February 14, 2019

Email Marketing Segmentation

email list segmentation

What is email marketing segmentation?

Simply put, email segmentation is the practice of making sure that people only receive emails they actually care to see.

By the end of this guide you will have clear ideas on how to use email segmentation in way that increases CTR’s(clickthrough rates), open rates, reduce unsubscribes, and increase ROI, all while sending less emails to each customer.

Why Segmentation in Email Marketing Matters

Segmentation in email marketing matters because it improves the chances of your customers continuing to open your emails, and that means they are more likely to engage in your content or make a purchase. 

The following is an example of how segmentation can be useful.

Let’s say we have someone who’s looking to lose weight, but maybe they don’t know exactly what to do.

If you have an informative blog post that helps them workout, along with a downloadable document to track their progress they might give you their email address.

Over time they continue to read your blog, and they also give sign up for downloadable content that focuses on healthy eating. However, they don’t sign up for anything that is focused on supplements.

You know this person wants to lose weight, and they are responsive to offers based around eating better and working out, but they don’t seem to be interested in supplements.

In this specific example if you had a program that offered a custom meal plan, and a custom workout regiment you’d have a decent chance of getting them to accept the offer. You know this because you are tracking what they signed up for.

Many business have all of their customers on one list, even when they have several different products or services. That means a customer could get informaton on things they don’t care about.

I know it that it seems to make more sense to say “the more people that see the offer the more money I can make”.  As good at that may sound, that is not what you want to do.

What you want to do is make sure the customer is targeted correctly so they only get relevant emails.

This increases the chances that the email is opened, and decreases the chances that they unsubscribe. It also reduces the number of emails they will receive from you. Getting too many emails is another reason why people unsubscribe from email list.

According to a study done by Mailchimp when segmentation was done by interest the open rate was almost 10% higher, and the clickthrough rate was about 75% higher when compared to nonsegmented emails.

What do these numbers mean to you?

They mean you will receive a higher ROI from your emails.

If you use email, and those numbers applied to you then it could lead to a substansial increase in profit. For the next example we’ll pretend your company has 10000 person email list. We will also say company has an open rate of about 20%, and a clickthrough rate of 5%. That could lead to 100 people sent to an order page.

A segmented list would have an open rate of 22% and and clickthrough rate of 8.75%. That is 193 people going to your sales page, which is almost double, what it was before.

I’m not promising that your results will be that good, but it is an ideas of what is possible. Even if you only 50 more people that is significant since you won’t be buying traffic to get 50 more chances to make a sale.

Segmentation List Examples

There are several groups that you can split people into in order to make sure they only get relevant emails. What groups you break them into depends on your business.

Some examples are:

  • Age
  • Buyer
  • Buying Stage
  • Interest by topic
  • Location
  • Nonbuyer
  • Specific Purchases Made

I’m going to go over a few of these just to give you some idea of how they can be useful.

Age-Generally speaking younger people and older people don’t have the same problems. If someone is 22 they’re not likely going to be concerned with anti-wrinkle creams. 

Interest by Topic-Pet based businesses could segment down to animals such as cats, dogs, birds, and so on. They could even go further and segment by breed of animal. Some people might not like Poodles, but they could be interested in having a German Shepard.

Location-If you know someone lives in New York City, and another person lives in Miami they shouldn’t get the same offer when it comes to what clothes to buy. There could easily be a 30 degree or more difference in temperature.

Purchases Made-If someone makes a certain purchase you want to be sure to not send them the same offer again, and it can also give you hints as to what they might be interested in buying next. Additionally they should get messages thanking them on what they purchased depending on what they bought. 

How to Obtain Data for Email Segmentation

The good thing about segmentation is that as you segment it gives you more data that makes your segmentation even better.

Going back to my pet example you might start off by segmenting your customers by who likes a certain type of animal, such as dogs. Then you can go into breeds of dogs, and then go into types of dogs in that breed such as toy poodles and miniature poodles, which are both types of poodles.

There are quiet a few ways to gain this information.

As far as methods for data collection you can use surveys, quizzes, track purchases, and anything else that let you know a what a customer’s preferences or opinons are.

Some people are always happy to let their voices be heard, but in my opinion it never hurts to offer an incentive. Two things that I’ve been offered are coupons and entry into a contest.

Personally, I think the coupon is the better offer because it guarantees that something will be gained. However some people may prefer the contest entry so test both to see what your audience prefers.

Before I  go further on this topic I’d like for you to see an example of on-site data collection.

Here we have Audible.com showing me books I might like based on purchases I’ve made, and searches I’ve done.

In order to get more accurate data that is personalized to me they have buttons on the right hand side. One is “not interested”. That will let them know to not show me certain offers again. If they have an email promotion, they likely won’t offer me books that I clicked “not interested” on.

Segmentation Data Collection

As you can see there are several ways to gather the data needed to efficiently segment your list.

Segmentation data, once gathered, will be sent to your autoresponder and CRM if you’re using a CRM. This will help keep people segmented based on the data that you have.

Not all autoresponders have the ability to segment people by whatever your needs are. If you’re running a business I would highly suggest you use one that does. Some of the more popular ones that can do this are ActiveCampaign, Infusionsoft, Aweber, and Convertkit.

The ESP(email service provider), handles the data and segmenting. You just have to decide what the qualifications are. As an example if someone is a nonbuyer they can be automatically moved to the “buyer” list or category after a purchase is made.

I personally prefer ActiveCampaign. It has the best combination of price and features in my opinion. It allows you to tag(categorize) people based on what they download, what they opt-in for, what webpages the visited, purchases made, and a long list of other things. You can even use combination of the listed actions, and set things up to move people between list.

The sample image below is from ActiveCampaign. It shows someone being tagged if they visited a certain website page. If they don’t visit a specific page an email is sent to them.

Active Campaign Segmentation

You don’t need to introduce a high level of complexity if you’re new to segmenting emails, but you should be aware of what is possible.That allows for you to plan ahead.

If you’d like more information on the capabilities of ActiveCampaign check out my review.

I hope you found this email marketing segmentation guide useful. Feel free to comment below with any questions or comments about email segmentation.

 

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