XO’s 2019 Guide to Email Segmentation

Posted June 25, 2019

The digital world is moving rapidly. Every month, a new app calls itself “the next big thing” and proclaims the death of email marketing. But before you fall into the hype, you should know this: email is still the most effective tool to attract customers to your business and to keep them around. Take social media as an example: it was supposed to replace email as a marketing channel long ago but email is still 40% more effective than Facebook for acquiring new customers. What keeps email marketing relevant in this fast-paced world? List segmentation. Keep reading to find out exactly what list segmentation is, and how you can apply it to your strategy to amp up your marketing efforts.

Email still rules.

List Segmentation 101

To put it bluntly, list segmentation is the practice of dividing the people in your email list into different groups based on demographic information, interests and preferences, shopping behavior, etc. So, how does this work? Imagine you run a fast-food restaurant, and you knew the preferences, dietary restrictions, habits, and tastes of every customer that walks through the door, so you could provide every person with a personalized menu. This strategy, although impractical, would make it so much easier to close the sale and make every person feel appreciated and turn them into loyal customers. With email marketing, it is so much simpler to personalize your customer’s experience, and it’s just as effective. Personalization is the goal of list segmentation: if you make the right segments, every email you send will be a relevant email with information your customers actually want, which turns into more conversions, more purchases, less unsubscribed people and happier customers.

Getting started: what do you need?

  • User profiles. You can collect user data as you go, so don’t panic if you don’t have much to start with.
  • A plan to organize your segments.
  • An email marketing tool that will help you gather data organize it, and ultimately, send your emails.

What are the benefits of list segmentation?

Before you decide that list segmentation is not worth the trouble, remember that if you do it right, you can offer a personalized customer experience through a mass medium without having to invest a lot of time and/or money. Other benefits of accurate list segmentation are:

  • Increased Open Rates. It doesn’t matter how good your products are, or how great is the content of your emails: people won’t buy what you’re selling if they are not interested in reading your emails in the first place.
  • Increased Click-Through Rates. Great content is what makes your customers want to interact with your brand, click on your links, and eventually, buy your products. List segmentation can help you create and deliver that kind of content, by giving your audience information relevant to their interests.
  • Increased Conversions. List segmentation helps you put the right content in front of the right customers, removing as much resistance as possible, so when they see that call-to-action, it will be a no-brainer to hit “buy”.
  • Fewer Unsubscribers. By using list segmentation, you decrease the chances of your customers unsubscribing from your email list since it helps you control how often someone gets your emails, and what’s in those emails, based on how they interact with your content.
  • Avoiding Spam Filters. Many companies go directly to the Spam folder because they send irrelevant content too often and to unengaged recipients. Using list segmentation, you can send personalized content that’s less likely to annoy customers.
  • Increased Customer Happiness. Nobody likes an inbox flooded with irrelevant, generic emails. By segmenting your email sends, you’re saving your customer time and helping them discover products they’ll love.

How to leverage your data for effective list segmentation

Any data that ties back to an email address could be a segment, but to make your segments truly effective, here are some ideas to get you started:

Demographic data. Demographic data is statistical data collected about the characteristics of a population, e.g. age, gender and income for example. This data is very basic, but it doesn’t mean is ineffective. If you’re selling clothes, for example, your emails will be much more effective if your list is divided by gender and age.

Behavioral data. Once you understand who’s using or buying your product, it’s time to dig a little deeper, to send data to your customers based on their behavior. Try using these segments to target people:
– How people interact with your website
– What they buy
– Free/Paid users
– When they last clicked on an email
– How often they buy

Customer sign-up date. Every customer is on a different step on the sales cycle, and it’s important to keep this in mind when segmenting. If someone is a long-time customer, you probably wouldn’t send them an onboarding email of how your product works, would you? Segment your list based on sign-up date and you can onboard new customers without flooding the inbox of your long-time customers, reward your VIP’s, celebrate anniversaries, and much more.

Customer Email Client Data. Segment your lists based on the devices people use to read your emails. More than 65% of emails are opened on smartphones first, and while many brands have moved towards mobile apps and responsive websites, 49% of email marketers still don’t segment their lists based on device habits. Consider sending mobile-focused customers a tweaked HTML version that’s optimized for the smaller screen—you could even experiment with plain-text templates, which render natively based on device. Also, instead of raking up your brain about when to schedule your emails, you could actually ask your customers about their preferences, and create groups from there. This will result in fewer unsubscribers and increased open rates.

When to segment your email list

Unless there is a mass email you want to send to ALL your customers (like a site-wide sale, a new product or a change in your website that will affect all of your customers), you should segment your email list. And it’s never too late to start. While some data is easier to collect when people first sign up (like age and gender), you can later infer that data based on their shopping behavior. The idea is to create complete and thorough profiles on an ongoing basis, factoring in every new purchase, abandoned cart and search history.

How to start segmenting your email list

Moving from one email list to several subgroups can seem like a daunting task. But fear not! We are here to guide you with six easy steps:

Define what data you need and how to get it. The customer data that you might need depends totally on your company and the products that you sell. For example, a pajama-selling store would be a lot more interested in finding out if their customers have kids than a food-ordering app would be. So, before you start segmenting, figure out which customer data will help you sell better and how to get it. Ask yourself these 4 questions:

  • What data do I need to sell my products better?
  • What data am I already collecting?
  • What data should I start collecting?
  • What data do I need to ask for?

Create your customer personas.Every company should know who their customers are, whether they are new customers, best customers, potential customers, etc., and go in-depth to create personas for them. Customer personas are the basis of list segmentation, because they help you define which message needs to get to which person and craft the emails accordingly. To create effective customer personas, ask yourself these questions:

  • What data do I have about these customers?
  • What are their “pain points” (specific problems that your customers might be experiencing) and how can my product help them with these pain points?
  • What are they trying to accomplish, and how can my product help them get there? What does a day in their life look like?

Choose your segments. Now that you have defined which data you need, gathered that information and created the customer personas, it’s time to get creative and experiment with some list segments. Go back to “how to leverage your data for effective list segmentation” to check out some ideas that might work for your company.

Create relevant content. Once you’ve created your list segments, it’s time to create the content that will go towards each group. Finding the right voice that appeals to each group might take some experimentation, so don’t be afraid to do some A/B testing and edit accordingly.

Use the right tool. Now comes the fun part: sending your emails out into the world. Using the right tool (one that can handle list segmentation) is key.
Klaviyo as impressive marketing automation available. It lets you segment your list based on different factors, such as their behavior on your website, their location, open rates, and by using different conditions and actions, you can build flows or rules for any subscriber situation.
On the other hand, MailChimp lets you segment lists by location, engagement, sign-up date, and more using a straightforward interface. You can also save segments and automatically add users to those segments if they meet your chosen criteria.

Test your campaigns and adjust. Now that you’ve sent your emails, is time to gather another kind of data: how are your campaigns performing out in the world? You can speed up the learning process with A/B testing—these experiments go hand-in-hand with email marketing because it’s so easy to split any list into “A” and “B” groups. With that data now available, make small, iterative changes until you hit the sweet spot.

Filed under: Blog

Tagged with: email, segmentation, tips

Libia RM

Libia has several years of experience creating content for marketing, advertising, and PR.