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Not all customers are equal. Some get enormous value from your product. Others churn after two weeks no matter what you do. Segmentation is the discipline of understanding those differences and using them to focus your product, marketing, and sales efforts on the customers most likely to succeed 🎯

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Why it matters

A product that tries to serve everyone usually serves no one particularly well. Segmentation forces clarity on who your product is really for - which shapes positioning, onboarding, pricing, support, and every other part of the go-to-market motion. It also prevents the trap of building for the loudest customer rather than the most valuable one.

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Common segmentation approaches

Firmographic (for B2B) - company size, industry, geography, revenue, tech stack. The starting point for most B2B segmentation. Easy to measure but doesn’t tell you much about fit. Demographic (for B2C) - age, location, income, occupation. Useful for broad targeting but often too blunt to drive product decisions. Behavioural - how customers actually use your product. Which features do they use? How often do they log in? How quickly did they activate? Behavioural segments are often the most predictive of retention and expansion. Needs-based - groups customers by the job they’re trying to do, regardless of who they are. Two companies with identical firmographics can have completely different needs. Combining segmentation with Jobs To Be Done produces the richest picture 💡 Technographic - what tools and platforms a customer uses. Particularly useful for integration-heavy products where tech stack is a strong predictor of fit.

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Ideal Customer Profile

Segmentation feeds into your Ideal Customer Profile (ICP) - a description of the customer type most likely to buy, activate, retain, and expand. The ICP isn’t who you want to sell to; it’s a portrait built from your best existing customers. Georgiana Laudi and Claire Suellentrop’s Forget The Funnel is built around this idea - start from your best customers, understand why they succeeded, and reverse-engineer your growth motion from there 🙌

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Segmentation and product

Segmentation isn’t just a marketing exercise. When product teams understand which segments get the most value, they can prioritise features that deepen that value rather than building for the median user. Lesson learned: the most useful segmentation I’ve seen wasn’t done by marketing - it was done by a PM who spent a week analysing which customers had never churned and working backwards to figure out what they had in common.