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How to Build a Winning Email List Segmentation Strategy

Email List Segmentation Strategy

If you were to hand over Alladin’s magic lamp to any email marketer around you, invariably, all of them would squander their three wishes asking for one thing alone- to increase their emails’ value proposition. In this day and age of flooded inboxes, marketers are well aware that the only surefire way of catching their customers’ attention is by sending them emails that are as relevant as they are personalized.

However, in our non-Disney realities, there exist no magical shortcuts for achieving this objective. But, marketers do have access to a host of powerful and effective real-time techniques to help them fulfill their wishes, email list segmentation being one among them. 

Segmentation is a practice in which you divide your subscribers or email lists into smaller sections or “segments” on the basis of specific parameters. On the whole, it can also be interpreted as a personalization technique because it empowers marketers to send highly targeted and customized messages to their subscribers.

Subsequently, it paves the way for improved open rates, click-throughs, and conversions. That’s not all. Segmented campaigns have also been found to register 9.37% lower unsubscribe rates than non-segmented ones.

If you’re new to this practice, then you’ve reached just the right place. In this article, we look at everything you should know to become a pro at email list segmentation. All set to start your journey? Let’s dive in!

Why Email List Segmentation?

Before we learn about segmentation best practices or the things to consider while building a strategy, we must wrap our heads around the importance of email list segmentation in the first place. Let’s take a look.

Cater To Diverse Buyer Personas

At the outset, always keep in mind that each of your customers has their own set of interests and preferences. Further, not all of them will be at the same stage in your sales funnel as well. Email list segmentation saves you the blushes of sending the same emails to everyone on your subscriber list by enabling you to identify these different buyer personas. 

To understand this better, let us consider the example of an online book store. Say both you and your friend purchase five books each from this store, but from different categories. Suppose you bought your books from the non-fiction section while your friend got theirs from the fantasy shelf. Now, in their subsequent emails, if the store ends up sending recommendations of fantasy books to both you and your friend, you’ll gradually start losing interest in the store, right?

On the other hand, if the store maintains separate email lists for their non-fiction and fantasy buyers, the customers will receive book recommendations only from their preferred categories.

This is why segmentation must be a mandatory component of every business’s marketing toolkit. It lets you meet the expectations of your customers, promoting greater interaction and engagement in the process. 

Increase Conversions Through Personalization

Since email segmentation essentially lays the foundation for enhanced email personalization, it incentivizes more and more of your subscribers to interact with your content. Subsequently, this leads to increased conversions. When you send your customers personalized emails, you basically tell them that you care about their association with your brand and are not there just to do business with them. 

This goes a long way towards winning the trust and goodwill of your buyers, allowing you to amass an extremely loyal customer base. With email list segmentation, you can implement personalization at an extremely advanced level. It doesn’t just let you divide your subscribers on the first-layer parameters of gender, location, occupation, age, and the like but also allows you to delve deeper into these larger segments to specify second-layer parameters as well. For instance, you could pull out the email list for a particular location and further divide those subscribers into two sub-segments of high-spending and low-spending customers. Such micro-targeting could really skyrocket your sales and revenue.

Enhance Your Reputation

As mentioned earlier, segmented campaigns register lower unsubscribe rates and abuse reports (“report as spam” action from subscribers) in comparison to their non-segmented counterparts. As a result, they save you from getting flagged by your email providers and ISPs (Internet Service Provider). More importantly, segmentation keeps you from spamming your customers’ inboxes, enhancing your reputation by leaps and bounds in their perception. What’s more, an improved sender reputation eventually leads to higher email deliverability rates as well. 

Foster Greater Engagement By Introducing Self-segmentation

Here’s a thought- Instead of segmenting email lists yourself, how about you handed over the reins to your subscribers themselves? No need to do a double-check; you read that right. This practice is called self-segmentation, and an increasing number of companies are taking to it these days. Why? Because it is mighty effective!

To introduce self-segmentation, all you need to do is establish an email preference center. Once you have the responses at your fingertips, you can tailor your marketing campaigns accordingly. Needless to say, this not only empowers you to meet subscriber needs but also fosters greater engagement in the process. 

To understand the concept of self-segmentation better, take a look at this example from Penguin House.

Penguin House self segmentation example

Source

People visiting the Penguin Random House website are directed to the above preference center. Here, they are allowed to select the book genres of their choice and submit their responses. In subsequent times, they receive emails containing book recommendations that revolve exclusively around their chosen genres. 

Here’s another example from Buzzfeed to drive the point home.

Buzzfeed email Self segmentation example

Source

Buzzfeed deals with multiple topics ranging from science and tech to food and lifestyle. And, of course, cats. You are greeted by the above pop-up when you choose to read an article under the ‘cats’ section. Simply put, you are given a choice to sign up for only those newsletters related to your areas of interest. 

Self-segmentation is an excellent tool for improving your email performance metrics because, this way, subscribers are actively looking forward to your emails. Not to mention, it spares you from the effort of doing the segmentation on your own. Give us a better win-win situation, we’ll wait.

