Why You Should Be Using Email Segmentation

Did you know that segmented email campaigns drive a 760% increase in revenue for businesses? And that personalization increases email open rates by 26%?

If you did know those statistics, you’re not one of the 21% of senior marketing professionals who recently said they take a one-size-fits-all approach to email segmentation in a report from Simon Data and ClickZ. The report also indicated that most marketers who do use email segmentation use an average of two to ten segments, while only 15% use more than that.

The biggest obstacle for email segmentation seems to be time. About 30% of respondents said that the time it takes to create effective customer segments for email marketing is the main deterrent to segmentation and personalization. However, when you look at the benefits of email segmentation and learn to implement it effectively, you’ll see that the time it takes to do it right is worth it.

Why Is Email Segmentation Important?

Email segmentation is simply dividing email contacts into categories based on similarities. It allows marketers to send personalized, relevant emails to their contacts, which makes a huge difference in open rates and conversions, as you saw in the statistics mentioned at the beginning of this post.

Contacts can be divided into categories based on whatever criteria will work for your business, including geographical location, personal demographics, purchase history, or any other segments that will help you target the right audience for specific email campaigns.

When done right, email segmentation provides numerous benefits, including:

• Better brand reputation – Email segmentation can help your marketing emails reach inboxes rather than spam folders. Internet service providers (ISP) calculate how email recipients interact with their emails. If most recipients are not engaging, the ISP will see your email as unimportant and may start sending directly to spam folders.
• Reaching the right audience at the right time – Email contacts are likely at different stages within your sales cycle. It doesn’t make sense to send them all the same types of emails; they need different content based on which stage they’re in. Segmentation allows you to reach the right customers at the right time, so you won’t miss out on potential conversions.
• Improved results – Effective email segmentation may provide the following:
  • Higher click-through rates
  • Increased open rates
  • Improved deliverability
  • Increased revenue
  • Better customer engagement
  • Additional clicks
  • Reduced unsubscribe rates

Finding the Best Email Segmentation Categories for Your Business

The key to doing email segmentation right is finding the best segments for your business and your customers. How you divide up your segments is completely up to you. However, be sure that you don’t get so carried away that your segments are too specific and you’re only sending emails to a few people at a time.

While your segments must be relevant to your email contacts, some standard categories will give you a jumping-off point:

• Demographics – This includes data such as age, gender, location, job title, etc.
• Purchase history – You can use purchase history to send emails recommending similar or complementary products, maintenance add-ons or replacements, or new products or services you’re launching.
• Behavior – You can tailor segments to your contacts’ interactions with previous emails. For example, is there a group that opens your emails but doesn’t click through? A group that clicks through but doesn’t buy anything? Maybe even a group that adds products to a cart but then abandons it? Behavior segmentation allows you to reach these groups.
• Sales funnel stage – You can send targeted emails to groups of email contacts in the same positions within the sales funnel. For example, you may send an introductory email to those contacts who have just signed up to receive your newsletter.

Once you’ve determined how you will segment your contacts for email campaigns, you have to have an efficient way to organize and keep track of them. Fortunately, most email marketing software solutions offer features like lists and tags that will make it easier. Additionally, many tasks involved with segmentation can be automated, allowing you to focus on the content of your email marketing rather than constantly creating new segments manually.

Final Thoughts

Though email segmentation may take some time and effort, it is made easier with a good email marketing solution that allows you to automate many segmentation tasks. It’s an effective way to tailor email marketing campaigns to the right customers at the right time, which means increased engagement and fewer unopened emails.

How you segment your email marketing campaigns depends on your business, industry, and the types of content you send. As you determine which segments are right for you, always keep the customer’s point of view in mind – don’t segment for the sake of segmentation. Instead, do it to create better customer experiences.