If you are a marketer, by now you’ve probably found out that segmentation is the holy grail of email marketing. Once I implemented email marketing segmentation for one of my clients, who had virtually no segmentation, I knew why. According to Kissmetrics, segmented email campaigns get 14.64% more opens and 59.99% more clicks than non-segmented campaigns.
I will report on the exact results of the email strategy revamp I did for one of my clients in another blog post, but I can give you this as a teaser: Our success rates were by far more impressive. We saw a 22% increase in the number of email opens and a 33% increase in the number of orders while email marketing associated average order value grew by 16% as well.
If you still don’t believe me, this Annual Email Optimizer Report by Lyris will hammer the importance of email segmentation right into your brain.
So, here are 5 quick-fix, easy segmentation strategies that I tried out and that worked very, very, very well. They are so easy anyone can immediately implement them and I guarantee you’ll see quick results.
- Segment by Engagement
In my opinion, segmenting by engagement is the most important segmentation technique. Why? Because sending to people, who have not been opening your emails really hurts your deliverability. A LOT!
What does deliverability mean? Well, since you’ve found this blog post I hope you know but in a nutshell it’s a metric that describes how likely it is for your email to land in the inbox folder and not the spam folder of your recipient and thus, the likelihood of someone actually opening your email.
Let’s be honest, if a person hasn’t opened your last 10 emails (or even 5) it’s likely they won’t be opening the next ones. Maybe you’re already in their spam folder, maybe they just can’t find the unsubscribe button, maybe they stopped using that email address. Whatever it is, they are not reading your emails so you might as well stop sending them. Think of it this way, would you keep texting a person that hasn’t responded to your last five texts? No, unless you’re a weirdo.
Your sales cycle could be another reason to segment by engagement. Businesses that sell solely high-ticket items, e.g. car dealerships, furniture stores etc., are likely to see high engagement during the sales cycle and a big drop off after customers have gone through the cycle and purchased. Of course, there’s always opportunity to cross- and up-sell, but generally speaking you are not as interested and engaged in sales emails by a car dealership after you have just purchased a car because it’s a purchase that doesn’t happen often.
So, how do you segment by engagement? In our case, we created a highly engaged segment from our entire email list. This segment contained anyone who had subscribed to us and opened an email from us in the last 30 days, or had just been added to our email list (meaning they couldn’t have opened one). 30 days is a pretty “long” period for a highly engaged segment, but in our case testing different time frames pointed to this one being the best choice. You have to find the period that makes sense for you. It might be 2 days, 2 weeks, 30 days or it even 3 months. Only proper testing will tell.
As a result, by implementing this segmentation technique (and only this one), we doubled our open rate while only 2,000 people (from a total 90,000) less opened our emails. Our click rates naturally also saw a considerable improvement.
You can use this segmentation technique in many ways:
- Create a re-engagement campaign to win back inactive customers: “Come back, we miss you”
- Send emails to highly engaged segments who have been active on your site recently and likely to purchase
If there was one, and one segmentation strategy only that you could implement, I would suggest this one.
Here’s a great example of a winback email by Hulu:
2. Segment by Geographic Location
Segmenting by geographic location may be more useful to some businesses, while not useful to other businesses. For my client we would use these segments to announce special events (pop-up stores, parties etc.) happening in our subscribers’ respective cities. However, you can also utilize geographic location segmentation without running location specific events for personalization purposes. Personalization is one of the big current trends in email marketing. So, if you’re sending to your customers in NY and they are having rainy weather, why not personalize your email based on that (e.g. Umbrellas to weather the current storm)? Or if you want to send to your subscribers in Los Angeles and there is a huge LA event coming up, for example Coachella (when all of LA becomes a ghost town), personalize your email in that way.
LA Targeted Email as a sunscreen company: “Heading to Coachella next weekend? Grab some Banana Boat sunscreen to keep your skin from burning while you’re burning up the dance floor at the outdoor stage”
NY Targeted Email as Amazon selling Kindle: “Raining outside? Perfect time to cuddle up on your couch with our Kindle reader”
Albeit you might not see the benefit of going through the trouble of tailoring your emails in that way, research has shown that email personalization goes a long — Pacific Crest Trail long — way.
Even if you don’t end up sending location personalized emails, use the geographic information of your subscribers to ensure they receive the email when you want them to receive it based on their timezone. Your email provider should give you a wonderful one-click option to enable that. So if you want everyone to receive your email at 11am their timezone, they will.
Here’s a great example of a geographically segmented email by UBER for Chicago:
3. Segment by Purchase Behavior
A very easy way to segment your email list is by purchase behavior, i.e. subscribers, who have already purchased and subscribers, who haven’t purchased yet.