Leverage Dynamic Content

The use of dynamic content lets you customize different sections of a single email template. The customizations are made in alignment with the target demographic’s interests to which the emails are being sent. Email list segmentation lets you make the most of dynamic content by targeting different segments through different customizations. 

Let us once again take the example of an online book store to understand this better. Suppose you have an upcoming sale, and you want to highlight the top picks in the same. Now, such an email will typically contain the following sections- sale date, the margin of discounts, and the book suggestions or top picks, as we discussed earlier.

While the date and discounts section will remain the same across all emails, the top picks section must be made dynamic to cater to the varying preferences of your subscribers. While you’d highlight books like “Murder on the Orient Express,” “The Hound of The Baskervilles,” and “The Girl With The Dragon Tattoo” for your crime thriller lovers, for your fantasy enthusiasts, you’d cast the spotlight on books like “A Game of Thrones,” “Dune,” “The Lord of The Rings,” and the like. 

Things To Follow While Building Your Segmentation Strategy

By now, the message is loud and clear- email list segmentation is important and a central part of all successful email campaigns. Now, we move on to the next logical question. What should you keep in mind while building your segmentation strategy? Read on to find out.

Be Clear About Your Email Segmentation Goals

Before you proceed with segmenting your email lists, the most critical question you need to ask yourself is this- Why am I deploying segmentation in the first place?

Sure, segmentation helps with many things, such as driving greater interaction, boosting conversions, curbing unsubscribe rates, and the like. 

As a business, however, you must have a specific goal in mind before implementing segmentation. Are you segmenting your email lists to increase content engagement? To drive more sales, perhaps? For improving your deliverability? Or, are your goals an amalgamation of these? Whatever the case might be, you must be extremely clear about your email segmentation goals. Doing so will help you identify the segmentation practices that are most suitable for your business. 

Determine What Kind of Segmentation Aligns Best With Your Goals

Once you have clarity regarding the “why” aspect of your segmentation, you need to determine which segments will best help you accomplish your goals. For instance, if your segmentation objective is to drive greater sales, the parameters on which you would segment your email list would be customer position in the sales funnel, demographic buying tendencies, past purchases, and product interests and preferences.

Similarly, if your goal is to lower your unsubscribe rates, the parameters of your interest would be the frequency of emails sent, content preferences, audience engagement rates, and the like. As you can see, each segmentation goal requires you to focus on a different set of parameters. That’s why you must keep your end goals in mind while determining your segments. 

Select Tangible Segmentation Thresholds

In order to classify your subscribers into different segments, you first need to specify and select tangible segmentation thresholds for them. They will only qualify for a particular segment once they meet the defining criteria for the same. 

Suppose you own an eCommerce store. You want to create a segment named “interested in cutlery.” What is the threshold you set for the same? Does the customer simply need to browse the cutlery section to merit an entry, or do they need to make a couple of purchases to be classified as interested? This call depends entirely on you.

Likewise, if you want to classify someone as “uninterested,” what will be your segmentation threshold? Do you select all customers who haven’t opened your emails for the last six months? Or do you want to keep the threshold at 12 months? Defining segmentation thresholds helps you stay on top of your subscribers’ needs and expectations and plot extremely personalized marketing campaigns.

Email Segmentation Best Practices

Once you’ve identified and laid out all of your various customer segments, then the agenda shifts to creating unique email campaigns for each. But, how do you guarantee their success and maximize their returns? By implementing the following segmentation best practices. Take a look. 

Keep Things Simple

We get it, email list segmentation is a highly fascinating affair, and more often than not, you’ll be tempted to deploy complex segmentations to make the most out of your campaigns. However, you must always weigh out the returns against the time and resources you’re putting in behind crafting these complexities.

Not to mention, convoluted segmentation strategies are as confusing for your subscribers as they’re for you. Therefore, the best course of action is always to start simple. When you start with a simple segmentation strategy, you are giving yourself the benefit of having a solid foundation at your disposal. You’re allowed, of course, to add more segments down the road. 

Be Flexible

No matter how sure you are about your segmentation strategy, you should always be open to modifying it as and when the need arises. Remember, at the end of the day, segmentation rests solely upon the actions and behaviors of your customers, which are incredibly arbitrary. Hence, keep your segmentation strategies flexible. Take into account the latest insights and data and adapt to it accordingly.

Treat Each Occasion On Its Merit

If you have a segmentation strategy for the back-to-school season, don’t expect it to provide you with the same returns during the holiday season as well. This is because customer sentiment and buying behavior varies a lot from one season to another. The holiday season is especially tricky because people are actively shopping for others, not themselves.

Thus, if you really want to give a leg up to your holiday email marketing campaigns, you should consider practicing hyper-segmentation. To help you with hyper-segmentation for the holidays, we collaborated with our friends at Email on Acid to compile this neat infographic! Check it out to get a headstart on your holiday campaigns. 

Email List Hyper Segmentation infographic

Wrapping It Up

With personalization becoming a central part of all marketing campaigns these days, email list segmentation has now become the topmost priority for every email marketer out there. By letting them send out relevant and personalized emails, segmentation enables businesses to skyrocket their revenue and outshine their competitors in the process. 

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