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Every marketer should be obsessed with segmentation. Here’s why.

By November 30, 2016 No Comments

It’s not a surprise that intelligently segmented email lists results in more opens, a higher clickthrough rate and better deliverability. Case studies shared by Econsultancy prove this point by citing some pretty impressive metrics, such as a 750% increase in a retailer’s clickthrough rate thanks to segmentation. If you’re just getting started with creating groups within your lists, here’s the why, the how, and some tips on what to segment.

How to segment your email newsletters

Photo: Blood Orange by flickr member Andrew

Why create groups

Increased relevance

Pay close attention to what engages your subscribers to understand how they perceive themselves. The goal: get to the point where your subscribers anticipate (and eagerly open) your newsletter. Audiences are becoming highly self selective, segmenting themselves into very unique consumer niches. The better you understand your customers, the better you can segment your lists and deliver highly relevant content and products. Relevance builds trust, and over time, consumer loyalty.

Fewer unsubscribes

Think about the last time you unsubscribed from a list. Chances are something about their message or product was off target. If your email arrives at the right time, speaks your subscribers’ language and promotes a product your subscribers actually want or need, they are far less likely to remove themselves from your list.

Better deliverability

As a sender, your reputation depends on delivering content that resonates with your subscribers. The better you can increase your response rate with targeted, relevant content, the less often your subscribers will flag an email as spam or complain to their ISP. Relevance is the key to generating a higher response rate, fewer unhappy subscribers, and better overall results.

How to segment

There are myriad good reasons why you would want to segment your subscriber list; by now you’re probably convinced. If this is a new practice for you, getting down to the how can be a little daunting. You’re probably wondering:

  • How do I decide which subscribers to group together as their own segment?
  • How do I adapt my messaging to each type of subscriber?
  • How much should I segment?

Oh, so many ways…

According to 2013 research by Marketo, there is a direct correlation between a smaller subscriber list and higher levels of engagement. Similarly, the Direct Marketing Association found that segmented emails drove 56 percent of all email marketing revenue, and 36 percent of revenue was the result of emails sent to highly targeted subscriber lists. With this in mind, it’s time to think of all the marvelous ways you can segment your lists, given a little data and some time.

Customer life cycle

Naturally you want to send different messages to your subscribers depending on where they’re at in the consumer lifecycle: new, versus existing, loyal versus inactive customers require different strategies and content, depending on whether you’re welcoming them, re-engaging, etc.

Geography

Where your subscribers live has more impact than you may think. Segmenting based on geography enables you to customize content based on a subscriber’s time zone, weather patterns, current events and beyond.

Purchase history

Learn ways to categorize your subscribers based on their purchasing patterns: recent purchases, frequent buyers, high value customers, etc. Then develop content and offers to draw them in. As a tactic and a practice, segmenting based on purchase history is exceptionally lucrative and worth every minute you invest in making it work.

Purchase cycle

By tracking user behaviour on your website, you can determine where a subscriber is in the purchasing cycle. Is it their first visit? Are they browsing products? Have they watched your video? Are they adding items to their shopping cart? Develop a strategy that uses targeted content, triggered emails and offers that lead visitors from one stage in the purchase cycle to the next.

Tailor your content

Once you’ve created your lists, the real work begins. It’s time to develop a content strategy to engage and convert each segment. You can work with the same template, just adapt it. Establish a tone, message and offer that will appeal to each of your customer segments. Target your images and featured products accordingly. Test different messages, images and offers with your various segments to see what resonates and converts.

How many groups is too many?

How much you segment your list depends on the size and breadth of your subscriber database. There is no hard and fast rule. Ideally, you want each group to be large enough to be statistically significant based on the effort you put into creating dedicated content.

There may be times when you want to break out small, relevant segments. Sending triggered emails for abandoned shopping carts and other on-site actions is a very lucrative practice. But breaking out too many groups can dilute your message and your efforts. You may end up putting too much effort into a less profitable segment of your overall subscriber base. Additionally, over segmentation may make it difficult for you to gather statistically significant or accurate data.

We recommend following best practices by breaking out one key segment at a time until you find a balance that works for you. Watch your metrics and adapt accordingly. If you are a small team (or a team of one) over segmenting simply becomes unsustainable. In other words, create groups based on the size of your list and the size of your team; the more subscribers and the more resources you have to cater to these groups, the more granular you can get.

Easy does it

If you haven’t started segmenting your lists yet, don’t jump into the deep end. Create a strategy and plan, and implement it one segment at a time. Make sure you are able to track all clicks, leads and transactions generated by each of your segmented emails. Yes, you are embarking on a journey, one that involves data and strategy and content creation. Start small and learn as you go. If you pay attention to your audiences and send them what they want, they will reward you with their attention, and their business.

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Author Chrystian Guy

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