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• Overcoming Fintech and Finserv’s Biggest Data Analytics Challenges

  13 septembre 2024, par Daniel Crough — Banking and Financial Services, Marketing, Security

  Data powers innovation in financial technology (fintech), from personalized banking services to advanced fraud detection systems. Industry leaders recognize the value of strong security measures and customer privacy. A recent survey highlights this focus, with 72% of finance Chief Risk Officers identifying cybersecurity as their primary concern.

  Beyond cybersecurity, fintech and financial services (finserv) companies are bogged down with massive amounts of data spread throughout disconnected systems. Between this, a complex regulatory landscape and an increasingly tech-savvy and sceptical consumer base, fintech and finserv companies have a lot on their plates.

  How can marketing teams get the information they need while staying focused on compliance and providing customer value ? 

  This article will examine strategies to address common challenges in the finserv and fintech industries. We’ll focus on using appropriate tools, following effective data management practices, and learning from traditional banks’ approaches to similar issues.

  What are the biggest fintech data analytics challenges, and how do they intersect with traditional banking ?

  Recent years have been tough for the fintech industry, especially after the pandemic. This period has brought new hurdles in data analysis and made existing ones more complex. As the market stabilises, both fintech and finserve companies must tackle these evolving data issues.

  Let’s examine some of the most significant data analytics challenges facing the fintech industry, starting with an issue that’s prevalent across the financial sector :

  1. Battling data silos

  In a recent survey by InterSystems, 54% of financial institution leaders said data silos are their biggest barrier to innovation, while 62% said removing silos is their priority data strategy for the next year.

  

  Data silos segregate data repositories across departments, products and other divisions. This is a major issue in traditional banking and something fintech companies should avoid inheriting at all costs.

  Siloed data makes it harder for decision-makers to view business performance with 360-degree clarity. It’s also expensive to maintain and operationalise and can evolve into privacy and data compliance issues if left unchecked.

  To avoid or remove data silos, develop a data governance framework and centralise your data repositories. Next, simplify your analytics stack into as few integrated tools as possible because complex tech stacks are one of the leading causes of data silos.

  Use an analytics system like Matomo that incorporates web analytics, marketing attribution and CRO testing into one toolkit.

  

  Matomo’s support plans help you implement a data system to meet the unique needs of your business and avoid issues like data silos. We also offer data warehouse exporting as a feature to bring all of your web analytics, customer data, support data, etc., into one centralised location.

  Try Matomo for free today, or contact our sales team to discuss support plans.

  2. Compliance with laws and regulations

  A survey by Alloy reveals that 93% of fintech companies find it difficult to meet compliance regulations. The cost of staying compliant tops their list of worries (23%), outranking even the financial hit from fraud (21%) – and this in a year marked by cyber threats.

  

  Data privacy laws are constantly changing, and the landscape varies across global regions, making adherence even more challenging for fintechs and traditional banks operating in multiple markets. 

  In the US market, companies grapple with regulations at both federal and state levels. Here are some of the state-level legislation coming into effect for 2024-2026 :

  • Oregon – Oregon Consumer Privacy Act (July 1, 2024)
  • Florida – Florida Digital Bill of Rights (July 1, 2024)
  • Texas – Texas Data Privacy and Security Act (July 1, 2024)
  • Montana – Montana Consumer Data Privacy Act (October 1, 2024)
  • Delaware – Delaware Personal Privacy Act (January 1, 2025)
  • Iowa – Iowa Consumer Data Protection Act (January 1, 2025)
  • New Jersey – SB 332 (January 15, 2025)
  • Tennessee – Tennessee Information Protection Act (July 1, 2025)
  • Indiana – Indiana Consumer Data Protection Act ( January 1, 2026)

  Other countries are also ramping up regional regulations. For instance, Canada has Quebec’s Act Respecting the Protection of Personal Information in the Private Sector and British Columbia’s Personal Information Protection Act (BC PIPA).

  Ignorance of country- or region-specific laws will not stop companies from suffering the consequences of violating them.

  The only answer is to invest in adherence and manage business growth accordingly. Ultimately, compliance is more affordable than non-compliance – not only in terms of the potential fines but also the potential risks to reputation, consumer trust and customer loyalty.

  This is an expensive lesson that fintech and traditional financial companies have had to learn together. GDPR regulators hit CaixaBank S.A, one of Spain’s largest banks, with multiple multi-million Euro fines, and Klarna Bank AB, a popular Swedish fintech company, for €720,000.

