The Case for Email Segmentation

By June 28, 2017Email Marketing

You have probably read hundreds of different tips about growing your email list and you probably feel stuck just like I did. You’ve grown your list to a significant number of subscribers, now what? Do you really want to be sending generic emails to thousands of people? You’ve heard that phrase email segmentation but it appears to be so complicated. Where do you begin?

How do you effectively communicate with your audience to make sales and grow your business?

Today’s tutorial is not about the usual design tips, or the popup integration, but about a less known subject in email marketing called email segmentation. It’s time to make a case for email segmentation.

email segmentation

Email segmentation is process that occurs when you take your audience and break it up into specific segments that you can then target separately to get maximum results. This process sits directly with email personalization. By segmenting your subscribers into smaller more targeted groups you are creating a more personalized experience for your email recipient.

For example,  you are an eCommerce business and the majority of your customers live in NY and NJ, segmenting your audience into two audiences by geographical location allows you to write targeted emails to each group. This will add a layer to the customer’s experience of your brand, and will make them more likely to trust your content will be of relevance to them and they will open your emails, purchase more products or be more likely to refer their friends to your store.


Does email segmentation really work? You betcha.

Mailchimp did a study back in 2015, using data from 11,000 campaigns sent to 9 million recipients, and they found that the segmented or individualized emails had 50% more clicks and 13.5% higher open rates than regular emails. That highlights that an segmented email is 50% more likely to be clicked on than a regular email campaign.

Also, according to the Direct Marketing Association, 77% of all revenue of online businesses came from segmented emails in 2015. Take a long look at that statistic and see what impact that has on your eCommerce store. If you’re not personalizing your emails you are missing out on 77% of your revenue.

So why is email segmentation so powerful and effective?

Let us take three scenarios:

Scenario 1

You go on an online store that sells shoes, it’s your favorite store that you purchase from frequently. The orange ones and the ones with the Brazilian theme on them (because you live in a villa in Brazil) have certainly caught your eye.

You only spend a few minutes on the site before you have to leave to take your kids to a fabulous Brazilian restaurant and don’t get around to completing your purchase. 

The next day you get an email from them with your name in the subject line like “Bradley what happened?” and you just have to open it. Inside is a short intro and some picture of products that are similar to what you looked at – orange shoes, and Brazilian themed awesome soccer shoes.  

Although you are interested you simply didn’t have time to purchase and a few days later receive a second email, with it this time comes an incentive to purchase, 50% off the second pair.

You feel a sense of relief, grateful for the reminder, and buy yourself a couple of pairs. Over the next few months you refer all of your friends to the site because you know that they will get the same personalized email from people that actually care about their experience on the site. What’s more, you received an incentive of a high value because you have been placed in a segment of VIP customers.

Scenario 2

Lets take the same situation, the same store and the same products, only this time the incentive that you received was for free delivery, sounds OK right? After all no-one has to give you an incentive.

But wait. Your friend who also received an abandoned cart email from this company also got an incentive for free delivery. Your friend isn’t a loyal customer, in fact they’ve never placed an order before, does that sound fair to you?

Should you be treating all your abandoned cart customers the same? Of course not, so why are companies failing to segment their lists?

Scenario 3

Let us take it one step further. You go on the same shoes store, same products, same Brazilian swag. When you log into your email the next day you get a generic email with their latest product. Your name is not on it, the products that you checked out are not on it, nothing asking you about your experience. You might remember to visit that store again, and you might not.

A few weeks later you remember about that store. Time to go back to the email they sent you. You look on the stuff that they sent you, and you don’t really like any of the suggested generic products that they mentioned.

You decide to google “orange Brazilian store” and you pick the first one you see. It isn’t a surprise that you buy your shoes somewhere else.

What’s the difference in these three scenarios?

The store that sent a personalized and segmented email got a sale, a dedicated customer, and a bunch of referrals. It also gave a loyal customer an extra incentive to show that their loyalty is appreciated.

The store that did not segment but did personalize also scored themselves a conversion. However failed to make the customer feel special.

The store that sent a generic email, well, we don’t even need to discuss what a failure that was.

 

With this in mind I think I have made my point clear. The power of segmenting your audience and personalizing your emails is immense. Time to take segmentation to the next level