What Is Email Segmentation, and Why Is It Important?

What Is Email Segmentation, and Why Is It Important?

According to the Radicati Group, over 205 billion emails were sent every day in 2015. By next year—2019—that’s going to grow to 246 billion. That’s a whole lot of colourful spam emails and paint-by-numbers newsletters. If you want to be seen in the midst of all this white noise, you have to start delivering more value to potential customers.

email segmentation

One way to do just that is with email segmentation, sending out targeted emails to targeted groups. It’s a simple concept in theory, but less so in practice, especially since successful marketing teams aren’t going to want to share their secrets! But that’s what this guide is for: to give you the low-down on everything you need to know about:

  • Why email segmentation is more important than you realise,
  • The different types of market segmentation, and how exactly they work in practice,
  • The impact of segmentation done right…

…And common mistakes that we can help you to avoid. Let’s get cracking!

Why Is Email Segmentation Important?

The basic point of email segmentation is that it helps you to do what you do, but better. As a marketing expert, you’re no doubt always on the lookout for a way to make a product or service relevant and compelling; using email marketing segmentation is going to help you sell more of whatever you’re selling.

The best thing about it is that you use data that’s already available, or easily available to you. You can use data you ask for from customers when they sign up, website analytics to see what they do on your site, responses to prize-draw quizzes—anything that might be useful. So, really, there’s no reason not to be segmenting your email list already.

What Kinds of Email Segmentation Are There?

There are plenty of ways to segment your email list. Let’s randomly say that you’re trying to sell bicycles and biking accessories, and you’ve got a nice long email list filled with all sorts of people. These are just three of the ways you could segment it, and why each method is so effective.

  1. Age: Dividing your list by age is probably the simplest way of segmenting an email list, not least because it’s one of the few things customers don’t mind sharing when they sign up to something. could mountain bikes and BMX’s to younger cohorts, and safety equipment like helmets and knee-pads to parents.
  2. Gender: Again, your sign-up form is most likely going to ask for gender already, so this is one way you can probably segment the list you already have without having to change a thing. Society is changing fast, but that doesn’t mean that men and women respond differently to different marketing techniques and different products. It’s as simple as marketing women’s bikes to women and men’s bikes to men!
  3. Customer tiers: this involves a little analysis and a little more data collection, so it’s something you might have to work towards rather than being able to implement it straight away. But segmenting your email list based on what kind of customer each cohort is highly effective. Here’s a few examples: those that registered this week, those who are probably about to churn, big spenders, ‘little’ spenders, regular customers and long-time users… The list goes on.

Other ways of segmenting your email list include:

  • Customers who regularly open your emails VS. those that don’t
  • Ethnic and social background
  • Which kinds of products they’ve previously bought
  • Geographic location
  • Their interests when they interact with your site (e.g. browsing plenty of products, reading your company blog, watching how-to videos)
  • How long since they last bought something

The Impact of Email Segmentation

Don’t believe segmentation is worth it? Let’s talk numbers. Research group MarketingSherpa have done plenty of research into segmentation, and come up with some really interesting results. Apparently, four out of every ten people subscribed to email lists immediately mark emails as spam because they think they aren’t relevant. That can be the price of sending just one email that isn’t tailored to your audience.

They also found that businesses which do use email marketing segmentation enjoy a 50% increase in their clickthrough rates versus those that don’t. The Direct Marketing Association found that marketers achieve an incredible 760% revenue increase (yep- seven hundred and sixty percent!) from segmented campaigns. If that’s not enough to convince you, we don’t know what will.

Top 3 Common Mistakes to Learn From and Avoid

Like most things marketing, you won’t be the first to try email segmentation. And just as it’s important to learn from what has worked, it’s important to avoid common email segmentation problems too. Here are the top three rookie errors

  1. Not Double Checking the Accuracy of Your Data
    Even worse than getting a non-personalised email is getting one that’s personalised, but puts the customer in the wrong group! It isn’t possible to completely avoid these problems without double checking the data at source, or in other words, asking the customer to provide more data on themselves—and let’s face it, few will. Instead, cross reference the data you already have, addresses being a great example. Do the customer’s city, county, country and postcode match up?
  2. Don’t Go Overboard With Your Segments
    Everyone knows about getting too much of a good thing. Email segmentation is no different. Take age: breaking your customers down into five different age-based cohorts will get you results, but breaking them down into twenty groups will see you reaping diminished returns.
  3. Analyse Everything Last but not least, you have to remember to analyse everything you do. Whether you choose to do that with your own data or through a CRM is up to you—but using CRM software is quicker and easier. Running campaigns side by side is going to let you see what works with your audience (and what doesn’t), which will help you refine what you do, and to do it better.

What you should be picking up is that email segmentation isn’t necessarily complex, but it does require some nuance, some subtlety. There are so many different ways of breaking down your audience, from age to how they interact with your site; not all of them will be relevant for you. But that’s something you have to research and discover for yourself!