  To avoid similar fates, companies should :

  1. Build solid data systems
  2. Hire compliance experts
  3. Train their teams thoroughly
  4. Choose data analytics tools carefully

  Remember, even popular tools like Google Analytics aren’t automatically safe. Find out how Matomo helps you gather useful insights while sticking to rules like GDPR.

  3. Protecting against data security threats

  Cyber threats are increasing in volume and sophistication, with the financial sector becoming the most breached in 2023.

  

  The cybersecurity risks will only worsen, with WEF estimating annual cybercrime expenses of up to USD $10.5 trillion globally by 2025, up from USD $3 trillion in 2015.

  While technology brings new security solutions, it also amplifies existing risks and creates new ones. A 2024 McKinsey report warns that the risk of data breaches will continue to increase as the financial industry increasingly relies on third-party data tools and cloud computing services unless they simultaneously improve their security posture.

  The reality is that adopting a third-party data system without taking the proper precautions means adopting its security vulnerabilities.

  In 2023, the MOVEit data breach affected companies worldwide, including financial institutions using its file transfer system. One hack created a global data crisis, potentially affecting the customer data of every company using this one software product.

  The McKinsey report emphasises choosing tools wisely. Why ? Because when customer data is compromised, it’s your company that takes the heat, not the tool provider. As the report states :

  “Companies need reliable, insightful metrics and reporting (such as security compliance, risk metrics and vulnerability tracking) to prove to regulators the health of their security capabilities and to manage those capabilities.”

  Don’t put user or customer data in the hands of companies you can’t trust. Work with providers that care about security as much as you do. With Matomo, you own all of your data, ensuring it’s never used for unknown purposes.

  

  4. Protecting users’ privacy

  With security threats increasing, fintech companies and traditional banks must prioritise user privacy protection. Users are also increasingly aware of privacy threats and ready to walk away from companies that lose their trust.

  Cisco’s 2023 Data Privacy Benchmark Study reveals some eye-opening statistics :

  • 94% of companies said their customers wouldn’t buy from them if their data wasn’t protected, and 
  • 95% see privacy as a business necessity, not just a legal requirement.

  Modern financial companies must balance data collection and management with increasing privacy demands. This may sound contradictory for companies reliant on dated practices like third-party cookies, but they need to learn to thrive in a cookieless web as customers move to banks and service providers that have strong data ethics.

  This privacy protection journey starts with implementing web analytics ethically from the very first session.

  

  The most important elements of ethically-sound web analytics in fintech are :

  1. 100% data ownership : Make sure your data isn’t used in other ways by the tools that collect it.
  2. Respecting user privacy : Only collect the data you absolutely need to do your job and avoid personally identifiable information.
  3. Regulatory compliance : Stick with solutions built for compliance to stay out of legal trouble.
  4. Data transparency : Know how your tools use your data and let your customers know how you use it.

  Read our guide to ethical web analytics for more information.

  5. Comparing customer trust across industries 

  While fintech companies are making waves in the financial world, they’re still playing catch-up when it comes to earning customer trust. According to RFI Global, fintech has a consumer trust score of 5.8/10 in 2024, while traditional banking scores 7.6/10.

  

  This trust gap isn’t just about perception – it’s rooted in real issues :

  • Security breaches are making headlines more often.
  • Privacy regulations like GDPR are making consumers more aware of their rights.
  • Some fintech companies are struggling to handle fraud effectively.

  According to the UK’s Payment Systems Regulator, digital banking brands Monzo and Starling had some of the highest fraudulent activity rates in 2022. Yet, Monzo only reimbursed 6% of customers who reported suspicious transactions, compared to 70% for NatWest and 91% for Nationwide.

  So, what can fintech firms do to close this trust gap ?

  • Start with privacy-centric analytics from day one. This shows customers you value their privacy from the get-go.
  • Build and maintain a long-term reputation free of data leaks and privacy issues. One major breach can undo years of trust-building.
  • Learn from traditional banks when it comes to handling issues like fraudulent transactions, identity theft, and data breaches. Prompt, customer-friendly resolutions go a long way.
  • Remember : cutting-edge financial technology doesn’t make up for poor customer care. If your digital bank won’t refund customers who’ve fallen victim to credit card fraud, they’ll likely switch to a traditional bank that will.

