User segmentation
Author: Patrick Jordan for Gain Capital, May 2016
Summary
Key findings
- The primary motivation of nearly all traders is to make money however only a small proportion manage to do so consistently
- The single biggest thing that we can do to improve the user experience is to help people make more money or at least to lose less
- The reasons that people make or lose money are known – they are a combination of knowledge, attitudes and behaviours
Analysis
- We have segmented people based on the extent to which they display knowledge, attitudes and behaviours that are likely to lead to winning trades
- We aim to provide user experiences that meet the needs of each segment and enable progression between segments
- A series of personas, representing each of the segments, has been created. These can be used as tools to guide the design of user experience
Index
- Scope
- Methodology
- Strategic direction
- Existing segmentation review
- Which is most useful
- Previous segmentations differ
- Literature review:
- Market reports UK
- Market reports US
- Market reports APC
- Internal reports
- Industry articles
- Scientific articles
- Most common trader mistakes
- Most common autotrading mistakes
- Trading psychology
- Media review - documentaries
- Emotions and trading
- Primary research:
- Internal interviews: key insights
- Ethnography: City Index tutorials (James Chen)
- User observation, interviews, trading analysis
- Trading data analysis
- Conclusions
- Segments & Personas:
Scope
We are looking for the most valuable ‘groups’ of users that share common needs and behaviors to target product development efforts.
- Existing users - Understand the needs and behaviors of people currently conducting Retail Online Leveraged Trading, specifically our current users and their potential value (not per user but by segment)
- Underserved users - Identify other segments whom we don’t serve or that we currently underserve and understand their value.
- Personas - Based on these develop and agree target personas that we can use to help us build products.
Methodology
Baseline what we know, validate with survey, deep dive to add detail
| Phase | Key inputs / activities | Purpose |
|---|---|---|
| Phase 1 - Secondary research |
|
Process of breaking down and building up hypothesis to test in the primary research phase |
| Phase 2A – Primary research (quantitative) |
|
Testing hypothesis to observe that the basis for segmentation is valid Uncover the basis for persona creation |
| Phase 2B – Primary research (qualitative) |
|
Ensure that the personas really do exist and put more meat on the bones |
| Phase 3 – Persona creation |
|
Bring personas to life and localize them so we relate to them |
Strategic direction
How can we achieve our aims
- Own the IP that drives users to make better decisions
- To bundle advisory services with trading platforms to create differentiators
- Equities focus – to increate the percentage of equity markets traded on the platforms
- Consolidate – no new market entries in 2016
Existing segmentation review
A number of research attempts, some consistency, nothing that has landed internally or that is applied to product development
| Research | Methodology | Basis of Segmentation | Segments |
|---|---|---|---|
| Foolproof (2014) | Qualitative (18 observations) | Trading style | Quick Trader; News Focused; Market Focused; Charts Focused; Explorer |
| Rokkan (2014) | Qualitative (43 interviews) | Psychographics and trading attitudes and behaviors | Ambitious, Tech-Savvy Millennial Novices; Realists |
| GfK (2014) | Quantitative (number surveyed not known) | Trading experience | Beginner; Experienced; Special |
| Forrester (2008) | Quantitative (1412) | Trading attitudes and behavior, psychographics | Ambitious Techies; DIY Currency Traders; Realistic Enthusiasts; Diversified Independents |
| Takeaways |
A variety of approaches to segmentation have been taken in the past They vary in terms of methodology and by the variables used to differentiate groups |
Rokken & Forrester provide the most complete view of our users
| Research | Participants’ trading experience |
Participants | Pros | Cons |
|---|---|---|---|---|
|
Foolproof (2014) |
None (7); |
UK, 22-65; |
Clear design implications |
Small, narrow sample Segments give limited information about users |
|
Rokkan (2014) |
Prospective traders (13); |
USA; UK; China |
Segments clearly identifiable Segments give rich information about users |
Small sample size May overemphasize the role of age |
|
GfK (2014) |
Beginner; experienced |
UK |
Large sample size Segments clearly identifiable |
Segments give limited information about users |
|
Forrester (2008) |
Forex.com users (448); |
USA 90% male; mean age 36 |
Large sample size Segments give rich information about users |
Segments difficult to identify Research done some time ago |
| Takeaways |
The Foolproof and GfK segmentations are based on a single dimension and focus only on trading The Rokkan and Forrester segmentations give a wider picture of users looking both at trading and at their wider lifestyles and values |
The segmentations differ by the number of segments in each.
| Research | Segment description |
|---|---|
|
Foolproof (2014) |
Quick trader: Immediate trade based on news, tip; no analysis on platform News focused: Trades based on news; seeks more news on platform Market focused: Limited range of markets; uses news and charts Charts focused: Not interested in news; uses charts to decide when to trade Explorer: Explores and analyses markets based on news and charts |
|
Rokkan (2014) |
Ambitious, Tech-Savvy Millennial Novices: Competitive and confident, social media savvy; enjoy thrills, accept risk; little experience; limited product range; high service expectations Realists: seek challenge; moderate risk; realistic success expectation; wide variety of markets; expect personalized service |
|
GfK (2014) |
Beginners: Little experience of online trading; seeking better ROI than investment; vary in how they use charts and news; many time pressured; variety of risk and confidence Experienced: More experience of online trading; wider variety of products traded; older members may be less tech savvy Special: Seek particular features and services (e.g. joint account for couple; advisory services for corporates) |
|
Forrester (2008) |
Ambitious Techies: Tech savvy; high consumption of online financial media; wide range of products; competitive and materialistic DIY Currency Traders: Forex focused; chart based; low consumption of online financial media; low mobile usage Realistic Enthusiasts: Seek challenges; ,mainly focused on forex; consider themselves informed, knowledgeable; not materialistic; independent Diversified independents: Trade multiple products on multiple platforms; most don’t use demo; younger and more educated; not materialistic; independent |
| Takeaways |
Experience levels are key variables in both the Rokkan and GfK segmentations With the Foolproof and Forrester analyses there is a range of experience levels within each segment |
Next: Secondary research - Literature review, media and analysis