What is a lifecycle?

In product terms, it’s the journey a customer goes throughout their customer experience. It’s their circle of life.

The lifecycle begins even before a customer knows about the product and until they churn and never use the product again. However, for data reasons, we begin tracking the journey once they signup so for many the lifecycle begins at “Signup”. Understanding where our customers are in their lifecycle is key to delivering personalized experiences.

But, why do we care about personalization?

Why is personalization important?

The ultimate goal for most data science, product, and marketing teams is personalization. It’s because of the numerous benefits from financial to product retention and ultimately the brand. Personalization maximizes retention, LTV, and all other important metrics. The foundation of personalization is segmentation.

Why don’t more companies do it? There’s an assumption of complexity and usually a lack of resources to implement it. But, segmentation neither has to be complex or resource intensive. There’s a simple and beautiful framework called RFM that achieves 85-90% of what you’ll need. RFM stands for Recency, Frequency, and Monetary. If you combine RFM with a Lifecycle framework you’ll get a complete way to segment all of your users.

Recency → When was their last purchase?

Frequency → How many purchases over a certain period?

Monetary → How much money was spent over a certain period?

How Uber Segments 161M+ Customers

Uber uses a Lifecycle + RFM framework to segment all of their users. The 161M+ refers to the Monthly Active Platform Customers from their last earnings call so the real number is likely closer to 300M+.

Note: None of the numbers, thresholds, segment names are actually what Uber uses. I can’t share those, but I can share the framework we used.

First, let’s explore the lifecycle of an Uber customer. The terms I use will be for Rides (Mobility), but it can easily apply to UberEATS (delivery).

An Uber customer has the following journey:

1. They signup

2. They either “Churn” and never take a trip OR

3. They take their first trip

4. They either “Churn” and never take a 2nd trip OR

5. They take their 2nd trip

6. They either “Churn” and never take a 3rd trip OR

7. They take their 3rd trip

8. And it goes on forever