  The fintech sector has made strides in innovation, but there’s still work to do in establishing trustworthiness. By focusing on robust security, transparent practices, and excellent customer service, fintech companies can bridge the trust gap and compete more effectively with traditional banks.

  6. Collecting quality data

  Adhering to data privacy regulations, protecting user data and implementing ethical analytics raises another challenge. How can companies do all of these things and still collect reliable, quality data ?

  Google’s answer is using predictive models, but this replaces real data with calculations and guesswork. The worst part is that Google Analytics doesn’t even let you use all of the data you collect in the first place. Instead, it uses something called data sampling once you pass certain thresholds.

  In practice, this means that Google Analytics uses a limited set of your data to calculate reports. We’ve discussed GA4 data sampling at length before, but there are two key problems for companies here :

  1. A sample size that’s too small won’t give you a full representation of your data.
  2. The more visitors that come to your site, the less accurate your reports will become.

  For high-growth companies, data sampling simply can’t keep up. Financial marketers widely recognise the shortcomings of big tech analytics providers. In fact, 80% of them say they’re concerned about data bias from major providers like Google and Meta affecting valuable insights.

  This is precisely why CRO:NYX Digital approached us after discovering Google Analytics wasn’t providing accurate campaign data. We set up an analytics system to suit the company’s needs and tested it alongside Google Analytics for multiple campaigns. In one instance, Google Analytics failed to register 6,837 users in a single day, approximately 9.8% of the total tracked by Matomo.

  In another instance, Google Analytics only tracked 600 visitors over 24 hours, while Matomo recorded nearly 71,000 visitors – an 11,700% discrepancy.

  

  Financial companies need a more reliable, privacy-centric alternative to Google Analytics that captures quality data without putting users at potential risk. This is why we built Matomo and why our customers love having total control and visibility of their data.

  Unlock the full power of fintech data analytics with Matomo

  Fintech companies face many data-related challenges, so compliant web analytics shouldn’t be one of them. 

  With Matomo, you get :

  • An all-in-one solution that handles traditional web analytics, behavioural analytics and more with strong integrations to minimise the likelihood of data siloing
  • Full compliance with GDPR, CCPA, PIPL and more
  • Complete ownership of your data to minimise cybersecurity risks caused by negligent third parties
  • An abundance of ways to protect customer privacy, like IP address anonymisation and respect for DoNotTrack settings
  • The ability to import data from Google Analytics and distance yourself from big tech
  • High-quality data that doesn’t rely on sampling
  • A tool built with financial analytics in mind

  Don’t let big tech companies limit the power of your data with sketchy privacy policies and counterintuitive systems like data sampling. 

  Start your Matomo free trial or request a demo to unlock the full power of fintech data analytics without putting your customers’ personal information at unnecessary risk.

• Google Optimize vs Matomo A/B Testing : Everything You Need to Know

  17 mars 2023, par Erin — Analytics Tips

  Google Optimize is a popular A/B testing tool marketers use to validate the performance of different marketing assets, website design elements and promotional offers. 

  But by September 2023, Google will sunset both free and paid versions of the Optimize product. 

  If you’re searching for an equally robust, but GDPR compliant, privacy-friendly alternative to Google Optimize, have a look at Matomo A/B Testing. 

  Integrated with our analytics platform and conversion rate optimisation (CRO) tools, Matomo allows you to run A/B and A/B/n tests without any usage caps or compromises in user privacy.

  Disclaimer : Please note that the information provided in this blog post is for general informational purposes only and is not intended to provide legal advice. Every situation is unique and requires a specific legal analysis. If you have any questions regarding the legal implications of any matter, please consult with your legal team or seek advice from a qualified legal professional.

  Google Optimize vs Matomo : Key Capabilities Compared 

  This guide shows how Matomo A/B testing stacks against Google Optimize in terms of features, reporting, integrations and pricing.

  Supported Platforms 

  Google Optimize supports experiments for dynamic websites and single-page mobile apps only. 

  If you want to run split tests in mobile apps, you’ll have to do so via Firebase — Google’s app development platform. It also has a free tier but paid usage-based subscription kicks in after your product(s) reaches a certain usage threshold. 

