WHY EMAIL LIST SEGMENTATION IS IMPORTANT?

It’s a well-known fact that email marketing is well worth the effort. In fact, it can produce a 3,800% return of investment which equals an average earning of $38 for every $1 you spend. However, that doesn’t mean blasting potential and current customers with mass emails are going to net you anything but getting tagged as spam. In this day and age, it’s all about the personal touch.

There is no one-size-fits-all email. All your buyers or customers are different. Even if you only sell one product or service, your customer base will be varied, with different problems and needs. A blanket email isn’t going to catch their interest enough for them to engage with you. It’s more than likely that your email won’t even stand out among the hundreds of emails that the average office worker receives every day. If you want your recipients to respond to the call to action in your email, you’re going to need to make them feel like you see them as an individual, not just one of many by addressing their personal wants, needs, and/or problems. The only way to do this is through email personalization. There are several tactics you can utilize to personalize emails. One of the most popular (and successful) is email list segmentation.

What is email segmentation?

Email segmentation is when you segment or divide your list of subscribers into groups based on certain criteria. This could be any data you’ve gathered from your customer bases such as geographic location, age, interests, and purchase history, to name a few. This email personalization tactic allows you to cater to the needs of the different groups in your customer base by sending them highly relevant emails.

Benefits of email segmentation

Obviously, the main goal of email segmentation is to help increase revenue for the company through email marketing. According to studies, this technique can increase open rates by 203%. Moreover, according to HubSpot, marketers who utilize email list segmentation have noted a 760% increase in revenue. But that’s not the sole benefit.

Targeted and personalized content

As we’ve already mentioned, email segmentation requires you to create different groups within your customer base according to their personal information such as location, interests, and purchasing history. This allows you to create more targeted and personalized content that provides value to your customers and drives engagement.

 

For example, let’s say you own a pet shop. Naturally, your customers would include pet owners of various kinds. Some would have dogs, others would have cats, and a few may be pet owners of birds. If you have a promo on cat food, sending an email about it to all your subscribers would alienate some of them. They might feel “unvalued” because you’re sending them the information they are not interested in or do not need. But with email segmentation, you can make sure that you only send relevant content to your customers. By providing value to your customers, they’ll feel “special” and, as a result, be more receptive to your offers. This also enables you to establish rapport with your customers and build a stronger relationship with them.

Time and budget optimization

Time and budget limitations are a fact with any kind of small to medium-sized business. Unlike big businesses, one cannot afford to buy huge billboard ads or TV time to promote a product or service. Even flyers cost a lot of time and money to create, print and distribute.

With email marketing, you’re able to promote your business within the constraints of the budget. More importantly, email segmentation, allows you to promote your product or service to the right people. You not only get to increase revenue, but you’re also more efficient in the use of your time and money.

Effective matrix 

Email segmentation creates an effective matrix. What does that mean? Well, it’s impossible that 100% of your subscribers will be interested in getting your email. The reality is, only a number of them will be curious or interested enough to open the email and possibly respond to your call to action. Since this is the case, the smart thing to do is to figure out who will most likely engage with your content. Email segmentation creates a matrix that helps you figure out who exactly are the people on your list who would be responsive to your content, increasing the likelihood that they’ll open the email, read the content, and click on your link.

Email Validation Services improve your Sender Reputation 

As we’ve already established, this email marketing tactic makes your emails more engaging to the recipients. Because your content is highly relevant to them, they will start to trust your future emails which means they’re more likely to open your emails in the future, less likely to place them in the junk folder or trash bin.  And this improves your sender reputation.

So, what is sender reputation and why is it important? Just like your reputation as a person, sender reputation will help determine whether or not you are trustworthy. In this particular case, it’s the ISPs who will be using your sender reputation to determine whether you are a trustworthy, legitimate sender. The higher the sender’s reputation, the more likely your email will be delivered to the recipient. A low sender reputation can cause your emails to be sent to the spam folder or, worse, not delivered at all. How are you going to get customer engagement and increased revenue if you can’t even reach your subscribers via email?

