Email Segmentation: How To Create Campaigns That Convert
Updated: Aug 8, 2022
“Sign up to our newsletter and be the first to get exclusive news, content and discounts”. You see these kinds of messaged on pretty much every eCommerce site.
It's no surprise as email is one of the top 3 marketing channels in the eCommerce industry. It is primarily used to drive sales and retain customers but to what effect?
Despite all the effort marketers put into getting customers to sign up to their emails, B2C emails only average a 22% open rate. Worse yet, the average click through rate for eCommerce is a measly 2%.
Lead on an email list are generally warm leads. They have either made a purchase or supplied their email to a newsletter sign up. So, to have a conversion rate that is less search ads (2.7%) is surprising.
Why Is Email Marketing So Popular?
It mainly comes down to the ROI that email marketing offers. Yes, the conversion rate might be less than search ads, even considering the warmer leads being targeted, but search ads are costly.
Email marketing on the other hand is incredibly cost effective. Once you have built a user list (often for free or at the cost of offering a discount/offer) running emails only involves the cost of the email marketing software and the marketing staff running the emails.
With email marketing being so cost effective, it begs the question why more eCommerce stores don’t put more time and effort into creating effective personalised emails. The only additional cost would be that of staff/agency time but the results make it more than worth it.
Segmented email campaigns perform significantly better that non segmented emails. In fact, MailChimp conducted a study that showed every metric that is important to measuring the success of an email campaign is improved through email segmentation. Opens, Unique Opens and Un-Subs see slight improvements, with the real star of the show being an improvement in click through rate. It more than doubles.
Click through rate can mean a variety of different things depending on the actions you want your customers to take after seeing your email. Regardless of what the action is, the primary intention of any email marketing campaign is to get people to click through. With email segmentation more than doubling the success rate.
It’s important to note that this is a global average. With most email segmentation strategies being pretty basic, you can expect the conversion rate, as well as all the other metrics, to be increased more with a well thought out and defined email segmentation and personalisation strategy.
Let’s look into the different data points that can contribute to email segmentation strategy.
What Data To Leverage Effective For Effective Email Segmentation
There is no ‘holy grail’ of data that can be used for email segmentation and personalisation. In reality, any data that can be tied to an email address could technically be used for segmentation. That doesn’t mean that any data that can be tied to an email address should be used for email segmentation.
Generally, the more data you have about your customers, the more able you are to segment your audience. But, what data should be used and how to segment your audience will vary depending on the product or service you offer, the data you are able to collect or the aims of your email marketing campaigns.
For example, here at Bazar, we collect a user's email address and demographic information when they sign up. But more importantly, we collect what product categories our users are interested in. We then segment our audience based on their gender and what categories interest them and only email them discount codes from our retail partners that fit their interests.
I have included some data points and segment ideas that your brand could leverage below.
Demographic data is data that quantifies characteristics of a person , such as age, gender, birthplace, employment status, and salary. These are your fundamental segments; they enable you to group users without going into great detail about their hobbies and previous purchasing behaviour.
Demographic segmentation is the first step of segmentation and can provide a lot of value in itself. For example, Johnny Cupcakes, a clothing company, witnessed a 42 percent boost in clickthrough rate, 123 percent more conversions, and a 141 percent gain in income for each email campaign simply by segmenting their list into male and female clients. Using a simple two part segmentation still provided such impressive results.
Consider using the following demographic categories as the foundation for your list segmentation:
Gender: Asos sells clothes for both men and women but they aren't going to get my attention (or clicks) as a male if they are pushing me with their latest pair of jeggings. Understand that men and women shop differently and your marketing should reflect that.
Location: Location is more important for some email campaigns than others. For companies with brick and mortar locations, it is a great way to notify customers about openings or store offers in locations nearby. Even for online retailers, location can help you learn more about what people are interested in, although, this is mainly for larger retailers with a more significant dataset.
Average Income: Understanding the average income of your customers is a great way to segment your audience. For those on a lower income bracket, you may want to pay more attention to offering them lucrative discounts and offers. Whereas those on higher income brackets may be nurtured through content such as the sustainability practices of a brand.