  Google Optimize also doesn’t support CRO experiments for web or desktop applications, email campaigns or paid ad campaigns.Matomo A/B Testing, in contrast, allows you to run experiments in virtually every channel. We have three installation options — using JavaScript, server-side technology, or our mobile tracking SDK. These allow you to run split tests in any type of web or mobile app (including games), a desktop product, or on your website. Also, you can do different email marketing tests (e.g., compare subject line variants).

  A/B Testing 

  A/B testing (split testing) is the core feature of both products. Marketers use A/B testing to determine which creative elements such as website microcopy, button placements and banner versions, resonate better with target audiences. 

  You can benchmark different versions against one another to determine which variation resonates more with users. Or you can test an A version against B, C, D and beyond. This is called A/B/n testing. 

  Both Matomo A/B testing and Google Optimize let you test either separate page elements or two completely different landing page designs, using redirect tests. You can show different variants to different user groups (aka apply targeting criteria). For example, activate tests only for certain device types, locations or types of on-site behaviour. 

  The advantage of Matomo is that we don’t limit the number of concurrent experiments you can run. With Google Optimize, you’re limited to 5 simultaneous experiments. Likewise, 

  Matomo lets you select an unlimited number of experiment objectives, whereas Google caps the maximum choice to 3 predefined options per experiment. 

  Objectives are criteria the underlying statistical model will use to determine the best-performing version. Typically, marketers use metrics such as page views, session duration, bounce rate or generated revenue as conversion goals. 

  

  Multivariate testing (MVT)

  Multivariate testing (MVT) allows you to “pack” several A/B tests into one active experiment. In other words : You create a stack of variants to determine which combination drives the best marketing outcomes. 

  For example, an MVT experiment can include five versions of a web page, where each has a different slogan, product image, call-to-action, etc. Visitors are then served with a different variation. The tracking code collects data on their behaviours and desired outcomes (objectives) and reports the results.

  MVT saves marketers time as it’s a great alternative to doing separate A/B tests for each variable. Both Matomo and Google Optimize support this feature. However, Google Optimize caps the number of possible combinations at 16, whereas Matomo has no limits. 

  Redirect Tests

  Redirect tests, also known as split URL tests, allow you to serve two entirely different web page versions to users and compare their performance. This option comes in handy when you’re redesigning your website or want to test a localised page version in a new market. 

  Also, redirect tests are a great way to validate the performance of bottom-of-the-funnel (BoFU) pages as a checkout page (for eCommerce websites), a pricing page (for SaaS apps) or a contact/booking form (for a B2B service businesses). 

  You can do split URL tests with Google Optimize and Matomo A/B Testing. 

  Experiment Design 

  Google Optimize provides a visual editor for making simple page changes to your website (e.g., changing button colour or adding several headline variations). You can then preview the changes before publishing an experiment. For more complex experiments (e.g., testing different page block sequences), you’ll have to codify experiments using custom JavaScript, HTML and CSS.

  In Matomo, all A/B tests are configured on the server-side (i.e., by editing your website’s raw HTML) or client-side via JavaScript. Afterwards, you use the Matomo interface to start or schedule an experiment, set objectives and view reports. 

  Experiment Configuration 

  Marketers know how complex customer journeys can be. Multiple factors — from location and device to time of the day and discount size — can impact your conversion rates. That’s why a great CRO app allows you to configure multiple tracking conditions. 

  Matomo A/B testing comes with granular controls. First of all, you can decide which percentage of total web visitors participate in any given experiment. By default, the number is set to 100%, but you can change it to any other option. 

  Likewise, you can change which percentage of traffic each variant gets in an experiment. For example, your original version can get 30% of traffic, while options A and B receive 40% each. We also allow users to specify custom parameters for experiment participation. You can only show your variants to people in specific geo-location or returning visitors only. 

  Finally, you can select any type of meaningful objective to evaluate each variant’s performance. With Matomo, you can either use standard website analytics metrics (e.g., total page views, bounce rate, CTR, visit direction, etc) or custom goals (e.g., form click, asset download, eCommerce order, etc). 

  In other words : You’re in charge of deciding on your campaign targeting criteria, duration and evaluation objectives.

  A free Google Optimize account comes with three main types of user targeting options : 

  • Geo-targeting at city, region, metro and country levels. 

  • Technology targeting  by browser, OS or device type, first-party cookie, etc. 
  • Behavioural targeting based on metrics like “time since first arrival” and “page referrer” (referral traffic source). 

  Users can also configure other types of tracking scenarios (for example to only serve tests to signed-in users), using condition-based rules. 

