Why Segmentation is Key in Email Marketing - Bumper Leads

Why Segmentation is Key in Email Marketing

 

In our fast-paced digital landscape, email marketing remains a crucial tactic for businesses, regardless of their size. Amid the deluge of daily emails, small business owners face the challenge of making their messages truly shine and connect with their audience. Enter segmentation—the secret sauce that can transform your email campaigns! In this post, we explore the pivotal role of segmentation in email marketing and share best practices that can significantly enhance your campaign’s effectiveness.

But first, what do we mean when we say ‘segmentation’?

Segmentation in email marketing refers to the process of dividing your email list into smaller, more targeted groups based on specific criteria such as demographics, interests, or purchasing behaviour. By tailoring your email content to cater to the unique needs and preferences of each segment, you can significantly improve open rates, click-through rates, and overall campaign performance.

In this article, we will delve deeper into the importance of segmentation in email marketing and explore how it can unlock success for your brand. We discuss the benefits of segmentation, strategies for effective segmentation, and real-life examples of successful segmented email campaigns. 

(By the way, we have covered extensively on the topic of segmentation in the past, click the followinG link to read more about “Simplifying Sales and Marketing Strategies with Customer Segmentation”)

 

Why is segmentation important in email marketing?

 

Segmentation is a fundamental aspect of email marketing that allows businesses to personalise their communication and deliver relevant content to their subscribers. By dividing your email list into smaller segments, you can ensure that each recipient receives messages that are tailored to their specific needs and preferences.

I’m surprised that the small business owners still struggle with list segmentation. If you need help with segmentation, please don’t hesitate to reach out to us

One of the primary reasons why segmentation is important is that it helps increase engagement with your email campaigns. When subscribers receive content that is relevant to their interests and needs, they are more likely to open the email, click on links, and take the desired action.

This increased engagement translates into higher conversion rates and ultimately boosts your overall email marketing success.

Put simply, higher open rates equal higher revenue for your store. 

According to DMA, 25% of revenue share comes from a segmented list of emails, and sending targeted emails to these segments brings 30% of revenue.

Another reason why segmentation is crucial is that it allows you to avoid sending irrelevant content to your subscribers. Sending generic, one-size-fits-all emails can lead to disengagement and even unsubscribes. 

How many times have you received an email and thought ‘this is not relevant to me?’

I’m subscribed to some online stores that send me ‘baby clothes’ from time to time, but I’m only interested in their ‘Women’ fashion category. Honestly, those stores could use a little chat with Bumper Leads. *wink, wink.*

By segmenting your email list, you can ensure that each recipient receives information that is valuable to them, increasing the chances of building a strong relationship with your audience. 

Your subscribers are more likely to stick around when they receive the content they’re interested in.

Let’s look at some more benefits of email marketing segmentation.

 

Benefits of email segmentation

 

Email segmentation offers a multitude of benefits for businesses looking to optimise their email marketing efforts. I’d like to walk you through some of the key advantages that segmentation brings to the table:

 

  • Improved relevancy: As we’ve described above, segmentation allows you to send highly targeted emails to specific groups of subscribers. By tailoring your content to align with the interests, preferences, and needs of each segment, you can deliver more relevant messages that resonate with your audience. This increased relevancy leads to higher open rates, click-through rates, and ultimately, conversions.

 

  • Enhanced Personalisation: Personalisation is a powerful marketing strategy that can significantly impact the success of your email campaigns. By segmenting your email list, you can create personalised experiences for each segment, addressing them by name, recommending products based on their previous purchases or browsing history, and tailoring the content to match their specific preferences. This level of personalisation makes your subscribers feel valued and understood, increasing their engagement and loyalty. Most email marketing tools allow you to segment your audiences, for example we love working with ActiveCampaign and Klaviyo, just to name a couple.

 

  • Increased conversion rates: When you deliver targeted, relevant content to your subscribers, you are more likely to drive conversions. Segmentation allows you to send emails that speak directly to the needs and pain points of each segment, increasing the chances of recipients taking the desired action. Whether it’s making a purchase, signing up for a webinar, or downloading a resource, segmentation helps optimise your email campaigns for better conversion rates.

 

  • Better customer retention: By segmenting your email list based on customer behaviour, you can create campaigns that target specific stages of the customer journey. For example, you can send personalised onboarding emails to new customers, nurture leads with educational content, or re-engage inactive subscribers with special offers. This tailored approach to customer retention strengthens the relationship with your audience, increases customer satisfaction, and reduces churn.

 

  • Cost-effective marketing: Email segmentation allows you to maximise the ROI of your email marketing efforts. By sending targeted emails to specific segments, you can reduce the number of unsubscribes, lower your email bounce rate, and improve the overall efficiency of your campaigns. This means you can achieve better results without investing additional resources, making segmentation a cost-effective strategy for driving success. To learn more about how to avoid unsubscribes and Spam folder refer to our article called 5 Tips to Dodge the Dreaded Spam Folder.

 

Let’s now look at how to segment your email list effectively.

 

How to segment your email list effectively

 

While the benefits of email segmentation are clear, it’s essential to understand how to segment your email list effectively. Here are some strategies to help you get started:

 

  • Collect relevant data: To segment your email list, you need to gather the right data. This can include demographic information, purchase history, website interactions, or any other data points that are relevant to your business. Use sign-up forms, surveys, and customer tracking tools to collect the necessary data and ensure it is stored securely. Most Email Marketing platforms have a way of collecting customer data to help with segmentation.