Once you have understood who is buying your products, the next step is to try and figure out why and how. Are people buying your products as gifts? If so, for who? Do they only ever visit one area of your website? Are they only interested in one type of product you offer? All this data can be used to step up your game with email segmentation. Check the types of segments below to see how you can segment customers based on their behaviour:
What your customers they do with your product: Knowing what areas of the site your customers are navigating, allows you to send personalised emails based on the products they are interested in. To go one step further, try and send them content on how to get the best value out of that product. For example ,if someone is browsing tablets, send them an email/video/blog on “ten cool things you can do with a tablet that you didn’t know about”. It’s not always about pushing products, but instead pushing value.
What your customers buy: Amazon is a prime example (pardon the pun) of a company that does this extremely well. Looking at what your customers buy is the best way to get them to buy more by recommending complementary products. Just bought a tablet? How about this case to keep it safe.
When your customers last clicked on an email: Click frequency tells you who your most engaged audiences are but also lets you know those who don’t want to be bothered. Click frequency should also be used to see what your most effective email types are. If your product emails are getting almost no traction but your blog emails have a high click through rate, then double down on content. Email marketing isn’t just about driving sales. It’s about brand building and building an engaged customer base.
Purchase Intent: Purchase intent is usually referred to how likely someone is to buy a product. But, in this context purchase intent is referred to as the reason behind someone's interest in purchasing. For example, if you are selling supplements you could try and understand whether someone is interested in increasing sports performance, helping with sleep, reducing stress, etc. Understanding the reason behind someones purchase helps you send more relevant information to that customer.
Customer Sign Up Date
Each of your customers is at a different stage of the sales process; some have been using you for a long time, while others are completely unaware of what you do. You must communicate differently to these different types of people. Would you give the same speech about Solar Eclipses to a Harvard graduate student and a third-grader? Most likely not.
You can determine how familiar your audience is with your brand, what they already know, and what they still need to learn by segmenting your list according to how long each person has been a member of your website.
Onboarding new customers: Your first email is the most important. They often have open rates in excess of 50% as opposed to the average of 20%. You want to set expectations about the purpose of your emails and introduce them to your brand. It’s not just about the first email but the whole sequence. Bore your customers, annoy them with too many emails or send them irrelevant content and you will likely find them unsubscribing. Here, segmentation through demographic and behavioural data can make the difference.
Rewarding your best customers: For eCommerce stores, great ways to reward your best customers can be to offer discounts on their birthdays (Nike does this very well) or even on the anniversary of their first purchase.
Getting Started With Segmenting Your Email List
Effective list segmentation can boost your email marketing efforts, but getting started can be challenging. If you have email segmentation in place, but want to delve deeper into customer demographics and behaviours to make your email segmentation more effective, the thought of it can be daunting. I think that is why most eCommerce stores don’t have an effective email personalisation strategy because it seems scary to adopt.
If you don't have a plan, what started as a single-list operation or basic segmentation can quickly deteriorate into a confusing jumble of email messages.
If you're unsure of where to start, consider these six steps and attempt to design a flow that would be suitable for your segmented email marketing campaigns.
1. Define Your Data Points
First things first, without data, you cannot create segments. What data will matter most to your business will depend on the type of goods your business sells, and your company goals
Decide what customer data will help you market more effectively, how you're going to arrange that data, and how you're going to obtain the data you don't already have before you start segmenting.
A major objective here is to move visitors into the activation step of your sales funnel, whether that involves convincing them to make a purchase or make use of a particular feature. Therefore, to maximise your email marketing, concentrate on streamlining your data collection procedures so that it fits what your conversion objectives are.
Respond to these three points:
What information are we already gathering? - These categories have the lowest entry barriers for you.
What information can we begin gathering? These are data points that you can track, but you haven't yet compiled into a meaningful form of knowledge.
You won't have all the data you need, and sometimes the tests you want to conduct won't be supported by your present data-gathering system. When that happens, you must enlist the aid of development personnel or use third-party tool's such as bazar. Bazar lets you collect user demographic information as well as ask your customers what frequency they like to receive emails, what emails they are interested in and other behavioural insights.
