Getting Started with Email Marketing List Segmentation
People have been predicting the demise of email marketing year after year, but the truth is, email marketing is here to stay, and for good reason!
In fact, email marketing continues to play a vital role in driving sales for organizations and consistently drives a much higher ROI than other digital channels.
Many organizations don’t give email marketing the respect and effort that it deserves. As a result, campaign results are lackluster; suffering from low open rates, poor click-through rates (CTR) and few or no measurable sales.
Luckily, there are some relatively simple things you can do to help increase the effectiveness of your email marketing campaigns. Specifically, we are going to touch on the areas of segmentation and personalization in email marketing in this blog.
Segmentation and personalization in email marketing have been around for a long time, but recent studies show that many organizations are still not utilizing it in their email campaigns. Segmentation is a relatively quick and easy step that you can do to help your offers stand out from the competition.
What is Email List Segmentation?
In simplest terms, segmentation is the process of breaking your email list into multiple groups of subscribers that have something in common. You then customize the content of your messaging to speak more directly to each segment of users and send each segment a slightly different message catered to them. Here are some different ways you can segment your user lists:
● Demographics – age, gender, family, occupation, income, education
● Geographic – geo-targeted based on country, city, language, postal code
● Behavioural – based on past products purchased, website browsing behaviour and past engagement (user provided information, opens and clicks) with previous email marketing campaigns
The process you would use to segment your audience varies depending on the email system you are using, but popular providers like MailChimp and Campaign Monitor offer built-in methods to segment your lists based on information in your subscribers’ profiles.
In a study on email marketing list segmentation conducted by MailChimp (one of the leading email marketing software providers), it was very clear that campaigns with segmented lists performed much better than non-segmented campaigns:
The trick with segmentation is to look for ways to segment your audience in a way that will allow you to tailor content specific to each segment.
For example, imagine you are a retailer with stores in multiple locations. You could segment users geographically by postal code, city or province and create content providing offers specific to a store near them. Users that don’t live near a physical location could be sent a version of the content with an online offer. Now flip that scenario, you wouldn’t want to receive offers that are not relevant to your location or situation, and neither does your audience!
Another example would be to segment users based on past purchase behaviour or by profile preferences that they have defined to send them offers based on products you know they are interested in. This can be very effective for cross-selling and increasing return purchases.
What is Email Content Personalization?
In Email Marketing, personalization comes in many flavours. It can be as simple as greeting a recipient by their first name, inserting a subscriber’s name into the subject line of an email, or dynamically inserting personalized content into an email based on information in a subscriber’s profile.
People have grown to expect some level of personalization and even a simple change like greeting them by their first name can have a significant impact on performance. Below is an interesting study on subject line personalization by industry:
Getting Started with Segmentation
So, this information is well and good, but you may be asking “how do I do it?”. The answer to this question largely depends on the email marketing platform or marketing automation system you use. In the past, this involved some heavy Excel work with Vlookup’s and pivot tables to clean up and sort user lists into segments. Luckily, modern platforms like Campaign Monitor and MailChimp allow you to segment your lists from within their systems and offer extensive help and support sections on their sites to assist you in learning how to do it. They can take what used to be a technically-complex and time-consuming process and make it pretty quick and painless.
The bigger challenge in segmenting your audience is understanding how to effectively define the segments that you want to target. How you do this depends largely on what the goals of your campaigns are. While there is no ‘one size fits all’ solution, I have included some helpful tips to help you get started.
- Keep your segments simple: There are lots of choices on how you might want to segment your list. Start with 2 or 3 basic segments so you don’t overwhelm yourself.For example, if the goal is to sell a new version of an existing product, you could segment your lists into customers that have the old version and customers that don’t. You would then develop segment-specific messaging that would target the ‘old version’ customers with “upgrade messaging” and the other segments with “introductory messaging”. Most of the content in the messaging to either of these segments might be largely the same, but a few simple tweaks will make the user feel that you are speaking directly to them rather than a generic audience.
- Know your customers: Learn and document the common traits of your highest value customers. Why do they choose you over competitors? What do they have in common? Use this information to develop buyer personas to target with your campaigns and develop segment-specific content around their interests and needs.
- You can never have too much information: Learn and document the common traits of your highest value customers. Why do they choose you over competitors? What do they have in common? Use this information to develop buyer personas to target with your campaigns and develop segment-specific content around their interests and needs.
- A/B Test different variations: A huge benefit of modern email marketing platforms is the ability to test different variations of your messaging. You can A/B test 2 different subject lines, greetings, or sections of content, for example. A/B testing is exciting and can provide you with extremely insightful and actionable information, but it is important that you test variations in a controlled way. Limit your changes to single elements and only test one at a time. This allows you to really understand what worked or didn’t so you can apply it to future campaigns.
When you combine your segmented audience and personalized copy with well executed A/B testing, you can start to get a clear picture of what works best for each targeted audience.
Walk Before You Run
List segmentation and personalization are just the beginning of things you can do to improve the performance of your email marketing campaigns. Creating and executing complex workflows, drip campaigns, automations, triggers, and integrations with CRM and Ecommerce platforms can all be layered into the mix once you have mastered segmentation and personalization of your content. But as with all things in life, it is better to do one thing really well than a bunch of things sort of well.
Take some time to look at the promotional emails you receive every day. How many of them are effectively targeted directly to you? How many have personalized content? Are you more likely to read these compared to generic unsegmented ones?
By using segmentation and personalization, your communications will stand a much better chance of reaching the right people at the right time with the information that they are ready to engage with.
We would love to hear how segmenting your campaigns has helped your performance and any other lessons you have learned optimizing the performance of your email marketing. Comment below or reach out today!