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Email Segmentation Strategies

There are several email marketing segmentation strategies that you can implement to your email marketing campaigns. It is important to note that while email marketing is effective for all businesses, what works for one marketer won’t necessarily work for another. Because of this, figuring out how to segment your subscribers in a way that will produce the best results can be daunting. This is why we’ve listed some of the popular strategies that you can easily try out.

Demographic data

The first thing you learn about your customers is demographic data which includes age, gender, income, and employment. This information can help you get a clearer picture of your customers’ needs and interests. The more information you get, the more you’ll learn about them. However, you can’t have your customers fill out too many fields in your sign-up process just to get as much data as you can. Otherwise, they might opt not to sign up at all. This means you’ll need to limit your choice ranging from 1 to 3 demographic factors that are the most relevant to your business. For example, if you run a large clothing store, you’ll want to learn the gender of your customer base. Maybe their age as well, depending on the products you offer in your store.

Email Engagement

Email engagement is calculated based on the open rate and clickthrough rate. Tracking these metrics can help you determine which customers are most likely to respond to your messages and those who are more likely to ignore them.

Using email engagement, you can split your list into active and inactive subscribers. Then, you can choose to customize content to keep the active users engaged as well as craft a campaign that is designed to hook the interest of those who are no longer engaging with your brand.

Using clickthrough rates, you can also segment your list between “interested” and “uninterested” buyers which can help you pinpoint where they are in the buying journey.

Geographic Area

A geographic location is a valuable tool in segmenting subscribers, especially if your business is spread out over a large area. For example, if your company owns a chain of retail stores across the country, you can send out targeted emails to subscribers based on their location like an ongoing sale in your Chicago store.

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Past Purchases

Amazon utilizes past purchases quite well. Have you ever noticed how they offer recommendations based on your buying history? In the same way, you can utilize that information to divide your subscribers based on what they’re likely to purchase next.

Here’s an example. Let’s say you own a supermarket. Customers who buy dishwashing soap, laundry detergents, shampoo are likely to buy again in the future once they use up the product.  Sending them an email that will remind them of the need to replace or refill their previous order can result in revenue for you as well as brand loyalty.

Amount Spent

Aside from what customers purchase, you can also use the amount they spend to segment your list. With this information, you’re able to determine which customers are more likely to buy expensive items and those who lean more towards budget-friendly products. You can also find out which of your subscribers are more likely to appreciate discounts and which ones will respond more to non-monetary offers.

Purchase frequency

Another way to split your subscribers into groups is to use the frequency of their purchases. Using this criterion, you’ll get two groups – frequent buyers and one-time buyers.

Frequent buyers return to purchase a product weekly or monthly which indicates their loyalty to your brand and interest in your services or products. With these buyers, you can send promotional deals, information on new products and/or services, or upgrades. One-time buyers, on the other hand, are those who purchased from you and haven’t been back in months. With these buyers, you can send them emails that will recapture their interest in your brand such as a discount on previous purchases.

Survey results

The sign-up process isn’t the only way for you to gather information from your customers. You can get demographic data as well as insights into your customers through a survey or a quiz. Of course, you need them to answer the survey or quiz first before you can get any data you can use. If you want people to take the time to answer your questions, you need to provide them with some incentive such as a raffle ticket to a prize or a discount coupon.

Email Segmentation Tools and Software

A lot of email marketing software provides built-in tools that will help you segment your list, making the process easier for you. However, you need to make sure that you understand how a provider segments subscribers. There are several tools that include Campaign Monitor, Constant Contact, AWeber, MailChimp, ConvertKit, GetResponse, and HubSpot.

Conclusion

There is no doubt that email marketing can do wonders for your business. But it’s not as easy as some people think. With so many other emails vying for a customer’s attention, it can cost you money instead of earning you revenue if you don’t implement email segmentation. The beauty of this tactic is that it can be used by any business, whether you’re in manufacturing or retail, offering a product or a service. More importantly, it helps you create real relationships with people. The ones who matter the most – your customers. So, give it a try. We’ve already given you several ways to get started.

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