  Reporting 

  Both Matomo and Google Optimize use different statistical models to evaluate which variation performs best. 

  Matomo relies on statistical hypothesis testing, which we use to count unique visitors and report on conversion rates. We analyse all user data (with no data sampling applied), meaning you get accurate reporting, based on first-hand data, rather than deductions. For that reason, we ask users to avoid drawing conclusions before their experiment participation numbers reach a statistically significant result. Typically, we recommend running an experiment for at least several business cycles to get a comprehensive report. 

  Google Optimize, in turn, uses Bayesian inference — a statistical method, which relies on a random sample of users to compare the performance rates of each creative against one another. While a Bayesian model generates CRO reports faster and at a bigger scale, it’s based on inferences.

  Model developers need to have the necessary skills to translate subjective prior beliefs about the probability of a certain event into a mathematical formula. Since Google Optimize is a proprietary tool, you cannot audit the underlying model design and verify its accuracy. In other words, you trust that it was created with the right judgement. 

  In comparison, Matomo started as an open-source project, and our source code can be audited independently by anyone at any time. 

  Another reporting difference to mind is the reporting delays. Matomo Cloud generates A/B reports within 6 hours and in only 1 hour for Matomo On-Premise. Google Optimize, in turn, requires 12 hours from the first experiment setup to start reporting on results. 

  When you configure a test experiment and want to quickly verify that everything is set up correctly, this can be an inconvenience.

  User Privacy & GDPR Compliance 

  Google Optimize works in conjunction with Google Analytics, which isn’t GDPR compliant. 

  For all website traffic from the EU, you’re therefore obliged to show a cookie consent banner. The kicker, however, is that you can only show an Optimize experiment after the user gives consent to tracking. If the user doesn’t, they will only see an original page version. Considering that almost 40% of global consumers reject cookie consent banners, this can significantly affect your results.

  This renders Google Optimize mostly useless in the EU since it would only allow you to run tests with a fraction ( 60%) of EU traffic — and even less if you apply any extra targeting criteria. 

  In comparison, Matomo is fully GDPR compliant. Therefore, our users are legally exempt from displaying cookie-consent banners in most EU markets (with Germany and the UK being an exception). Since Matomo A/B testing is part of Matomo web analytics, you don’t have to worry about GDPR compliance or breaches in user privacy. 

  Digital Experience Intelligence 

  You can get comprehensive statistical data on variants’ performance with Google Optimize. But you don’t get further insights on why some tests are more successful than others. 

  Matomo enables you to collect more insights with two extra features :

  • User session recordings : Monitor how users behave on different page versions. Observe clicks, mouse movements, scrolls, page changes, and form interactions to better understand the users’ cumulative digital experience. 
  • Heatmaps : Determine which elements attract the most users’ attention to fine-tune your split tests. With a standard CRO tool, you only assume that a certain page element does matter for most users. A heatmap can help you determine for sure. 

  Both of these features are bundled into your Matomo Cloud subscription. 

  Integrations 

  Both Matomo and Google Optimize integrate with multiple other tools. 

  Google Optimize has native integrations with other products in the marketing family — GA, Google Ads, Google Tag Manager, Google BigQuery, Accelerated Mobile Pages (AMP), and Firebase. Separately, other popular marketing apps have created custom connectors for integrating Google Optimize data. 

  Matomo A/B Testing, in turn, can be combined with other web analytics and CRO features such as Funnels, Multi-Channel Attribution, Tag Manager, Form Analytics, Heatmaps, Session Recording, and more ! 

  You can also conveniently export your website analytics or CRO data using Matomo Analytics API to analyse it in another app. 

  Pricing 

  Google Optimize is a free tool but has usage caps. If you want to schedule more than 5 concurrent experiments or test more than 16 variants at once, you’ll have to upgrade to Optimize 360. Optimize 360 prices aren’t listed publicly but are said to be closer to six figures per year. 

  Matomo A/B Testing is available with every Cloud subscription (starting from €19) and Matomo On-Premise users can also get A/B Testing as a plugin (starting from €199/year). In each case, there are no caps or data limits. 

