What is email list segmentation?
List segmentation refers to the process of dividing an email contact list into smaller “segments” according to certain shared characteristics. This enables email marketers to create more targeted and relevant content based on the interests of each segment.
Using segmentation in your email marketing will boost your email marketing engagement by providing content that is more relevant to your email contacts.
When it comes to marketing, taking a “one-size-fits-all” approach by sending mass emails or indiscriminately targeting your paid promotions will likely result in a “one-size-fits-none” outcome.
Consumers don’t want to feel like they’re being fed into a machine-like marketing process that only focuses on turning a profit.
Behaving like this with customers will almost certainly hurt your brand image in the long run. Customer relationships are built on trust and people won’t trust a company that ignores its customers’ unique preferences.
In spite of this, many marketers still make the mistake of creating impersonal marketing campaigns, especially when it comes to email marketing.
Instead of busting out their creativity and making targeted email campaigns that resonate with specific groups of contacts in their email list, many marketers end up sending an email campaign to their entire database of contacts.
While this may save time in the short run, the sacrifice you make in terms of engagement and branding can be much more significant.
To really get the most out of your email marketing, you need to use segmentation. By dividing up your email list you can create more targeted emails.
Overview of Segmentation in Email Marketing
As we mentioned at the top of the post, email segmentation is like the classic expression “divide and conquer.” It comes from the more general term, “market segmentation,” which is the process of dividing a large consumer market into smaller sub-groups based on similar interests, demographics, or other characteristics. This allows businesses to identify segments with higher revenue potential and tailor their marketing accordingly.
Segmentation in email marketing works in the same way. Instead of targeting your entire list with an email, email segmentation entails breaking up your email contact list into smaller sub-lists for better targeting.
Benefits of Email Segmentation
By now, you probably know that including segmentation as part of your email marketing strategy makes it easier to create more targeted campaigns. But, what are some more concrete benefits arise from this?
- Increased email engagement and conversion rates: By sending content that is more relevant to the reader, you can drastically increase the number of people who open and engage with your email campaigns. For example, highlighting a summer sale on all clothing items is far less likely to produce clicks and conversions than a campaign featuring top men’s clothing sale items sent to a list of your recurring customers who identify as men
- Stronger customer loyalty: Sending targeted emails can definitely help your engagement rates, but it’s also good branding. The more customers feel like their concerns or needs are being addressed, the more trust they will have in your business. This will help cultivate a deeper relationship with your contacts, leading to more customer loyalty and repeat purchases.
- Better deliverability: Increasing engagement rates for your email campaigns will also improve your email sender reputation, which helps ensure that your emails never end up in the SPAM folder.
Obviously, those are all great things to have as you work to grow your business. But, when you consider these benefits, you should also think about the other side of the equation.
As mentioned earlier, failing to implement some sort of segmentation can have serious drawbacks in terms of how your customers view your business. Improvements in customer data and targeting software have created a marketing environment that’s very unforgiving of content that isn’t relevant to the consumer. Notwithstanding the concrete benefits of segmentation, this new level of expectation from consumers is enough of a reason to implement segmentation in your email marketing.
Segmentation vs. Personalization
Many bloggers and marketers like to use the terms segmentation and personalization interchangeably when talking about email marketing tactics. While they both share the same objectives of generating more email engagement and building better customer relationships, they’re actually quite different.
Segmentation: Targeting the least common denominator
With segmentation, you’re grouping contacts together based on some shared trait or interest. That means that when you write content for email campaigns targeting this segment, you’re trying to appeal to the common needs or interests of this group.
This tactic allows email marketers to create more effective emails, but it’s still a generalized approach to marketing communications.
Personalization: Customizing for individual contacts
Segmentation can be considered a form of personalization, but usually, email personalization refers to the use of data from each customer to create hyper-targeted content.
The most basic example of this is injecting the customers first name in the salutation of your email in lieu of the more generic “Hey there” or something similar. But, personalization in email can go much deeper than that. A more advanced, but still common, example is the addition of a recommended products section that uses a customer’s previous purchase data to suggest related items for their next purchase.
While personalization can be a powerful tool for creating more compelling emails, it usually works best in conjunction with an email segmentation strategy.
