Email marketing provides the unique opportunity to speak to your audience on a one-to-one basis. To truly personalize your message and receive the largest ROI, you have to build and maintain sophisticated intelligence about your customers.
You have to go deeper than just understanding ‘open’ and ‘click through’ rates. You need to track your customers’ buying behavior, levels and specifics of their engagement with your marketing and your business. You also have to understand the person in demographic and social profiles, to really understand and influence their loyalty through your email marketing.
It's no longer enough for you to collect email addresses and send out newsletters. If you intend to convert readers to paying customers, you need to segment your database.
What is Segmentation?
Simply put, segmentation is dividing your email list into subgroups so that you can then target emails to each of those subgroups. Although this may sound like a lot of extra work, it isn’t that difficult and it will increase both your open rates and your conversion rates. According to Fulcrum Tech Crunch, 39 percent of marketers who segmented their email lists experienced higher open rates, and 24 percent experienced higher revenue rates.
Segmentation Tip #1: Identify Your Target Markets
It can be overwhelming to try to segment a big database, especially if you aren’t sure which metrics matter, or if categories overlap. But at the root of the success of any email marketing campaign is a close and detailed understanding of the target customer. What information can be mined about purchasing patterns, engagement with email marketing and social media, browsing patterns and propensities, and online choices?
It’s important to begin by identifying (and documenting) exactly who your target markets are. Once you know that, you can examine your database and see which market each subscriber best fits into.
If you need help identifying your organization’s Buyer Personas, download our quick guide.
Segmentation Tip #2: Examine Subscriber Behavior
One effective means of segmentation is to separate those who are active from those who are inactive. Your inactive subscribers–those who haven’t opened, responded to or otherwise engaged with your emails for six months or more–need to get excited about your business all over again. You can create emails specifically for these people with compelling content and special offers for returning customers. Similarly, you can target emails that thank customers for their loyalty or offer exclusive deals to those who shop with you often to your active subscriber list.
Segmentation Tip #3: Personalize Offers as Much as Possible
The purpose of segmentation is to help establish personal relationships with customers by providing them with content they will be extremely interested in.
Some online retailers take it a step further; Marketingland tells the story of how one company sent personalized emails to people based on their email address’ domain. This one-on-one campaign paid off; the company increased its revenue by 35 percent over its less personal campaigns.
In order to personalize campaigns, look at things like what email your subscribers use, how they came across your list or where they live. If possible, check out the customers’ previous purchases at your store. This information can all be used to segment your emails and provide customers with a one-on-one experience.
Segmentation Tip #4: Monitor Behavior on your Website
Using Marketing Automation will allow you to track what content your subscribers look at over time, which then allows you to get a sense of each subscriber’s interests. For example, here at Mediacurrent we take note of what topics leads are most interested in based on their interactions with our website. So if one segment is extremely interested in mobile web strategies, while others are far more interested in content marketing, we offer similar content to them through email campaigns. In short, take a look at what content on your website gets people clicking, and segment your list based on that.
Segmentation Tip #5: If All Else Fails, Start Small
By identifying your target markets and examining as much information about your subscribers as possible, you should be able to segment them appropriately. If you have a large subscriber list, the idea of segmentation can seem overwhelming. In this case, start small. Instead of trying to segment every subscriber perfectly, start with one key factor that you think influences your customers’ choices. You could segment by age, gender, location or another basic demographic in order to jump-start your segmentation campaign.
It can be hard to put your segmentation campaign into practice if you aren’t sure what to do, which is why starting small is such a good idea. However, it’s important not to stop your campaign there. Keep evaluating your analytics as well as your subscriber base so that you can continually refine your segmentation campaign and target your emails towards the people who will most benefit from them.