  Google Optimize vs Matomo A/B Testing : Comparison Table

  Features/capabilities	Google Optimize	Matomo A/B test
  Supported channels	Web	Web, mobile, email, digital campaigns
  A/B testing
  Multivariate testing (MVT)
  Split URL tests
  Web analytics integration	Native with UA/GA4	Native with Matomo You can also migrate historical UA (GA3) data to Matomo
  Audience segmentation	Basic	Advanced
  Geo-targeting
  Technology targeting
  Behavioural targeting	Basic	Advanced
  Reporting model	Bayesian analysis	Statistical hypothesis testing
  Report availability	Within 12 hours after setup	6 hours for Matomo Cloud 1 hour for Matomo On-Premise
  Heatmaps		Included with Matomo Cloud
  Session recordings		Included with Matomo Cloud
  GDPR compliance
  Support	Self-help desk on a free tier	Self-help guides, user forum, email
  Price	Free limited tier	From €19 for Cloud subscription From €199/year as plugin for On-Premise

  Final Thoughts : Who Benefits the Most From an A/B Testing Tool ?

  Split testing is an excellent method for validating various assumptions about your target customers. 

  With A/B testing tools you get a data-backed answer to research hypotheses such as “How different pricing affects purchases ?”, “What contact button placement generates more clicks ?”, “Which registration form performs best with new app subscribers ?” and more. 

  Such insights can be game-changing when you’re trying to improve your demand-generation efforts or conversion rates at the BoFu stage. But to get meaningful results from CRO tests, you need to select measurable, representative objectives.

  For example, split testing different pricing strategies for low-priced, frequently purchased products makes sense as you can run an experiment for a couple of weeks to get a statistically relevant sample. 

  But if you’re in a B2B SaaS product, where the average sales cycle takes weeks (or months) to finalise and things like “time-sensitive discounts” or “one-time promos” don’t really work, getting adequate CRO data will be harder. 

  To see tangible results from CRO, you’ll need to spend more time on test ideation than implementation. Your team needs to figure out : which elements to test, in what order, and why. 

  Effective CRO tests are designed for a specific part of the funnel and assume that you’re capable of effectively identifying and tracking conversions (goals) at the selected stage. This alone can be a complex task since not all customer journeys are alike. For SaaS websites, using a goal like “free trial account registration” can be a good starting point.

  A good test also produces a meaningful difference between the proposed variant and the original version. As Nima Yassini, Partner at Deloitte Digital, rightfully argues :

  “I see people experimenting with the goal of creating an uplift. There’s nothing wrong with that, but if you’re only looking to get wins you will be crushed when the first few tests fail. The industry average says that only one in five to seven tests win, so you need to be prepared to lose most of the time”.

  In many cases, CRO tests don’t provide the data you expected (e.g., people equally click the blue and green buttons). In this case, you need to start building your hypothesis from scratch. 

  At the same time, it’s easy to get caught up in optimising for “vanity metrics” — such that look good in the report, but don’t quite match your marketing objectives. For example, better email headline variations can improve your email open rates. But if users don’t proceed to engage with the email content (e.g. click-through to your website or use a provided discount code), your efforts are still falling short. 

  That’s why developing a baseline strategy is important before committing to an A/B testing tool. Google Optimize appealed to many users because it’s free and allows you to test your split test strategy cost-effectively. 

  With its upcoming depreciation, many marketers are very committed to a more expensive A/B tool (especially when they’re not fully sure about their CRO strategy and its results). 

  Matomo A/B testing is a cost-effective, GDPR-compliant alternative to Google Optimize with a low learning curve and extra competitive features. 

  Discover if Matomo A/B Testing is the ideal Google Optimize alternative for your organization with our free 21-day trial. No credit card required.

• 10 Customer Segments Examples and Their Benefits

  9 mai 2024, par Erin

  Now that companies can segment buyers, the days of mass marketing are behind us. Customer segmentation offers various benefits for marketing, content creation, sales, analytics teams and more. Without customer segmentation, your personalised marketing efforts may fall flat. 

  According to the Twilio 2023 state of personalisation report, 69% of business leaders have increased their investment in personalisation. There’s a key reason for this — customer retention and loyalty directly benefit from personalisation. In fact, 62% of businesses have cited improved customer retention due to personalisation efforts. The numbers don’t lie. 

  Keep reading to learn how customer segments can help you fine-tune your personalised marketing campaigns. This article will give you a better understanding of customer segmentation and real-world customer segment examples. You’ll leave with the knowledge to empower your marketing strategies with effective customer segmentation. 

  What are customer segments ?

