Why Email Segmentation is the Foundation of Email Marketing

If email marketing is your primary channel then email segmentation is one of the most important tools that you should know about, not just for email but for all online marketing. It\’s so important that without email segmentation we wouldn\’t have a robust email database worth sending to.

But what IS email segmentation?

Put simply, email segmentation is dividing up your subscriber list based on behavioral or other relevant data rather than their email domain: PA, AOL, Yahoo etc. This can be done using automation rules or manually programming them into your ESP\’s software platform and could be based on any number of criteria including but not limited to geographic location, purchase history, past purchasing patterns, target client profile and more.

Email segmentation allows you to create a more personalized experience for your subscribers. By segmenting email you can send different types of email to your contacts depending on their needs and wants at any given time.

For example, if someone has purchased from you in the past then they\’re obviously a lead that is ready to buy again or have made it clear that they want more information about what you offer – email segmentation allows you to recognize these email addresses and subsequently add them to an email list created for customers who\’ve previously purchased from you. They are now VIPs with a special place in your customer database and email sequence. By creating specific email lists like this for existing customers rather than sending all of your subscribers the same message over and over again, sales will increase and you will maintain your sender reputation.

If you did not email segment your email list then this email would go out to everyone, repel new customers and be wasted on your existing customer base. Many current subscribers will find the messaging irrelevant.

Worse still, a large proportion of the email recipients would mark it as Spam which may result in other lists being marked as spam due to a \’likelihood for false positives\’ because they all came from one sender: you.

You\’re teaching your subscribers to put you in the spam box. To stay out of the spam box and maintain your sender reputation you will need to understand how segmentation creates a more specific and more personal message for a set of subscribers.

For example, if you have ten subscribers who engage with every email you send, wouldn\’t you want to reward them for their loyalty?

What do you think will happen to that loyalty if you email blast them with content they don\’t want.

Clicks, visits to your websites, forwards, reviews, purchases, replying to emails, are a subscriber\’s way to telling you what they want.

Five reasons why it\’s important to start segmenting your email list for better targeting, engagement & conversions.

It\’s easier to personalize your email campaigns.

Segmentation allows you to create a more personalized experience for your subscribers based on their behavior and past purchases. You can segment your list to send different types of email campaigns. These could be automated emails that are sent according to their interests and needs when they signed up (e.g., those who want current affairs information or those who want to be be notified when you\’re in town giving a talk).

  • New customers – Offer them deals on signing up or adding to cart
  • Existing customers – Give them insider discounts, information about new products etc
  • Customers who have abandoned cart – Tell them why they should buy now
  • Email marketing upgrades – Showcase what\’s new in your email templates

With targeted content and offers, you can generate a higher ROI.

When you are sending emails to subscribers who\’ve recently purchased from you or who are highly engaged with your email content, you\’ll increasing the likelihood of a purchase. You can also increase your lead quality or donor pipeline.

A highly relevant email is more likely to be clicked on and have a positive impact on your sender reputation.

Moreover, segmented lists are moved by ESPs to an area of the platform designed for newsletters. This allows them to be tracked and optimized so that future campaigns can better engage their audience with different types of content.

Increasing relevance means an increase in quality scores.

Do you know that marketers spend 4x more efficiently when sending personalized emails? Have you heard about new Gmail filter changes that penalize marketers who send one email blast to all subscribers indiscriminately rather than using a segmented approach?

Segmentation allows you customise those sender related fields to more efficiently meet the needs of your subscribers. You can also track contacts using custom fields which will further help your sender reputation.

Better targeted email campaigns increase conversions.

The number of unsubscribes and spam complaints is highest among niche segments, Why not use segmentation if it is clear that the recipients have an interest in a specific type of content, or are looking for something in particular? This will improve your conversion rates as you become more relevant to their needs.

Increased brand loyalty and ROI.

Overall, email segmentation helps with brand awareness, loyalty and ROI by providing automated personalised messages based on how well they interact with your emails, what they\’ve viewed online etc. The result is higher engagement and sales!

