Email is a marketing tool, so there is a formulaic way of speaking about it, primarily in terms of open rate, click-through rate, bounce rate, unsubscribe rate, etc. But it’s equally important to stress the peculiarity of email in that it can strike up long-lasting customer relationships like no other marketing channel can.
Herein lies the specialty of email. Segmentation is chiefly about harnessing this unique aspect of email and leveraging it to the hilt. “Segments” give you accurate and actionable insights into who your subscribers are individually.
Now there are multiple criteria for segmenting your contacts, thanks particularly to cutting-edge email marketing platforms which offer advanced segmentation. But for the sake of both accuracy and economy, we will start by looking at the four overarching criteria for segmentation in email. Let’s begin!
1. Email Segmentation by Demographics
Demographic segmentation involves segmenting your target audience based on their location, gender, age, occupation, salary, marital status, etc. The more information you can get from your users on the signup forms, the more granular your segmentation.
Now, speaking of signup forms, you want to include metrics that are mission-critical for your business. For instance, if you are a clothing brand, gender would be a critical metric. Likewise, if you are a software developer, the company position would be valuable info.
2. Email Segmentation by User Preferences
Ultimately, the goal of segmentation is to help you engage with your subscribers on their terms. This is why marketing to users according to their preferences is so important. Isn’t this also how successful customer relationships work?
As a brand, you are giving subscribers control over the type of emails they wish to receive and the frequency thereof. Ask them if they want to receive post updates, discounts, or new arrivals. Do they want to hear from you daily, weekly, or monthly?
If subscribers receive unnecessary emails, they will naturally unsubscribe. If they don’t, they will, at the least, refuse to engage with your emails. Over time, these subscribers who might not have been wholly averse to receiving emails from you may be disengaged, necessitating resource-intensive retargeting campaigns in the future.
3. Email Segmentation by Engagement Level
Whether or not you should send emails to a particular segment depends on how much the segment is interacting with your earlier messages. If you continue engaging with a disinterested audience, you will not just be wasting your time and money, but potentially holding the door for deliverability issues as well.
There are five kinds of subscribers in the engagement category:
- Active subscribers: These are people who actively engage with your content. You want to target your primary campaigns to this segment.
- Inactive subscribers: Perhaps a bulk of your email list is made up of inactive subscribers. The best way to re-engage this segment is to dedicate a win-back campaign to it.
- Potentially inactive subscribers: These subscribers have not engaged with your last five or six emails. You might want to send automated win-back emails to this segment as well.
- New subscribers: These people have just joined your list and are excited about your brand. You can send them welcome emails, discount codes, educational content, etc.
- Invalid subscribers: Never email this segment. It consists of people who have unsubscribed from your list.
Pro tip: You can create a suppression list of inactive subscribers. A suppression list ensures that these subscribers cannot be added to the subscriber list.
If a subscriber has deleted their account; has clicked the unsubscribe link; has resulted in delivery failures; or is featured on a global blacklist, add them to the suppression list.
4. Email Segmentation by User Behavior
Typically, knowing how visitors interact with your website is the best way to segment your audience by behavior. Cart abandonment emails are a classic example of behavioral segmentation. Your goal is to respond to customers according to their online behavior so that you can send them the right email at the right time.
Of course, you can also learn about customer behavior by looking at their social media engagement. (In fact, those who follow your social media updates are more likely to be engaged via email.) If someone interacts with a product-specific post on Instagram, you can resell the product to them over email.
In their paper Behavioral Segmentation Analysis of Online Consumer Audience in Turkey by Using Real E-commerce Transaction Data, Farid Huseynov and Sevgi Ozkan identify five types of online customers based on extensive behavioral data:
- Opportunist customers: These customers look for very specific products. They are characterized by their “high usage of discount coupons and free shipping offers.”
- Transient customers: Transient customers visit online stores infrequently, but when they do, they tend to buy a diverse range of products.
- Need-based customers: Customers in this segment prefer buying high-price products. Similar to the previous segment, these customers are occasional visitors.
- Skeptical newcomers: This segment is mostly made up of new customers who, curiously enough, buy more often than transient and need-based shoppers.
- Repetitive shoppers: Compared to the preceding segments, this segment clearly accounts for maximum revenue generation.
You can use the above classification to segment your audience. Depending on your unique brand positioning, you may/may not be more granular in your approach to segmentation.
Email Segmentation: A Few Core Tips And Recommendations
If we have gotten ahead of ourselves, let’s remember that customer relationship is the primary goal of email segmentation. Everything else follows from having attained this one object. With that in mind, here are a few core recommendations:
- Decide which segments are your first priority. Start by shooting for the low-hanging fruit. You must be familiar with subscribers who are highly engaged. Segment these first.
- Next, determine what kind of engagement is meaningful for your brand. It could be the number of opens, clicks, purchases, etc.
- Now you have decided the segments you need to create. But, do you have the necessary information to build these segments? That’s your next step.
- You can collect valuable customer data via signup forms and preference centers.
- If you have a mishmash of data from online accounts, newsletter signups, online purchases, etc. you must import this data to your CRM.
- Make sure to capture each subscriber source as well. Knowing where your subscribers are coming from is useful as it shows where your brand is performing best.
- Delete segments you no longer need. Otherwise, segments can get messy over time. Gradually, you might not want to use them and end up targeting less than you should.
- Resist the temptation to continue investing in subscribers who are very likely to have gone invalid. As we said before, it’s costly and may hurt your deliverability.
Looking Beyond General Segments
We have already looked at the principal criteria for email segmentation. In our final section, we bring you a few additional micro-criteria to segment your contacts so that you can send them more targeted, more personalized emails.
- By location: You can send promotional emails for in-store events in specific locations. Depending on a region’s weather conditions, you can promote specific types of clothing.
- By buyer cycle: Create a segment for first-time buyers and another for repeat purchasers. You can encourage first-time buyers to make a follow-up purchase.
- By past purchases: Segment past customers and send them product launch emails, special discounts, new arrivals, and so on.
- By rewards: Create a segment for high-value customers and engage them to increase their lifetime value. Promote special events and sales opportunities exclusively to frequent customers.
- By signup source: You should not send product alerts to blog subscribers. That’s why segmentation by source is so important.
Customer relationship is the ultimate goal of marketing. Since email is the best way to engage with your audience on a personal level, it’s naturally the most effective channel for building relationships.
As we mentioned at the beginning, segmentation is applying email to its highest potential. Sending the right message to the right people – it all comes down to this. In a sense, segmentation is also comforting in that it eliminates coercion, subtle or otherwise, out of your marketing game plan. You are offering what customers themselves opted to receive.