Types of Segmentation in Email Marketing
Hopefully, you’re starting to feel inspired to use segmentation in your own email marketing. But, it’s probably not the best idea to just create segments at random. The whole point of segmenting your email list is to enable you to create emails that are more relevant to different subsets of your email list. To achieve this, you have to have a plan of attack on how you want to group contacts.
This is a pretty tough thing to do. Different businesses will have different types of segmentation that work better than others.
However, I will go over a few of the main categories of segmentation so you can start looking at your own audience and find the best way to start segmenting contacts to achieve better email marketing results.
1. Contact demographics
One of the easiest and most obvious categories by which you can segment contacts is demographics.
Although this won’t always be relevant for your business, dividing contacts based on demographics and provide you with a really great opportunity to improve targeting for the email campaigns you’re sending out.
These segments could be based on any of the following:
- Gender preference (good for ecommerce stores)
- Language preference (for international companies)
In order to create these segments, it’s best that you ask your contacts up front for this information.
That will make it much easier to segment effectively without having to guess!
2. Source of acquisition
Segmenting contacts based on the channel through which they found your business and signed up for your emails is another excellent strategy.
Depending on the tactics you use to collect contacts, these segments can have very different interests or needs. Let’s take a look at a few examples of acquisition channels by which you can segment contacts:
Event or trade show
This is a very specific type of contact with a very high potential to convert into a customer. These contacts have most likely already met you, and they clearly want to know more.
Because most events have a specific theme (e.g. ecommerce, entrepreneurs, WordPress users, industry-specific, etc.), you have an awesome opportunity to create a more targeted email campaign. Your message should be focused on the needs and interests of the specific groups that were represented at the conference. This will result in a hyper-targeted campaign that is guaranteed to perform well!
You can also offer a discount for attending the event to give them that extra nudge.
Contacts who subscribe to your blog newsletter are usually looking to learn. That means if you want to give them what they’re looking for, you need to find out exactly what their interests are.
You can do this in a few different ways:
- Include the option to select areas of interest at the time of signup.
- Track what articles people are signing up from
- Include targeted pieces of “gated content” that require people to give an email address before they download.
Whichever method you choose, you’ll be much more able to choose relevant content if you know what subscribers are already interested in reading.
Contacts who sign up for emails at ecommerce checkout are most likely looking for exclusive deals and discounts.
This segment offers a great opportunity to develop loyal customers who will continue to return to your store. By subscribing at checkout, they are essentially telling you that they want to return to your store when you have good deals. Use that to your advantage and build a loyalty program around this segment.
Email campaign engagement is a very important category as well, and it’s one that many marketers tend to forget about.
If you have contacts that are constantly engaging with your email campaigns (opening and clicking through), this is a great opportunity to reward them for their engagement.
Conversely, the unengaged contacts present you with a different opportunity. These are the people that you need to re-engage or remove from your email list. Reaching out with a special offer can be an effective tool in rebuilding relationships with your unengaged customers.
Also, if contacts don’t engage with these emails, it might be time to remove them in order to protect your sender score.
Before creating these segments, it’s important that you define what an engaged user is and what an unengaged user is. This is best done by establishing a period of time in which to look for a certain pattern of behavior. For example:
- Engaged – 3 email clicks in the last 3 months
- Unengaged – No email opens in the last 3 months
You can make these whatever you like, just as long as you don’t forget about them!
For the best results, layer your segmentation
Now that you know some of the main categories for email list segmentation, it’s important to think about the best way to implement these segments.
Remember how I said that emails need to be relevant?
If you want to get really specific, you can layer your segmentation conditions, enabling you to create an even narrower audience that is easier to address in your campaigns.
For example, instead of sending an email to all of your customers who identify as women, you can send an email to all of your contacts who have clicked on your last 3 emails, live in the US, and identify as women.
That’s pretty specific, right?!
Although this means that you’ll spend more time creating emails for different segments, it may be worth it with the increase in engagement that you will see from more personalized content.
Take it one step further with dynamic segmentation
The last think you can do to make your life even easier is to automate certain types of segmentation with marketing automation software.
This will let you create dynamically updated contact segments based on things like website behavior, past email engagement with specific types of campaigns, purchase behavior, lead score, and more! But the best part is, you don’t have to create these segments on your own. Just set up a marketing automation workflow that automatically adds contacts to specific lists if they meet a certain set of criteria.
Do you have segments that perform particularly well? Let us know in the comments!