1. What is email segmentation?
2. Why do you need to segment your email list?
3. How to collect data for your targeted email lists
4. So how does it work? Tech Essentials of email list segmentation
5. Ways of customer segmentation
6. Email Segmentation Tools and Software
When it comes to email marketing these days everything must be personalized and customized, ‘one-size-fits-all’ approach doesn’t work anymore. Otherwise, you have no chance of getting noticed by your recipient. Some generic messages won’t do the trick, and it’s quite understandable. Nobody wants to be fed into the machine-like email marketing process. Ignoring the unique preferences of your clients will hurt your brand and nullify the effectiveness of your email campaigns.
We’ve recently covered the topic of personalization for email marketing in our blog, but here we’d like to focus on what makes personalized emails even possible - email list segmentation. If you know how to wisely divide your contact list into groups and know the exact preferences of each group, you can then provide them with more relevant and interesting information. This way you’ll increase the open and click-through rates, as your customers are more likely to open and click on the emails which are specifically oriented on them.
What is email segmentation?
Email list segmentation is exactly what the name itself suggests - breaking up the contact list into smaller groups. You can define segments, based on some similar characteristics, like demographics, geography, psychographics, common interests, and preferences - you name it. An easy way to find out information about your customers is by asking the right questions in the sign-up forms or by observing their behavior. If you have enough data on your contacts, be sure to aptly construct segments, which will enable you to have a more targeted email marketing.
Why do you need to segment your email list?
Customer segmentation allows you to send the right content to the right people, at the right time. You can achieve it by asking your contacts to fill out submission forms and by observing their interaction with your website: what they view, click on. For instance, if your lead is checking the company’s pricing, it’s the right time to trigger some sales nurturing emails to usher them closer to purchase decision. Of course, having a well-designed form will increase the submission rate of your forms.
Increase open rates
You might be wondering how to segment customers and realize that it’s quite a huge undertaking, but, believe me, it’s worth your while. Email segmentation helps you from the very beginning - to get your recipient open the email. You can send tailored subject lines to specific groups of people and entice them to open the email. Don’t take just my word for it. In a recent study, MailChimp demonstrated the stats, that prove that segmented campaigns get 14,31% more opens compared to their non-segmented counterparts.
Image source MailChimp
Increase click-through rates
According to another study, presented by HubSpot, targeting specific buyer personas increases click-through rates by 16%. If you create content that aligns closely with your customers’ interests, you make it easier for yourself to get them to click on the links and in general interact with your website.
Image source HubSpot
Slicing up your email list will help you transform a long difficult process of nurturing your clients through the sales funnel into a complete no-brainer. Sending tailored messages which hit the sweet spot of already engaged customer increases the email marketing revenue by 760%, according to the Direct Marketing Association. This makes total sense, as the motivated customer is much more likely to click and buy the product relevant for them.
Image source Campaign Monitor
Decrease Unsubscribes and Spam Filters
The days of spray-and-pray email marketing are long done. You most certainly will just irritate the subscriber if you start flooding their inbox with messages which are completely irrelevant to them. This is a sure way to getting unsubscribed or ending up in the spam folder. In their study, MailChimp found that segmentation decreased unsubscribes by 9,37%. So if you don’t want to start praying during next email campaign, segment your list.
Increasing satisfied email response from customers
Providing your customers with relevant, valuable content actually means saving your customer’s time and helping them to find a solution to their pains. This is what increases email marketing response rates, as well as makes your customers happy. And a happy customer will stay loyal and become your brand ambassador.
How to collect data for your targeted email lists
Unless you’re psychic there is no other way of finding out how to segment email lists but to collect huge amounts of data. The more you know about your clients, the more relevant emails you can send to them. The easiest and the least invasive method is just asking for this information, and your clients will decide for themselves whether they want to share it with you or not.
When you meet someone for the first time at a party, you ask questions to get to know them better. The same rules apply when you want to find out more about your clients. Ask them a few questions about their gender, age, location, industry. This will be the first step in collecting data about them and creating demographic market segmentation. But, a kind advice, don’t create endless lists of questions, because you’ll risk abandonment. Personally, I get annoyed when I need to spend fifteen minutes answering all the questions when I just need to quickly sign-up. If you don’t get all the user data in the sign-up form, no worries: you can collect information and build user profiles as you go.
Image source NEWOLDSTAMP
Every customer is unique, so they can state their unique preferences, choosing how often and at what time they would rather receive emails. It’s essential that every email should give them access to the form where they can alter or update their subscription preferences. To keep customers satisfied, just give them an opportunity to choose what works best for them, after all, nobody knows them better than themselves.
Image source really good emails
Surveys and Polls
You should continuously review and refine the way you segment your contact list. Surveys are a great way to collect a lot of data in a short time. If your clients are not jumping with joy when they see a long list of questions, then ask them simple one-question polls. This doesn’t require much effort from them. Another solution is just sending your clients emails, explaining what benefits they can get, because of sharing this info with you.