 

  • Define your segments: Once you have collected the data, analyse it to identify common patterns and characteristics. Group your subscribers into segments based on shared attributes such as age, location, interests, purchasing behaviour, or engagement level. The key is to create segments that are meaningful and allow you to deliver targeted content. As a bare minimum, create segments that capture how engaged your subscribers are – e.g when was the last time they opened your emails? Was it 30 days ago, 60 or 90 days ago? Then start planning campaigns to win them back.

 

  • Segment based on behaviour: Behavioural segmentation is a powerful strategy that involves categorising subscribers based on their actions, such as website visits, product views, or purchase history. This type of segmentation allows you to send highly targeted emails based on specific actions or inactions, increasing the chances of driving conversions.

 

  • Utilise dynamic segmentation: Dynamic segmentation is a more advanced approach that involves segmenting your list in real-time based on constantly changing criteria. For example, you can create a segment of subscribers who have abandoned their shopping carts and send them automated cart recovery emails. Dynamic segmentation ensures that your campaigns are always up-to-date and relevant.

 

  • Test and refine your segments: Segmentation is not a one-time task. It’s essential to continuously test and refine your segments to ensure they are effective and deliver the desired results. Analyse the performance of your campaigns, gather feedback from your audience, and make data-driven adjustments to optimise your segments over time.


Source: * According to McKinsey, 76% of readers are more likely to make a purchase with brands that send personalised emails. And 78% of readers are more likely to repurchase from the same brands.

 

Example of Effective Segmentation

 

Imagine you run a local pet supply store. Through segmentation, you could send tailored email campaigns to dog owners about promotions on dog food, while cat owners receive information on new cat toys. Additionally, you could identify customers who frequently purchase pet grooming services and offer them a discount for their loyalty.

Another example would be to segment based on customer lifetime value (CLV). We call these contacts VIPs – Very Important People. Customers with a higher CLV might get exclusive access to new products or special events, incentivising them to continue doing business with you. This is how you retain your best customers.

 

Examples of successful segmented email campaigns

 

To understand the power of segmentation in email marketing, let’s explore some real-life examples of successful segmented email campaigns:

 

  • Clothing retailer: A clothing retailer segments its email list based on gender and purchase history. They send targeted emails to female customers who have previously purchased dresses, showcasing new arrivals and offering exclusive discounts. By tailoring their emails to the specific interests of each segment, the retailer sees an increase in open rates, click-through rates, and conversions. I’ve had plenty of emails that are not relevant to my interests and preferences!  I’m sure you have your own personal experience with this, too.

 

  • Software company: A software company segments its email list based on the customer’s lifecycle stage. They send onboarding emails to new customers, providing them with resources and tutorials to ensure a smooth start. For active customers, they send personalised tips and tricks to help them maximise the value of the software. This segmentation strategy improves customer satisfaction, reduces churn, and increases upsell opportunities.

 

  • Travel agency: A travel agency segments its email list based on the subscriber’s preferred travel destinations. They send targeted emails featuring vacation packages, deals, and travel tips specific to each destination. By tailoring the content to match the recipient’s interests, the travel agency achieves higher engagement, increased bookings, and customer loyalty.

 

I find it quite surprising that even in this day and age, I continue to receive irrelevant promotional emails from brands. For instance, if I’d been purchasing size 36 (EU) shoes for years from one online store, you’d think they’d catch on and send me emails tailored to my ‘preferences’ already? Have you had the same experience with other brands?


Source: According to Mailchimp, segmented campaigns have over 100% higher click-through-rates. Higher CTRs = more revenue for your store.

OVER TO YOU

 

In this post, we’ve delved into the power of segmentation in email marketing. By dividing your email list into smaller, more targeted segments, you can deliver highly relevant content to your subscribers, increase engagement, and drive conversions. The benefits of segmentation are numerous, including improved relevancy, enhanced personalisation, increased conversion rates, better customer retention, and cost-effective marketing.

Leverage tools and software, such as ActiveCampaign, HubSpot or Klaviyo, to manage and analyse your email list effectively. Avoid common mistakes, such as over-segmentation, neglecting data accuracy, lack of testing, and ignoring feedback and preferences, to ensure the success of your segmentation efforts.

If you’re stuck on how to segment effectively using the platforms like ActiveCampaign or Klaviyo, reach out to us, we can help. This is exactly what we do here at Bumper Leads. Take a peek at some of our previous clients and success stories to see how we can assist you.

Remember, by delivering the right message to the right people at the right time, you can create highly targeted campaigns that resonate with your audience, drive engagement, and achieve your business goals, i.e drive conversions.

 

FURTHER READING

How to Use Segmentation to Ensure Your Emails Get Opened and Read

4 Reasons Why Email Marketing Is Important

Best Email Engagement and Website Conversion Metrics to Follow for Small Business Owners

3 Ways to Increase Conversion Rates with Automated Emails

 

Milena Vujnic

Milena Vujnic

eCommerce Strategist at Bumper Leads

 

Milena loves helping small business owners grow their business through smart systems and automations.

Milena lives in Adelaide, Australia with her Chileno husband and her best friend Netflix. She suffers from mild email OCD, ie hates small font and cluttered newsletters. Milena is on a mission to make online business a less confusing place for a business owner.

She loves anything podcasting, eCommerce and is honoured to be supporting clients all over the world with her coaching.

You can follow Milena on Twitter (@MilenaTheGreat)

 

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