  Customer segments are distinct groups of people or organisations with similar characteristics, needs and behaviours. Like different species of plants in a garden, each customer segment has specific needs and care requirements. Customer segments are useful for tailoring personalised marketing campaigns for specific groups.

  Personalised marketing has been shown to have significant benefits — with 56% of consumers saying that a personalised experience would make them become repeat buyers. 

  Successful marketing teams typically focus on these types of customer segmentation :

  

  1. Geographic segmentation : groups buyers based on their physical location — country, city, region or climate — and language.
  2. Purchase history segmentation : categorises buyers based on their purchasing habits — how often they make purchases — and allows brands to distinguish between frequent, occasional and one-time buyers. 
  3. Product-based segmentation : groups buyers according to the products they prefer or end up purchasing. 
  4. Customer lifecycle segmentation : segments buyers based on where they are in the customer journey. Examples include new, repeat and lapsed buyers. This segmentation category is also useful for understanding the behaviour of loyal buyers and those at risk of churning. 
  5. Technographic segmentation : focuses on buyers’ technology preferences, including device type, browser type, and operating system. 
  6. Channel preference segmentation : helps us understand why buyers prefer to purchase via specific channels — whether online channels, physical stores or a combination of both. 
  7. Value-based segmentation : categorises buyers based on their average purchase value and sensitivity to pricing, for example. This type of segmentation can provide insights into the behaviours of price-conscious buyers and those willing to pay premium prices. 

  Customer segmentation vs. market segmentation

  Customer segmentation and market segmentation are related concepts, but they refer to different aspects of the segmentation process in marketing. 

  Market segmentation is the broader process of dividing the overall market into homogeneous groups. Market segmentation helps marketers identify different groups based on their characteristics or needs. These market segments make it easier for businesses to connect with new buyers by offering relevant products or new features. 

  On the other hand, customer segmentation is used to help you dig deep into the behaviour and preferences of your current customer base. Marketers use customer segmentation insights to create buyer personas. Buyer personas are essential for ensuring your personalised marketing efforts are relevant to the target audience. 

  10 customer segments examples

  Now that you better understand different customer segmentation categories, we’ll provide real-world examples of how customer segmentation can be applied. You’ll be able to draw a direct connection between the segmentation category or categories each example falls under.

  One thing to note is that you’ll want to consider privacy and compliance when you are considering collecting and analysing types of data such as gender, age, income level, profession or personal interests. Instead, you can focus on these privacy-friendly, ethical customer segmentation types :

  1. Geographic location (category : geographic segmentation)

  The North Face is an outdoor apparel and equipment company that relies on geographic segmentation to tailor its products toward buyers in specific regions and climates. 

  For instance, they’ll send targeted advertisements for insulated jackets and snow gear to buyers in colder climates. For folks in seasonal climates, The North Face may send personalised ads for snow gear in winter and ads for hiking or swimming gear in summer. 

  The North Face could also use geographic segmentation to determine buyers’ needs based on location. They can use this information to send targeted ads to specific customer segments during peak ski months to maximise profits.

  2. Preferred language (category : geographic segmentation)

  Your marketing approach will likely differ based on where your customers are and the language they speak. So, with that in mind, language may be another crucial variable you can introduce when identifying your target customers. 

  Language-based segmentation becomes even more important when one of your main business objectives is to expand into new markets and target international customers — especially now that global reach is made possible through digital channels. 

  Coca-Cola’s “Share a Coke” is a multi-national campaign with personalised cans and bottles featuring popular names from countries around the globe. It’s just one example of targeting customers based on language.

  3. Repeat users and loyal customers (category : customer lifecycle segmentation)

  Sephora, a large beauty supply company, is well-known for its Beauty Insider loyalty program. 

  It segments customers based on their purchase history and preferences and rewards their loyalty with gifts, discounts, exclusive offers and free samples. And since customers receive personalised product recommendations and other perks, it incentivises them to remain members of the Beauty Insider program — adding a boost to customer loyalty.

  By creating a memorable customer experience for this segment of their customer base, staying on top of beauty trends and listening to feedback, Sephora is able to keep buyers coming back.

  

  4. New customers (category : customer lifecycle segmentation)

  Subscription services use customer lifecycle segmentation to offer special promotions and trials for new customers. 

  HBO Max is a great example of a real company that excels at this strategy : 

  They offer 40% savings on an annual ad-free plan, which targets new customers who may be apprehensive about the added monthly cost of a recurring subscription.

