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How to segment your email lists (and why it’s needed)
Email marketing can be powerful for your business – but it’s also hugely competitive.
Billions of emails are sent daily, all vying for attention from the recipients. Many will get ignored. Yours must stand out from the crowd and invite people to open it.
Personalisation is a technique marketers use to drive email engagement. It provides tailored experiences to your database, placing the valuable information they’re looking for directly into their inboxes. It also gives them a reason to interact with your business and care about your emails.
However, if you’re looking to utilise personalisation, you need to understand what your customers want and need at every stage. This is where segmentation comes in, grouping your customers based on their potential wants and needs.
This guide explores email segmentation, why it matters and how to do it successfully.
What is email segmentation?
Email segmentation is the act of dividing your email database into groups based on their shared characteristics. Examples of these characteristics include:
- Customer journey stage
- Previous purchases
- Demographics (including job title, gender and age)
- Geographical location
- Marketing preference
- Past activity/behaviour (such as actions undertaken on your website)
Email contacts may be in multiple segments if they meet the criteria.
By segmenting your database, you can send personalised emails to each group with an understanding of the context. It is much more impactful than a generic email, as you can meet your audience’s unique needs.
The benefits of email segmentation
There are many advantages to email segmentation. We have listed the most significant benefits below.
Created personalised experiences
Segmentation’s primary purpose is to deliver personalised experiences to your customers and leads.
By offering such experiences, you will access much better results than a blanket email to your whole database. You can pinpoint the information that the customer needs based on their characteristics and use it to compel them to engage with your emails.
Almost all your KPIs will improve by consistently providing value, including engagement and conversion rates. Segmented campaigns have as much as 50% higher click-through rates than untargeted campaigns.
You’ll also build a reputation as a trusted email sender, meaning your recipients are more inclined to press open next time.
Nurture the customer journey
When you segment your emails, you will differentiate their content to align with your chosen database group. This is crucial to delivering the aforementioned tailored value.
Part of this includes designing calls to action that represent the natural next step for the customer.
For example, if you have a customer who has recently subscribed to your email, you might send them a unique discount code to encourage them to make their first purchase. If you’re emailing someone who has made repeat purchases, you might email them about a loyalty scheme where they can access unique rewards.
Not only will you send the right call-to-action to your recipients, but you’ll also increase their chances of completing it. 88% of users agree they’re more likely to respond positively to an email when it looks like it’s been crafted just for them.
Email segmentation allows you to nurture customers along their journey by guiding them onto the appropriate action. This warms up leads, increases conversions and secures long-term loyalty and repeat purchases from existing customers.
Build better relationships
When sending segmented emails, you must provide value to the recipient based on your understanding of their needs and traits. This is also crucial to building strong customer relationships.
Whilst your immediate aim may be to secure a sale, you’ll also need to consider the longer-term picture.
Examples of ways to provide value that will create long-lasting relationships include:
- Providing content that allows customers to get the most from their purchases
- Giving purchasers a unique discount code as a thank you
- Asking for their feedback
- Giving them exclusive knowledge of product launches or sales events
By creating these relationships, you will benefit from improved customer retention (which is more cost-effective than lead generation), repeat purchases and higher satisfaction rates.
Happy customers are more likely to recommend you to others and provide valuable user-generated content.
Improve audience understanding
Before you segment your email database, you need to understand who your customers are, their pain points and their drivers. To develop this knowledge, you need data.
There are many ways to gain this data, including search engines, website analytics, social listening and surveys. These will give you the information you need to segment your database successfully.
Using insight to split your email recipients into groups is a significant first step to understanding your customers. This not only fuels you to create better email campaigns aligned to each segment’s needs, but it improves how you target leads across your marketing channels – including content, social media, advertising and more.
Empowered with a comprehensive understanding of your leads, you will revolutionise your marketing strategy to serve them better and generate maximum results.
Finally, and perhaps most significantly for many brands, segmenting your emails boosts potential revenue.
By creating customised email campaigns that meet the wants and needs of every recipient, you will convert more leads into customers and secure higher sales values from those who do.
You will also promote brand loyalty which again increases the lifetime value of each customer and attracts new leads to your business through recommendations.