Image source really good emails
The traditional surveys, polls, preference forms, and sign-ups are not enough anymore. They just give information about who your customer is, but if you derive insights from your customers' actions, you’ll understand their behavior. Based on the customer’s interactions with your website, like what they click on, whether they bought your product, you can precisely target segments and send them specific emails.
So how does it work? Tech Essentials of email list segmentation
So you might be curious how it all works under the hood? You don’t need to be a tech guru to understand the essentials which will enable you to segment your list accordingly.
Basically, the email list segmentation best practices are either to use the API, add JS code or Pixel to your website. Depending on which action the client performs on your website they are automatically added to some groups and then email sequences are triggered. JS code and Pixel both fire every time a person visits your site or clicks somewhere. When your contacts submit an email address their profile is created in CRM.
Types of software integrations to collect data
If you’re not a techie, API might sound to you as a kind of beer (IPA). It actually stands for Application Programming Interface. Most SAAS companies have built API documentation for their clients. The main goal of API is to help your service call and receive data from another service. You may request data based on some characteristic, for example, retrieve email addresses of customers who have just signed up or purchased a product. This way you can easily segment the email list.
Image source MailChimp
Another effective way of tracking customer behavior is by inserting Pixel. You can count the email opens by inserting a 1px-by-1px transparent image (usually a GIF or PNG file) into the header, body, or footer of an email. When a recipient opens an email containing this 1-pixel image, the image sends a message to the server, indicating that the email has been opened. This is how you can check how recipients engage with your email campaigns, which content they find interesting and at what specific time they choose to open them. This information may prove to be valuable for you when you’re segmenting your email list to provide your leads with the more personalized content at the convenient for them time.
Image source GetResponse
Do you need a developer for integration?
If you want to make some changes in your source code, it’s better to leave it to the professionals. Don’t go meddling with your code, unless you have a very clear idea of what you’re doing. From the above-mentioned types of software integrations, API definitely requires a developer. This kind of integration is tricky, cause each specific platform has different requirements, you have to meet so that you could access their functionality. Pixel and JS code although easier, still require some background knowledge, or you will need to use GTM or WP plugins to install them.
Google Tag Manager (GTM) comes in handy if you want to figure out how to track email clicks. If you know what your contacts click on, you’ll have a better image of what kind of content may interest them and how to nudge them further to the purchase. In order to set up GTM, you need to create three things: a variable, a trigger, and a tag. When you’re finished with these three easy steps, you’ll know which leads clicked on what, so you’ll be able to segment your list based on what people click on.
If you are using WordPress for creating your website, the easiest solution will be just to utilize one of the tons of plugins specifically designed for WordPress. They are easy to install even without any software programming skills and they offer the same functionality: tracking the number of open, read and clicked emails.
Ways of customer segmentation
1. Segmentation based on your buyer personas
Image source MailChimp
Every marketer knows that a buyer persona is a must-have for any type of business. But what if your product appeals not only to one type of people but to several? Then there is a need to create more personas, with their own characteristics, needs, interests, and motivation to buy your product. The more personas you create, the more segmented your email list is, hence more targeted email campaigns.
2. Segmentation based on demographics
When your lead is just signing up, it’s important to seize the moment and ask them for general information, about their gender, age, occupation, education, family type, etc. The more questions you can fit in without irritating the contact the better. But don’t overdo it. When the signup form is too long, don’t get surprised when customers abandon this tedious process. If you see that the number of questions is on the verge of becoming annoying, better postpone it for the better times. They can later pop-up, as a short 2-3 question quiz. Demographic market segmentation is quite easy to set up, and although quite generalized it still provides you with the insight into how to best slice up your email list. If you’re not sure about the demographic characteristics of your buyer personas, then just ask the existing customers. Based on their answers you’ll be able to create a clearer idea for yourself.
3. Segmentation based on behavior
Segmentation based on purchasing behavior is about identifying trends in how customers behave during the process of making a purchase decision. For instance, some people are bargain-hunters, always looking for a lower price. So it’s better to send them emails announcing the discounts. Others always put off making the actual purchase, so they’d need an incentive email explaining the urgency. Then there are emotional buyers, susceptible to cross-sell offers. And there are always nit-pickers, who meticulously read about all the characteristics of the product and compare it with the others. Based on the behavioral data, you can segment your client list into these types and approach each one accordingly.
You can segment the contacts based on the time when they are most likely to make a purchase. We may divide these behavioral segments into universal, recurring-personal and rare-personal occasions. Universal occasions apply to the majority of customers, they are usually seasonal, holiday events. For instance, if your company sells Christmas trees, then obviously it will bring most of the revenue around that time of the year. Recurring-personal occasions are about repeating purchasing patterns. If you can recognize a pattern, you may target that group with emails reminding them to make a purchase. Rare-personal occasions are more irregular and spontaneous, and thus more difficult to predict.
