What is email segmentation?
Segmentation is an email marketing strategy that enables you to send different messages based on one or more criteria. It could be country, gender, or interest. The question that I answer in this article, how to segment your email list?
For example, an insurance broker might segment based on age, type of insurance, or suburb.
An email marketing campaign to target to homeowners would promote home and contents insurance. A fashion retailer might use segmentation to be able to target men and women, and then several interest-based segments such as footwear, accessories, dresses, and swimwear to create highly targeted email campaigns.
It is a technique used by businesses and marketers to send relevant communications to specific people in an email marketing list.
So far, so good; Email marketing segmentation is emailing to groups of contacts.
Why should I segment my email contacts?
Because people are different. No two people are ever the same.
Typically, segmentation is used to personalise emails so that you can deliver more relevant offers and information to subscribers. If, for example, our insurance company sent email related to building insurance to non-homeowners, that’s a wasted opportunity and our audience may perceive that the company really doesn’t know much about them as an individual.
We personalise because there is a fierce competition for attention in your subscribers’ inbox. By personalising and making offers and giving information that relate to the person, you make you deliver more value in your marketing.
Segmentation is a seemingly simple but extremely powerful mechanism. Many are already segmenting to some extent, but how about taking advantage of more advanced email segmentation?
Segmented email campaigns have an open rate that is 14.32% higher than non-segmented campaigns. (Mailchimp)
Higher return on investment
Mailchimp regularly puts together statistics around email marketing. Their 2017 Global Results reports
When we measured stats across all segmented campaigns, segmented campaigns performed markedly better than their non-segmented counterparts.
|Opens:||14.31% higher than non-segmented campaigns|
|Unique Opens:||10.64% higher than non-segmented campaigns|
|Clicks:||100.95% higher than non-segmented campaigns|
|Bounces:||4.65% lower than non-segmented campaigns|
|Abuse Reports:||3.90% lower than non-segmented campaigns|
|Unsubs:||9.37% lower than non-segmented campaigns|
How do I segment my contacts?
Wow, this is a question that can have a huge answer. How depends on your email service provider.
The following are four simple places to start.
Lists are the largest and most basic way to group our contacts. But don’t create too many of them as list management can become difficult. Lists are a less targeted way to segment our subscribers. A simple strategy when using lists to segment is to use the stage in a customer journey with your business. For example, one list for prospects and another for customers. If you sell to the public and to wholesale customers, consider one list for each.
When available, groups become your second option to segment larger numbers of contacts. You may have a group of people who are male or a group of people who own their own home. Groups are typically used when a subscriber could to move into another group but not frequently. For example, a contact may be in a homeowner group for our insurance company but would move into a non-homeowner group when they sell their home.
Custom fields are a highly flexible feature offered by some email service providers. They let you create a system that suits your business and allows the information you hold on your contacts to change as your business changes.
For example, if I decided to have a group for each gender, which group to the contacts go into when I don’t know their gender? If I used a custom field for gender, I can specify the gender or leave it blank if I don’t know. I can then select all contacts who have Male in the Gender field.
Custom fields are used for information about my contacts which may change but if it does, it happens infrequently.
Tags are one of the most flexible ways to segment our list. I can tag a contact based on their behaviour. For example, they submitted their email address in return for a lead magnet. Tag them as Interested. Once they download it, remove the interest tag and add a downloaded tag. When you use a tag to indicate the contact has access their lead magnet, you can send an email after 7 days to get feedback or ask them to share their experience on social media.
Tags are used to segment contacts by information that can change quickly, frequently and identifies an action they have taken.
Other ways to segment
This is a method by which contacts gain points for each action they take. They may get 5 points for opening an email. 50 points for forwarding an email to someone not on your list. 10 points for clicking a link in your email. When they reach a certain number of points, send them a small gift.
Most email service providers charge based on the number of contacts in your account. Some add up the numbers in your lists and if you have a contact in two lists, that counts as two contacts.
The point is that we should managing our lists. One way to do this is to segment based on the last time a contact took action. For example, tracking the last time they opened an email. The last time they clicked a link. The last time they visited our website. If they haven’t engaged with your email marking for 60 days, as an example, start sending them a re-engagement sequence to get them engaged.
Marketers found a 760% increase in email revenue from segmented campaigns (DMA).
Segmentation as a part of the email marketing plan
Once you have your list segmented, you now have an extremely powerful marketing machine. The better the segmentation, the more powerful a machine.
You can create an email that specifically targets a segment, and this in itself will increase open rates and click through rates. Segmentation should, therefore, be a part of every healthy email marketing strategy.
For example, a fashion retailer who sends a promotion to their list would send a different message to a single male that to a family. A promotion to women under the age of 25 may have a different offer than a promotion sent to women over the age of 55.
The way in which you can segment your list really depends on the email service provider, the plan you’re on with that provider, the information you’re capturing and how you want to use that information to create more targeted emails.
Do you have an interesting segmentation strategy you would like to share? Let us know by leaving a comment below.