  This marketing strategy prioritises fostering long-term customer relationships with new buyers to avoid high churn rates. 

  5. Cart abandonment (category : purchase history segmentation)

  With a rate of 85% among US-based mobile users, cart abandonment is a huge issue for ecommerce businesses. One way to deal with this is to segment inactive customers and cart abandoners — those who showed interest by adding products to their cart but haven’t converted yet — and send targeted emails to remind them about their abandoned carts.

  E-commerce companies like Ipsy, for example, track users who have added items to their cart but haven’t followed through on the purchase. The company’s messaging often contains incentives — like free shipping or a limited-time discount — to encourage passive users to return to their carts. 

  Research has found that cart abandonment emails with a coupon code have a high 44.37% average open rate. 

  6. Website activity (category : technographic segmentation)

  It’s also possible to segment customers based on website activity. Now, keep in mind that this is a relatively broad approach ; it covers every interaction that may occur while the customer is browsing your website. As such, it leaves room for many different types of segmentation. 

  For instance, you can segment your audience based on the pages they visited, the elements they interacted with — like CTAs and forms — how long they stayed on each page and whether they added products to their cart. 

  Matomo’s Event Tracking can provide additional context to each website visit and tell you more about the specific interactions that occur, making it particularly useful for segmenting customers based on how they spend their time on your website. 

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  Amazon segments its customers based on browsing behaviour — recently viewed products and categories, among other things — which, in turn, allows them to improve the customer’s experience and drive sales.

  7. Traffic source (category : channel segmentation) 

  You can also segment your audience based on traffic sources. For example, you can determine if your website visitors arrived through Google and other search engines, email newsletters, social media platforms or referrals. 

  In other words, you’ll create specific audience segments based on the original source. Matomo’s Acquisition feature can provide insights into five different types of traffic sources — search engines, social media, external websites, direct traffic and campaigns — to help you understand how users enter your website.

  You may find that most visitors arrive at your website through social media ads or predominantly discover your brand through search engines. Either way, by learning where they’re coming from, you’ll be able to determine which conversion paths you should prioritise and optimise further. 

  8. Device type (category : technographic segmentation)

  Device type is customer segmentation based on the devices that potential customers may use to access your website and view your content. 

  It’s worth noting that, on a global level, most people (96%) use mobile devices — primarily smartphones — for internet access. So, there’s a high chance that most of your website visitors are coming from mobile devices, too. 

  However, it’s best not to assume anything. Matomo can detect the operating system and the type of device — desktop, mobile device, tablet, console or TV, for example. 

  By introducing the device type variable into your customer segmentation efforts, you’ll be able to determine if there’s a preference for mobile or desktop devices. In return, you’ll have a better idea of how to optimise your website — and whether you should consider developing an app to meet the needs of mobile users.

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  9. Browser type (category : technographic segmentation)

  Besides devices, another type of segmentation that belongs to the technographic category and can provide valuable insights is browser-related. In this case, you’re tracking the internet browser your customers use. 

  Many browser types are available — including Google Chrome, Microsoft Edge, Safari, Firefox and Brave — and each may display your website and other content differently. 

  So, keeping track of your customers’ preferred choices is important. Otherwise, you won’t be able to fully understand their online experience — or ensure that these browsers are displaying your content properly. 

  

  10. Ecommerce activity (category : purchase history, value based, channel or product based segmentation) 

  Similar to website activity, looking at ecommerce activity can tell your sales teams more about which pages the customer has seen and how they have interacted with them. 

  With Matomo’s Ecommerce Tracking, you’ll be able to keep an eye on customers’ on-site behaviours, conversion rates, cart abandonment, purchased products and transaction data — including total revenue and average order value.

  Considering that the focus is on sales channels — such as your online store — this approach to customer segmentation can help you improve the sales experience and increase profitability. 

  Start implementing these customer segments examples

  With ever-evolving demographics and rapid technological advancements, customer segmentation is increasingly complex. The tips and real-world examples in this article break down and simplify customer segmentation so that you can adapt to your customer base. 

  Customer segmentation lays the groundwork for your personalised marketing campaigns to take off. By understanding your users better, you can effectively tailor each campaign to different segments. 

  If you’re ready to see how Matomo can elevate your personalised marketing campaigns, try it for free for 21 days. No credit card required.

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