Segmentation 101 – Extra credit homework

Here is a simple process for creating an email segmentation. Think of emailing your email list as writing a letter to each subscriber.

1)       Write the content for that email.

This is step one. Maybe you have a new product you\’re releasing or new software feature you want to upsell.

2)       Decide whether this email is for existing customers or if it\’s a welcome email to new subscribers.  

For the sake of this example, we\’re going to assume this email is for existing subscribers. Now, let\’s say you want to upsell a new SaaS feature. Take a look at all the ways your ESP can segment your subscriber data. Customer segmentation can be based on coupon code usage, event attendance (giveaways), product category and purchase history as well as any other behavioral data available through your ESP or any relevant tool you use.

One question I like to ask is: Does the subscriber have another activity which will allow you to further personalize the segment, like subscribers who\’ve made a purchase in the 30 days who have been software subscribers for more than six months?  If so, email those special subscribers.  Also take a look at other segments. Think about how you might create additional email copy to reach out to subscribers in these segments.

3)       Decide what kind of email content will go out to each segment based on things like the purchase history of existing customers as well as behavioral and demographic information such as clicks, active time on site, and location.  

An example might be: For current subscribers, you might send to a special VIP segment a pre-sale event or a special discount code available only to those subscribers who engaged often with your content who live in Arizona. (using dynamic content).

You\’re segmenting email addresses because there is a correlation between email content and email engagement.  If you email a segment of people with relevant offers then those subscribers will be much more likely to open the email and click on the links inside, boosting engagement.

4)       Create Dynamic Content: this is where things get fun!  

Use any email personalization software or service which includes advanced functionality such as email address matching and HTML support if you want to send emails based on specific subscriber attributes like their name, company name, purchase history all in HTML format.

Tools like MailChimp have excellent dynamic content creation features but vendors like Hubspot and Salesforce also include various automated email templates which can be customized for each segment. For example, subscribers who purchased USD $25.00 in the last month will receive one discount code; those who\’ve purchased USD $50 or more will receive a second discount code; and so on. Another example is to segment a list using zip codes as dynamic content.

If I\’m emailing a list of sales leads based in the greater Boston area, then I\’d email offers to everyone living in Massachusetts and New Hampshire (same zip code) with different content than those who live in Maine.  In this example, what will subscribers be likely to do if you send a list of sales leads in the greater Boston area to subscribers living in New Mexico? Or Toronto?

If the email is irrelevant to them, then subscribers aren\’t likely to open or click through email links and therefore email engagement will suffer.  An email list can be segmented using any relevant data including email addresses so long as there are people who fit a particular dynamic content criteria such as email address zip code, purchase history or another relevant behavioral trigger (i.e., forwarding email campaigns).

5)       Automate it

Once you\’ve created dynamic email templates or compiled an email segmentation list using a variety of triggers then create rules in your ESP to automatically send emails based on those triggers.

Every time a subscriber meets the conditions of the segment, for example, this will trigger an automated email with content that is highly tailored to their desires and/or needs.   What better way to engage subscribers than email content tailored specifically to them?

Why is email personalization so important?

Personalized email messages significantly increase their chances of being opened and having a click-through rate greater than 1%.  That means that if you send 100 emails using dynamic content from segmentation, one or two more people will open your email.  It may not seem like much but it makes a huge difference over time.  And when it comes to email marketing, it\’s all about creating repeat and loyal customers.  Customers who are happy with your brand, your company, and your products and services will buy again from you.

Email segmentation is the truly the foundation of email marketing.  After all, if you aren\’t segmenting your email list then you\’re just sending a static (non-dynamic) email message to everyone on the list and to be honest that\’s just plain boring plus you will, over time, ruin your sender reputation with Gmail, Microsoft and Apple.  If you are doing this then I\’d like to refer you back to point #2 in this article, \’With targeted content and offers, you can generate a higher ROI.\’