Marketers are constantly seeking ways to improve email marketing conversions, and segmentation is an excellent option for achieving this goal. Data shows that segmented email campaigns boast 14% higher open rates than their non-segmented counterparts.
It has also been reported that 77% of ROI stems from segmented, targeted, and triggered campaigns.
Impactful email marketing is significant for a company’s success. Putting together a strategy that delivers better prospects than the norm is challenging but highly rewarding when done right.
Marketers use email segmentation to focus their campaigns. This enables them to deliver on customer expectations and add value to their subscribers.
The average email open rate is 15-25%. That means 75-85% of prospects are not even offering a chance at conversion, even though customers in your email subscriber lists have given your company permission to contact them.
By sending segmented and personalized emails, you could see an increase in your open and click-through rates. With higher levels of email engagement, you would also see higher conversions.
In this post, we take a close look at email segmentation and ideas to boost your marketing conversions.
What is Email Segmentation?
Email segmentation is the division of email subscriber lists into smaller groups. Marketers will segment their email subscriber lists based on set criteria. They use this tactic to cater to customers and specific target audiences.
In an age where information, content, and attention are everything, email segmentation enables marketers to run highly targeted email campaigns.
Email segmentation is a similar concept to market segmentation. This divides a target market into smaller, digestible groups by focusing on various characteristics.
It’s easier to categorize contacts using analytics. Four overarching segmentation categories are often used.
A demographic segment will look at how customer demographics impact their decisions. These email lists will split contacts based on this data.
Examples of demographic segmentation characteristics include:
- Family/relationship status
A geographic segment enables sales territory mapping. A company can designate representatives to work on sales from specific regions. This segment will consider the locations of customers and a company’s brick-and-mortar buildings.
Companies solely operating online can use geographic customer data to deliver great campaigns to overseas customers.
Examples of geographic segmentation characteristics include:
- Location i.e. region, country, city
- Time zone
A psychographic segment will focus on psychological traits that can impact a customer’s behavior and consumption habits.
Examples of psychographic segmentation characteristics include:
- Social status
- Personal values
- Activities and interests
A behavioral segment will focus on the specific behavioral patterns of customers in your contact list. These patterns will be shared by certain types of consumers and provide a company with an audience to target.
Examples of behavioral segmentation characteristics include:
- Purchasing behavior
- Email engagements
- Digital interactions
As subscriber lists grow in size and diversity, it becomes a challenge to deliver relevant email marketing campaigns to each subscriber consistently. By separating subscriber lists into smaller categories, marketers can create a more successful email marketing strategy for each subscriber group.
The smaller the audience, the easier it is to engage them.
Why is Email Segmentation So Valuable?
In 2020, users sent roughly 306 billion emails worldwide. Email remains the primary source of communication between businesses and consumers, even with the slew of new and versatile communication tools that are available.
B2B research found that 81% of respondents perceived email as an effective tool to drive conversions later in their funnels.
The benefits of email marketing and email segmentation have been proven time and again, as evidenced by the graph below.
However, research shows that 72% of consumers only engage with personalized messages. So what’s the solution?
As email segmentation emphasizes relevant messaging to consumers, marketers that segment their campaigns have seen an increase of up to 760% in revenue for their companies. Email segmentation can make an email marketing campaign more impactful too.
Below are some reasons why segmentation could work for you.
Email segmentation clearly defines the target audience of your marketing campaign. By focusing on the distinguishable characteristics of a segment, you create messages that are specific and relevant to the interests of that group.
Improvements in email campaign messaging could lead to an increase in open rates and CTR. With segmentation, you can send the right messages when they matter most.
Stand Out From the Competition
Using segmentation, sales representatives can find unique differences among their email contact lists and customers. By discerning the right segments, it’s easier to tailor content towards specific groups.
As a company, you can address particular contact needs. The result is that your business will be able to offer something unique – and which the competition lacks.
Increased Customer Satisfaction
Customers appreciate companies that add value to their lives. When you send tailored content to the right people, you nurture your contact list.
By disseminating the same content to large chunks of a subscriber list, on the other hand, a company runs the risk of pushing some contacts away.
Email segmentation increases the likelihood that you’re providing resourceful and actionable content to the right sort of people.
Increased Customer Retention
With customer satisfaction comes customer retention. Email marketing is an effective method of boosting retention.
One study showed that 80% of business professionals believe email marketing increases customer retention. That’s because it enables you to stay in constant communication with your customers. A company can continue to add value to its contacts via regular communication even when it isn’t selling to them.
Email segmentation is valuable to a business as it provides specific targets to focus on. The data used to create segments offers a clear image of the ideal customer in several scenarios. It’s easier to provide high-quality content when there is an obvious goal in mind.
How To Segment Your Email Subscribers
To effectively segment your email list, you may want to use data quality software to ensure the accuracy of your contacts. Use the list in conjunction with buyer personas and choose criteria for each of your segments.
Using various iterations on the four segmentation categories above, decide on the types of contacts that will join any given segment.
Collect Contact Data
After choosing the criteria for your segmented email list, marketers need to gather data. This will enable you to categorize members of your email list properly. There are numerous ways to collect data.
