Segmentation

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What is “Segmentation”?

“Analytics nirvana rule: never report a metric (even God’s favorite KPI) without segmenting it… There is no KPI so insightful all by itself, even in a trend or against a forecast, that can’t be made more impactful by applying segmentation.” — Avinash Kaushik, author of Web Analytics: An Hour a Day

Key Points:

• Segmentation means splitting data into well-defined subgroups to add additional Context and find unknown relationships.
• There are three ways to segment customer data:
  
  
  
  • Past Performance, which segments customers by past actions.
  • Demographics, which segments customers by external personal characteristics.
  • Psychographics, which segments customers by internal psychological characteristics.
• By segmenting your data, and trying different techniques, you’ll find hidden relationships worth exploring to improve your systems and business.

Questions for Consideration:

• What segmentation strategy makes the most sense for your measurements, given what you’re trying to achieve?
• How can you use segmentation to understand what different groups or people or processes are doing?

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