For people, who have purchased you know they already trust your brand and you can assume that it will be easier to sell to them. They are also great leads for cross- or up-selling.
With new leads, however, you need to first establish trust in your business and brand. A more content based approach will work better for them and you can build rapport by sending them stories about happy customers, product reviews, brand mentions in the press or other content to create trust.
For already converted customers you should segment by purchase type, frequency and value. Purchase type is a great opportunity to up- or cross-sell to customers. It also gives you an indication of what kinds of products your customer likes and will help you send out emails with similar products or accessories.
“Just bought a new sofa? How about this matching coffee table? “
If you’re selling a product that requires refilling or replacement you can send out emails targeting your customer’s potential needs. For example, selling razors? Then you can make an educated guess that every few months your customers will need a replacement of blades so send out that email with a reminder to buy new blades or even a discount offer.
Purchase value is another great way of segmenting your past purchasers. You can use your customers purchasing behavior to understand which ones are more likely to buy your more expensive items and which ones are more interested in your affordable products. You can then group your customers and send out emails featuring the products in your customer group’s respective price range. Here’s an example of a grouping strategy:
- Big Spenders — Affluent shoppers
- Sale Lovers — Customers highly motivated by discounts, rebates and deals
For example, if you are a car brand offering both more affordable models, e.g. X1, as well as more high-end models, e.g. M6, you can segment by purchase value and target the high-end model purchasers (Big Spenders) with exclusive invites to events and new model releases (non-monetary offers) and the more affordable model purchasers with deals and discounts, e.g. fresh lease return vehicles etc.
Last but not least, purchase frequency is a metric you shouldn’t miss in your segmentation strategy. For example, you can segment into frequent buyers, super loyal brand lovers and one-time customers. Generally speaking frequent buyers, who have purchased more than once can be categorized as “loyal” customers. You have earned their trust and they will come back to you when they need your product.
“Super loyal brand lovers” purchase from you on a regular cadence and come back not only for the product, but also for the brand. This is a great segment to try out new ideas with as they are likely to be the most forgiving of customers.
One-time purchasers would be customers who have bought a product a while back, but have not come back since. These customers used to be a fan of your brand, but seem to be loosing engagement somehow. They should be targeted with emails intended to win them back for your brand (note: We already touched on this in the engagement section of this post). You can do this by offering personalized discounts on former purchases or highlighting your brand and product’s benefits again.
Here’s a great example of a cross-selling email by The Dollar Shave Club:
4. Position in the Sales Funnel
As fancy as this segmentation strategy may sound it is actually one of the easiest and one of the most effective. Customers should not be treated the same way depending on their position in the sales funnel. New subscribers, at the top of the funnel, are just getting to know your brand and should be targeted with a more general welcome series that introduces them to the brand, the product offerings and builds trust. Subscribers that have been receiving your emails for a period of time already should be further targeted by analyzing which emails they engage with the most (e.g. by clicking on the email). This information can help you tailor your next emails showcasing the products they were interested in.
The most popular, bottom of the funnel, email is the abandoned cart email. These customers looked at one of your products and even placed it in their shopping cart clearly indicating the intention to buy, but then something stopped them (more on this in the shopping cart abandonment article). By sending out an email or better even a series of emails to these customers reminding them about their cart and offering great deals and discounts to incentivize them to finalize the purchase you can increase your conversion rate by 35.26%.
Here’s a great example of an abandoned cart email by Dyson:
Bonus 6. Personal Interests
Segmenting by personal interest is a really important strategy both for “saving unsubscribers” as well as sending targeted emails. By offering a subscription center, in which your subscribers can tailor their experience and indicate what types of emails they want to receive you can deliver an overall more enjoyable newsletter experience for your customers and increase your email ROI. You can direct your subscribers to the subscription preference center when they sign up for your emails as well as next to the unsubscribe link in your emails. Things you can ask your audience are:
- How often they want to receive emails (daily, weekly, monthly)?
- What type of content they want to receive emails on (sales, giveaways, new arrivals etc.)?
Here’s a great example of a subscription center to gather your customer’s personal interests by L.L. Bean:
Email marketing segmentation is one of the most important tactics in your marketing strategy. It will win your business some big bucks and is still the best way for an e-commerce business to stay in touch with its customers (besides social media maybe?!). A little bit of creativity and some email marketing automation (more on that later) and you can start increasing your email ROI by lengths.
What’s the best email you’ve ever received from a brand?
Check out some awesome email examples at Really Good Emails:
CEO & Founder, The Email Marketers
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