Use Email Software to Segment Email Lists
You can use any email management software to categorize and segment your email list – for example, software like MailChimp or HubSpot’s Marketing Hub work well.
In MailChimp, go to the menu and select “audience”, then click on the “segments” tab to easily manage your email list groupings.
Examples of Email Segments
Email campaigns drive sales, and email segmentation boosts the effectiveness of those campaigns. There are many ways to categorize users and customers currently on your email list.
Segment Based on Behavioral Activity
1. Time Preferences
Some email subscribers want to receive your emails at particular times. Different subscribers will have different lives and schedules. By segmenting email lists based on receive-time preferences, you can ensure the maximum amount of contacts have access to your emails.
Some email subscribers prefer to read your marketing team’s emails daily. Others will choose to be contacted on a fortnightly basis. To provide a sense of personalization, communicate with your email list at their preferred times.
2. Email Engagement
Judging by the engagement levels of contacts, a company can gauge interest in its emailed content. If a company finds high levels of open and click-through rates on their emails, this indicates contacts are interested in their campaigns. However, open rates and CTR are not the only vital metrics to track.
The end goal is to have contacts engage with your emails and make more purchases. Emphasize metrics like the number of qualified leads generated, ROI per email, and the sales per email sent.
These metrics will inform you about customers converting and impacting your bottom line. Use email engagement metrics and the right tools to improve your email open rates.
3. Device Use/Formatting
Users choose different media to access their emails. 81% of people read emails in a mobile app, 21% open emails on a tablet, and just under 27% open emails on a desktop. To ensure a seamless experience across devices, you will want to optimize your content for each of them.
You can improve your sales email subject lines by taking device type into account. Write shorter subject lines for mobile devices because they have less real estate to work with. Shorter amounts of text and more straightforward layouts will improve readability.
4. Purchase History
Purchase history can provide valuable insights into the habits of a customer. It informs a marketer about the types of products a customer is interested in. It tells you about the habits the customer exhibits when preparing to either buy or abandon a shopping cart. Purchase history can also provide data on the amount of money a customer is willing to spend.
This type of information is advantageous for marketers who can recognize the patterns. Does the customer buy certain products at regular intervals? Did they forget to checkout?
You can send reminders and follow-up emails to give a gentle nudge. When you know a customer’s budget and product interests, you can efficiently market new products to them in the future.
Segment Based on Funnel Position
The customer journey can tell us a lot about a customer’s frame of mind. A great customer journey map will make it easier for your company to understand what they’re doing.
It makes it easier to segment customers and create specific messages for them.
1. New Prospect
Many companies have onboarding messages for new prospects who are considering buying. These emails can emphasize the value the company provides. By saying hello and being welcoming, a company can demonstrate its worth. These emails could include information packages and content that could inspire the prospect to move forward, for example.
2. First-time Buyer
A company may offer value to a customer that is a first-time buyer by building trust and rapport. These emails could include information that will help a customer make the most of their purchase or subscription. Offer resources like a community forum or educational posts that will help the customer to maximize their purchase.
3. Loyal Customer
A company must keep its loyal customers onboard. Loyal customers spend 67% more than others. You can capitalize on them by encouraging additional actions like writing reviews and answering surveys. You can also solidify your relationship by releasing information to them ahead of everyone else.
4. Distant Customer
Sometimes, it’s clear that a customer has little to no interest in your company’s marketing campaigns. It’s easy to determine which customers are still engaged and which have not opened or clicked on any emails over a lengthy period.
At this point, your company may consider purging inactive subscribers. Before removing them completely, you can send a short email to incentivize them to show their continued interest.
The Right Email Segmentation Strategy
A good email strategy will have several key features. Create a data-driven email marketing strategy by primarily focusing on these four points:
- Buyer personas and email segmentation
- Regular communication
- The right email marketing software
- Analyzing, testing, and assessing
Buyer Personas and Email Segmentation
Email marketing is the most effective marketing strategy because it allows you to create relevant content for the right customers. Using buyer personas and email segmentation, focus on the information that matters.
Be sure to contact your email subscribers regularly. You have permission to contact them because you provide value. Shower your customers with products, information, education, and more. Offer them information that matters and they’ll love you for it.
Email Marketing Software
Choose the right software for your needs. Select tools that will allow you to segment your email lists and avail yourself of hyperautomation. This way, you can lower the number of tasks handled by people and enrich your data using bots. Be sure your email marketing software can monitor and manage campaigns effectively.
Analyze the impact of email segmentation on your marketing conversions. No strategy is perfect. Take some time to assess the email campaigns you create and their impact on your bottom line, using equations like the gross margin formula. There are always tweaks that can be made to further improve your marketing campaigns.
It’s Your Turn to Try Email Segmentation
Marketing strategies and tactics are constantly evolving and improving, and email segmentation is a strategy that’s proven to positively impact a company’s bottom line. Get to know your email management software and learn the different ways you can bolster your email marketing campaigns.
Sam O’Brien is the Director of Digital and Growth for EMEA at RingCentral, a Global VoIP, video conferencing, and call center software provider. Sam has a passion for innovation and loves exploring ways to collaborate more with dispersed teams. He has written for websites such as G2 and Hubspot.
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