Past case studies show marketers who send segmented campaigns reporting up to a 760% increase in revenue – which every business will want to experience.
How to segment your email database
Once you have understood the advantages of email segmentation, you might be wondering how to do it. We explain below.
Understand your customers
Customer insight is crucial to split your database into segments.
Start by asking what you know about your customers and their shared traits. Creating buyer personas is a helpful way to place your target leads into groups based on their commonalities.
Once you have a better understanding of your customers, separating them into segments will be much easier and more intuitive.
It would help if you also had a way to store this data so it’s easy to access – an intelligent CRM system should allow this.
Choose your categories
Once you have understood the available data, you need to decide how to group your customers. The best approach will determine where customer needs may differentiate enough to warrant separate email campaigns.
Examples of segments can include:
- Subscribed to marketing communications vs unsubscribed (crucial to comply with GDPR laws)
- Customer journey stage (awareness, consideration and decision)
- Locations (especially if there is a geographical element to your business)
- Last time purchased from the business
- Type of purchases/services bought historically
- Buyer persona group
There’s no limit to how many segments you have, though it is best to have a few strong groups rather than many overlapping or weaker ones. Most significantly, they must make sense for your brand, customers and what you want to achieve.
When you have defined your categories, you’ll need to gather the data you plan to utilise for splitting your customers. Hopefully, your data review will have highlighted what you already have available to use.
If you require further data that you currently do not have access to, then take steps to implement measures to acquire it. Make sure you have the correct permissions to do so.
Examples of common data points are:
- Demographic, geographic and privacy data – you should ask customers to input this when they sign up for emails
- Past behaviour – typically requires unique tracking codes across your website and other platforms that feed into your CRM
- Purchase history – this should be stored on your website, provided you utilise e-commerce
The data will allow you to decide which customers fit into which categories. Suppose you have customers who do not have insightful data associated with their profile. In that case, you might wish to create a more generic segment for them to send general emails – but be aware that it might not bring significant results.
Split your database
Once you have chosen categories and collected the data, it’s time to split your database.
If you have a small database, you may be able to do this manually. However, keeping on top is hard, especially as new subscribers join.
The best route forward is to invest in a reliable CRM system which allows you to store and segment your contacts.
It should also contain automation so that when a new contact is added, they are instantly added to the appropriate segments based on their criteria.
This will also allow you to move recipients into updated groups as they move onto a new stage of their journey or where their characteristics or preferences change.
With your segments in place, it’s time to create tailored email campaigns. You can generate solo campaigns for specific groups or design variations of one email, so it is personalised to each segment.
Remember to focus on the group’s needs and how you can add value. It involves many factors, including your content, calls-to-action, subject lines and imagery. Every aspect should be optimised for the recipient, so keep their preferences in mind when crafting.
After your email campaigns have been designed, send the correct email to the appropriate segment of your database.
Once again, a sound CRM system should enable you to make your selections easily.
It’s also possible to set up automated processes that trigger an email at a particular time – for example, when the user takes an action that moves them into a new customer journey stage.
After sending your emails, it’s crucial to track performance. Tracking will enable you to determine the success of any campaign. In the context of segmentation, it will highlight whether your emails hit the perfect note for your customer groups or if further work is needed.
Review metrics such as open rates, click-through rates, conversions, and how much of your web traffic is coming from email. Ideally, you want them to be as high as possible – but it’s worth researching the industry averages to give you a benchmark.
If the results aren’t as positive as you expected, there are options you can take, including:
- Gathering more insight into your customers to make informed decisions
- Amending your segments so they’re more accurate
- Refining your offers and content to invite more conversions
- Experimenting with alternative wording and subject lines to increase engagement
Few businesses will get it right the first time. Expect to experiment with, and fine-tune different tactics, then over time, you’ll see what works best with your various segments, helping you to create more effective emails for better results.
Using segmentation will empower your email campaigns, allowing you to deliver emails that offer tailored value to every recipient.
By utilising data and logic to group your database into categories that reflect their varying needs and creating campaigns that address them, you stand a better chance of engaging customers and encouraging them to act.
The rewards are favourable performance across your KPIs, including increased open rates, conversions, higher sales volumes and stronger customer relationships.