Here at SmartMail, we assist many ecommerce businesses and other companies with their email marketing campaigns. One of the key strategies that we recommend to ensure more effective emails and higher returns on investment is list segmentation.
In this article, we’ll explain what list segmentation is, why it’s important, its many benefits and even how to segment email lists for yourself.
What is List Segmentation?
If you’re an ecommerce business or even a company operating in the 21st Century in any industry, you’ll likely have a list of potential customers or clients to whom you market your offerings via email.
This list can be vast and varied in its contents. The process of list segmentation in email marketing is the division of an email list into smaller subgroups based on specific behaviors or characteristics of that group. The aim is to create narrower and more targeted email lists to allow for more directed and effective email campaigns.
How are Lists Segmented?
There are a variety of characteristics that can be focused on when segmenting an email marketing list.
You can create subgroups based on anything from demographic data such as age, gender identity and location, or even behavioral data, such as purchase history of past clicks on your email campaigns.
Why is List Segmentation Important?
When it comes to email marketing, the more personalized and relevant the message is in your email the higher the chances of customer engagement and potential conversion to an actual sale or subscription.
List segmentation enables you to send highly targeted marketing messages to specific groups of stakeholders. You can tailor the email itself according to their needs, interests or other characteristics. Effectively done, this will result in higher email open rates, increased Click-Through-Rates (CTR), and more conversions.
There is another advantage to list segmentation. A/B testing–the practice of trialing multiple versions of the same marketing message–can be more easily conducted. You can trial different email marketing templates with different audiences and measure the performance of each one for ongoing development and improvement.
How are Lists Segmented?
There are a variety of characteristics that can be focused on when segmenting an email marketing list.
You can create subgroups based on anything from demographic data such as age, gender identity and location, or even behavioral data, such as purchase history of past clicks on your email campaigns.
Why is List Segmentation Important?
When it comes to email marketing, the more personalized and relevant the message is in your email the higher the chances of customer engagement and potential conversion to an actual sale or subscription.
List segmentation enables you to send highly targeted marketing messages to specific groups of stakeholders. You can tailor the email itself according to their needs, interests or other characteristics. Effectively done, this will result in higher email open rates, increased Click-Through-Rates (CTR), and more conversions.
There is another advantage to list segmentation. A/B testing–the practice of trialing multiple versions of the same marketing message–can be more easily conducted. You can trial different email marketing templates with different audiences and measure the performance of each one for ongoing development and improvement.
The Benefits of Email Marketing Segmentation
- Higher return on investment.
- Greater likelihood of open rates.
- Increased Click-Through-Rates.
- Less unsubscribes and email spam reports.
- More conversions and sales.
- Highly targeted marketing campaigns.
- Better quality engagement.
- More effective marketing.
How to Segment Email Lists
When you work with the SmartMail team, we’ll work collaboratively with you to segment your email list in a way that works best for your marketing goals. There are multiple ways to segment email lists, including the following:
Demographic Segmentation
Demographic characteristics of an audience can include just about anything about them. It can range from where they live to their age, gender, income, level of education, romantic status and more.
The demographic factors of a segmented list can provide insight into how they behave, what their preferences are and what sort of email marketing you should be sending out.
Behavioral Segmentation
How your target audience has behaved can really influence how you should best approach them in your email marketing.
Knowing that you’re emailing a segmented list of customers who have recently purchased a product from your ecommerce store will make a big difference to the content and style of your email, while emailing individuals who have only subscribed to your newsletter but not made a purchase may require a differently designed marketing email.
Email engagement is another example of behavioral email list segmentation. Those customers or would-be customers who actively open and click on your email provide a unique opportunity for further engagement, while those who do not may require a more direct and enticing marketing campaign to successfully convert them into paying customers.
Psychographic Segmentation
Psychographic segmentation is based on the psychological characteristics or lifestyles of your email audience. This can include their interests, hobbies, attitude, opinions, and values. When known, even personality traits can be used to inform how you segment your list.
Like segmenting demographically, psychographic segmentation allows you to craft an email campaign that will be more relevant and suited to the specific psychological interests of the group in question, and in turn be more effective in achieving your goals.
Best Practices and Email Marketing Segmentation Examples
1. Keep Your Segments Simple
Keeping your list segmentation clear and simple will allow you to highly focus your email campaign to ensure better results.
For example, with Browze, the SmartMail team helped to curate a Welcome Sequence email campaign specifically for new users to help this re-branded company expand their revenue. The result of keeping the segments simply? A 27x return on investment. You can read the full case study here.
2. Test and Refine Your Segments
List segmentation is hardly ever a one-and-done solution. As you receive feedback from email campaigns you can further refine your lists and improve your email.
That’s why here at SmartMail we conduct email campaign management as well as email automation set-up. Ongoing testing and refining of both list segmentation and the respective email marketing campaigns has allowed us to help clients like LionParts increase email revenue by 600%!
3. Ensure Accurate and Updated Data
Your list segmentation’s success depends on your ability to collect and utilize accurate and updated data.
The success of our email campaign for Digital Supply USA was due to our implementation of advanced filters based on accurate data to target visitors to the company’s most profitable product pages. The end result was a 325% increase in email conversion rate!
4. Customize Your Messages for Each Segment
Without effective marketing message customization, list segmentation is a waste of time and resources!
For Millers, a women’s retailer, we created and rolled out a behavioral automation program that was based on abandoned carts and other highly specific behavioral factors. By doing so and tailoring the messages for this segment, we achieved a 540% increase in revenue for our client.
5. Avoid Over-Segmentation
Over-segmentation is when you segment your list into so many subcategories that the subgroups are too small or narrowly defined for effective marketing.
For example, when we helped our client Natural Farm increase their site-wide revenue by 40% we worked hard to ensure that we properly targeted our email campaigns without overly-segmenting our audience based on the many, many different factors available in the pet products target market.
Find out more about List Segmentation
Knowing how to segment email lists effectively can be a critical factor in the success of your email marketing.
Fortunately, you don’t have to do it alone! The experts here at SmartMail are experienced in all things ecommerce emails, including how to effectively segment mailing lists. If you’d like to find out more about the case studies mentioned above, want to know more about how list segmentation can assist your company, or just want us to conduct a 100% free email audit for you, make sure to contact our team today.
