In the fast paced and competitive world of mobile marketing, app marketers need to know how to create effective marketing strategies and campaigns to drive conversions and user retention. User segmentation is a fundamental strategy in app marketing that helps brands maximize the effectiveness of their marketing efforts. Segmentation improves user engagement and ultimately drives business growth. It allows marketers to treat each group of users as unique individuals with specific needs and preferences, leading to more successful marketing campaigns and a better user experience.

The segmentation, targeting, and positioning (STP) marketing model is a tool that can help businesses segment their audience, target their market, and position their product or service in ways that boost conversions. Here, we break down how app marketers can apply the STP marketing model to their strategies in order to maximize conversions and increase loyalty within their user base. 

What is the STP Marketing Model

The STP marketing model stands for Segmentation, Targeting, and Positioning. It is a strategic framework used by businesses to develop effective marketing strategies and make informed decisions about how to market their products or services. The digital advertising and marketing sector alone was estimated at some $531 billion in 2022 and is expected to reach a staggering $1.5 trillion by 2030. Such a massive market brings fierce competition, which means that marketing teams need to get their tactics right.

The STP model helps marketers identify their most valuable types of users, and then develop marketing messages that are specifically tailored to them. This allows brands to engage with a target group more effectively, personalize their messaging, and ultimately drive a higher ROI. 

Segmentation

This is the first step in the STP model. It involves dividing a large market into smaller, more focused groups or segments. The goal is to identify groups of consumers who share similar characteristics, needs, and preferences. Segmentation can be based on various factors, including demographics (age, gender, income), psychographics (lifestyles, values), behavior (usage patterns, brand loyalty), and geographic location. The purpose of segmentation is to tailor marketing efforts to each segment's specific characteristics.

Targeting

The next step is to select one or more specific segments to target. Not all segments may be equally attractive or profitable for a business. Targeting involves evaluating the potential of each segment based on factors like size, growth potential, profitability, and compatibility with the company's resources and capabilities. By choosing the most promising segments, a business can focus its marketing efforts and resources more effectively.

Positioning

Positioning is about how a brand wants its product or service to be perceived by the target market in comparison to competitors. This step is where mobile marketers can craft their unique value proposition and create a distinct image in the minds of consumers. Positioning strategies often involve emphasizing specific product attributes, benefits, or qualities that resonate with the chosen target segment. Effective positioning helps a business differentiate itself from competitors and build a strong brand identity.

By following the STP model, apps can optimize their marketing efforts and enhance user engagement. They can also increase the likelihood of success in the ever-competitive mobile industry. It helps brands align their offerings with the needs and preferences of specific customer groups, ultimately leading to more effective marketing campaigns and better customer satisfaction.

Importance of Using the STP Marketing Model 

The purpose of STP marketing is to put the customer front and center in a company’s marketing strategy. By leveraging segmentation, targeting, and positioning, marketing campaigns can steer away from being too generic and ensure that marketing efforts resonate with the target audience. Using the STP model allows marketers to create highly personalized campaigns, streamline their marketing funnel, and reduce overall marketing costs while increasing conversions.

Hyper-personalized Marketing 

It would be impossible for brands to target every person online while also driving success. By using the STP model, marketers can narrow down who they are speaking to. The segmentation step ensures brands separate the different groups in their audience and customize messaging to each group’s needs. This gives marketers the freedom to write hyper-specific messaging that wouldn’t be possible with a huge, general audience.

Personalizing marketing communication also leads to a better relationship between the user and the app. Brands that personalize the user experience see an average increase of 20% in sales. Making the user feel important and sought after can greatly improve customer loyalty and retention. Acknowledging that the user is more than another member of an email database can go a long way when it comes to re-engagement. 

Streamlined Marketing Funnel

When app marketers take the time to segment their audience, it allows them to focus only on the channels that the target audience uses. Instead of using a one-size-fits-all approach, the STP model helps marketers prioritize segments that are more likely to generate revenue. They can then focus their marketing budget and efforts on those areas. When users feel that an app understands their needs, they are more likely to become loyal customers. 

Loyal customers are not only more likely to continue using an app but also to recommend it to others, helping grow the user base through word-of-mouth. This streamlines the user journey within the marketing funnel and eventually leads to higher user engagement. 

Reduced Marketing Costs

Targeting a general audience is expensive and time-consuming and usually doesn’t lead to many conversions. By using the STP model, app marketers can focus on the channels, products, and messaging that work best for their audience. This focus preserves marketer’s time and budget while maximizing results.

By targeting specific user segments with tailored marketing messages, you can increase conversion rates. Users are more likely to take the desired actions, such as making a purchase or signing up for a premium subscription, when they receive personalized offers and recommendations. By taking the time to use the STP model, marketers can make the most of their allocated resources and maximize their businesses ROI. 

Applying the STP Marketing Model for User Retention

Applying the STP marketing model is a crucial step when planning app engagement campaigns. Let’s use an example of a health and fitness app and breakdown the segmentation, targeting and positioning process. 

In this example, the app we are focusing on is a health and wellness subscription app that is looking to expand their user base and drive users to the end goal of signing up for a subscription from the free version. 

Segmentation

Marketers can segment their target audience by demographics and psychographics. Additionally they can look at user engagement behavior as a way of segmenting their audiences. For this example, we will segment the target market into three segments: 

A: This group is made up of young adults, who are primarily interested in affordable ways to improve their health and meet their fitness goals.

B: Consists of middle-class adults who want to live a healthier lifestyle while they are balancing their family and travel.

C: Health-conscious users that have already downloaded the app and frequently use the free version, but have not converted to the subscription.

Targeting

During the targeting step, marketers need to decide which segments to target. They identify the group that will offer the largest return and will be the most profitable. In this example, the highest return will be driven by the users who are already interacting with the free version of the app, but have not taken the next step in buying a subscription. 

Positioning 

In the final step of the STP model, marketers need to identify how they should position the product to target the most valuable customer segments. It’s important to consider why users should purchase the product rather than those of your competitors.

For this particular example, marketers can use messaging around premium features that are only accessible through the subscription. They can also offer discount incentives for users who upgrade to a subscription from the free version. Making sure that the messaging is personalized will drive higher conversions and increase user engagement. 

Takeaways of Leveraging STP Marketing Model for User Retention

The STP marketing model is a tool that can help businesses segment their audience, target their market, and position their product or service in ways that boost conversion. 

What is the STP Marketing Model: The STP marketing model stands for Segmentation, Targeting, and Positioning. It is a strategic framework used to make informed decisions about how to market their products or services. 

  • Segmentation: The goal is to identify groups of consumers who share similar characteristics, needs, and preferences. Segmentation can be based on various factors, including demographics, psychographics, behavior, and geographic location. 
  • Targeting: The next step is to select one or more specific segments to target. By choosing the most promising segments, a business can focus its marketing efforts and resources more effectively.
  • Positioning: Positioning is how a brand wants its product to be perceived by the target market in comparison to competitors. This step is where mobile marketers can craft their unique value proposition.