effect? It’s a law that states that an unperishable thing that existed for an amount of time is likely to exist for the same amount of time in the future.
This law can help you predict how long your customers will continue to buy from your company. Interesting, isn’t it?

From Lifetime Value to segmentation

You’ve measured LTV, and now what? 

By calculating your Customer Lifetime Value, you can learn a lot about your customers’ purchasing behaviour (complex, habitual, straight rebuy…). It will help you segment your customers into categories to distribute them the offer they want, where they want (through their preferred channel). 
The objective is to create segments of customers with homogeneous LTVs to prioritize the segments with higher LTV.
Careful: make sure that you don’t neglect your customers whose LTV is lower. You should continue to offer value but adapt it to their predicted LTV.  

Segmenting your audience thanks to LTV will lead you to the following questions: 

• How can we increase the amount customers with high LTV spend each time? 
• How can we make customers with medium LTV spend more often? 
• How can we encourage customers with low LTV to come back for longer and increase their LTV?

The answers lie in UX personalization. 

UX personalization or how to leverage your audience segmentation?

Why UX personalization matters?

80% of frequent shoppers buy only from brands that offer a personalized experience. But that’s not it. According to Salesforce, 66% of your customers expect you to understand their needs and expectations. 
UX personalization isn’t an option anymore (not only to retain but to attract customers).  

By personalizing your website, ads, or social media content, you make sure that: 

• You offer the right message at the right time for the right prospect
• You don’t create too many distractions in the purchase process
• You send the message at the right moment of your visitor’s buyer journey 
• You take into consideration your customer's LTV

You will be able to recommend products, offer products that are more likely to answer your customer need, and in the end: increase your Customer Lifetime Value.

How to optimize your UX personalization? 

Now that you know how crucial is UX personalization for your business, you may want to know how to proceed. 3 guidelines to leverage your segmentation and optimize your UX personalization: 

• Treat your “High-LTV customers” like VIPs

Now that you know which segment is likely to be the most profitable, you should consider creating a tailor-made offer to maximize their experience. According to Adobe, the top 1% of your customers spends 30 x more than an average customer.

• Encourage high-value behaviour

Thanks to the identification of High LTV segments, you should try to determine what in their experience is most important? Why is their LTV high? 

It will allow you to encourage customers whose LTV is increasing. 

• Launch A/B testing

To know how your UX personalization impacts your visitors' behaviour, you can run A/B testing. It will allow you to monitor the impact of your UX modifications to see whether or not it has a positive impact on customers' willingness to buy from your brand.

Personalize your UX thanks to Google Optimize 

Among the tools that can help you better optimize your UX, Google Optimize stands out from the crowd. It’s a Google-free tool (as the name suggests) that enables you to launch website experiments, to optimize your visitors' conversions.

Thus, it’s an interesting tool that allows you to: 

• Test optimization hypotheses by running tests on your website 
• Facilitates the import of Google Ads data to match the segments with a unique experience
• Create a personalized experience for your visitors (on the paid version of Google Optimize)

Tips: you can now plug Google Optimize directly on GA4, to help you along with your personalization phase. It allows you to save time (import your Google Ads data directly on Google Optimize): highly recommended by our Conversion team! 

How to use Google Optimize?

First, this is what Google Optimize looks like:

Source: https://marketingplatform.google.com/intl/en_uk/about/optimize/  

Here are the steps to use Google Optimize: 

1. Connect your website, and Analytics to Google Optimize and create variants of your website pages. On Google Optimize, the editing of variants is easy, meaning that you don’t have to recode your website each time. 
2.  Start running some tests: A/B tests, multivariate tests, redirect tests,... (Learn more about the different testing options).
3. Time to personalize! Now that you identified the variants that work best, you can offer a different experience for your different customers’ segments. 

Don’t forget to monitor the outcome of your personalization tests, and to actualize your segments so that you are always providing good content to good customers. 

Key takeaways of UX personalization 

Let’s make a quick recap: 

• Calculating your customers’ LTV help you segment your customers accordingly to this indicator
• You can leverage your segmentation by personalizing your customers' experience consequently
• Try Google Optimize to personalize their experience and increase their LTV.

If you want more information about Customer experience personalization, don’t hesitate to contact our Conversion experts.