How the customers are using your product or service plays a big part in email segmentation. Analyze how frequently the customers purchase, how much time interact with a service, what features use. Based on the data you collect, you may divide them into heavy, medium, and light users. This type of segmentation allows you to test different actions and approaches in order to increase user involvement or attract more new customers, which have a high potential of becoming super users.
What kind of benefits customers are seeking when they’re using your product or service may separate seemingly identical, in terms of demographic characteristics, customers. If your customers are seeking different primary benefits and you send them all the same message, you’re wasting a lot of time and budget. By understanding each customer’s behavior, their desired benefits, you can tailor your emails to resonate just right with the right people.
Keeping loyal customers happy should be one of your top priorities, as they are your most valuable assets. They can become your biggest brand advocates, so you should understand their needs and make sure you satisfy them. By analyzing behavioral data, you can segment the list and find the most loyal customers. You could offer them privileges, exclusive rewards, to motivate them to give referrals, endorsements, provide product feedback, test new product versions and just share their positive experience.
User status is yet another way how to segment your contact list, based on their attitude towards your product or service. The common user status types are non-users, prospects, first-time buyers, regular users, and defectors. You may also add your own specific user statuses, to further segment your customers.
Separating into behavioral segments by customer journey stage, allows you to customize your email campaigns and increase conversion on every stage. Moreover, you can identify the blockers which are keeping your customers from evolving. I’m not saying that accurately pinpointing where your customer is in the buyer’s journey is an easy task, but it’s possible by leveraging all the client’s behavioral data.
Remember that collecting personal data also means strictly following GDPR rules. Read our article to stay GDPR compliant.
4. Segmentation based on locations and time tones
Collecting geographic information about your customers is a child’s game, just add a few questions to the signup form or emails in welcome sequence, and that’s it. The value of this information for segmentation is, on the other hand, quite high. Take for example businesses, where geographic location influences purchasing decisions, targeted email campaigns will bring them more profit. Another way how to use geographic data is to send emails to your customers at optimum for them time, taking into account their time zone.
5. Segmentation based on customer type
Depending on your specific product or service you may segment your customer list based on the customer’s personal interests, job function, education level and seniority. If you’re a B2B company, you need to take into account the organization type of your client company, whether they’re non-profit organizations or small start-ups. All of them need different types of approaches. If you work with different industries, you may segment your contact list accordingly. The more data you collect about your customers, the better. It will help you to make well-informed decisions during the process of segmentation.
Email Segmentation Tools and Software
Image source HubSpot
HubSpot presents an array of marketing and sales tools to find new prospects, track emails, create email templates, etc. Among the others, there’s an advanced segmentation tool, which is available for a monthly fee.
Image source Optimove
Optimove makes use of all the data available and employs sophisticated clustering models in order to perform highly accurate segmentation. The secret sauce here is their focus on the dynamic nature of customers’ behavior. It continuously tracks how every customer is moving from one segment to another over time. This innovative approach to segmentation will help you to convert more customers and reduce the customer churn.
Image source GetResponse
GetResponse helps you to save some money during your email campaigns by sending highly-targeted emails instead of blasting the same email to thousands of contacts, who have nothing in common. You can segment contacts by using GetResponse advanced segmentation tool based on customer’s data, geolocation, subscription date, engagement and so much more.
Image source MailChimp
Apart from built-in segmentation, MailChimp offers a long list of perks. Its robust automation makes sure that your emails get to the right people at the right time. You can use their data to target customers based on their behavior, preferences and future sales. You can improve your email marketing with MailChimp’s API, which allows you to access almost all data and functionality within the app.
Image source AWeber
AWeber allows you to design sophisticated marketing funnels with the help of automated email campaigns. You can also segment your list of subscribers based on the links they click and emails they open by using tags.
Image source ConvertKit
ConvertKit offers simple but powerful automation which helps you to send well-timed and highly targeted content. They achieve it by segmenting the contact list based on the customers’ journey, interests, location and other data.
Image source ActiveCampaign
ActiveCampaign gives you an opportunity to customize your automated email campaigns by using the conditional content. You can target specific groups of contacts by segmenting them based on demographics, location, behavior, custom fields, tags, etc.
Image source Constant Contact
Constant Contact enables you to build stronger connections with your customer by offering features, like an autoresponder, personalization, and automation of emails. You can send more targeted emails because it helps you to segment contacts based on the content they click.
Each customer is unique, so you have to treat them accordingly. Email list segmentation is a powerful way to customize and personalize your messages based on recipients’ demographic and behavioral data, while at the same time increasing open and click-through rates as well as conversions. With the right tools and information at hand, you can maximize the impact of every email sent, making them more relevant and interesting for the customers.