2. Create Your Customer Persona’s
Every business needs to be aware of who their ideal customers are, whether they are mothers, college students, beer snobs, audiophiles, lobster fisherman, or anybody else. Not every business goes to great lengths to develop personas and they are often based on assumptions.
The foundation of your list segmentation is provided by your customer personas, which assist you in determining which segments require specific messages. Try to respond to these HubSpot questions in order to create a useful customer persona:
What details about this customer's demographics do you know?
What are the customer's pain points?
What do they hope to achieve (and how can I assist them in doing so)?
What does a typical day in their life entail?
The problem a lot of retailers face with understanding their buyer personas is they leave a lot of the answers to the above questions up to guesswork. Demographics might be somewhat accessible from a basic level from tools such as Google Analytics, but the rest of the answers are often backed by the thoughts and opinions of an eCommerce brand's staff and the third party research they conduct.
To create an effective buyer persona you need to quantify the answers to these questions by speaking to your customers and finding out first hand what they think.
3. Select Your Segments
Now that you have the data to support you in who your customers are and what they want from you, it's time to start experimenting with some email segments. You should feel free to come up with your own strategies based on the specific knowledge you have about your target market. You can also take inspiration from success stories and case studies, but try not to outright copy these and adapt it to your data/brand.
4. Create Your Content
Now you have your email segments, it is time to start creating the right content for each of your segments. You don’t necessarily need specifically designed content for each of the segments. You can think of content ideas and repurpose them for different segments. For example two segments might be both interested in the same topic but one may prefer long forms of content in emails whereas the other likes emails to be brief. You could then write a blog about the topic of interest and repurpose it in an email for those that enjoy longer form content, for the other group, you could summarise the key points from the blog in the email and then provide a link to the full blog that they can click and read in detail if they so choose.
Simple tips like this, that are not time consuming in terms of content creation, are key to creating an email list that are engaged and are likely to open your emails.
5. Employ Your Email Marketing Tool’s Segmentation Feature
All the major email marketing tools offer segmentation features (if yours doesn’t you have plenty to choose from).
Segmenting your audience effectively is key to making segmented email marketing campaigns that work. Here, you want to create tags based on the data you have collected and assign each new user a tag based on the information you have from them. Once users are tagged, they will automatically go into the relevant segmented audiences and then it is as simple as sending each campaign individually.
6. Measure, Test, Repeat
Now that your emails are public, you can gather new types of information. Be careful to keep track of how recipients respond to your emails by seeing what they open, what links they click, and what kinds of material engage them.
Use the information you learn from crunching the stats to make future efforts more effective. Sending more emails at around 2 p.m. would be a good idea if open rates spiked after lunch. Apply more pictures to your messaging if you noticed that emails with images had higher click-through rates.
A/B testing helps the learning process because it's so simple to divide any list into "A" and "B" groups. These trials go hand in hand with email marketing.
Make incremental adjustments going forward and test them against your current emails. Be sure to do this on a segment by segment basis. Be careful not to blindly apply what works on one segment with another with the assumption that it will work the same. It may or may not, this is why measuring each segment individually is crucial.
The stats don’t lie. Segmenting your email campaigns and personalising emails based on people’s preferences is going to improve the effectiveness of your email marketing.
It can be a daunting thought at first. Having to think about what data to collect and more importantly how to make use of that data can seem like a lot of work.
What you have to do is simply take a step back. Think about what results you would like from email marketing. This shouldn't be just a broad goals such as to ‘simply increase sales’ but think of the kind of value and connection you want to make with your customers.
It is therefore important to speak with your customers. Tools such as bazar lets you get direct insights from your customers whilst also obtaining their email address. You want to learn about their demographics but equally, if not more, importantly identify behaviours about your customers. Do this to build robust customer personas.
Then ask what type of content your customers would like and how frequently they like to receive this type of content.
With all this information at hand, you can build out different segments and start assigning your customers to each segment based on the data you have about them.
Finally be sure to always be testing to find the ideal email format, content, CTA, etc. Do this for each segment specifically and watch the results start coming in.