Email Marketing Segmentation: Stop Blasting Your Customers

The company I work for is always trying to improve its email marketing campaigns  – and we have seen improvement over the last three years, in part because of email marketing segmentation.

Email marketing segmentation can lead to better results in your email campaigns; improving open and click rates and lower unsubscribe rates. Without segmentation, you are throwing a glass of water on a burning building instead of concentrating on the hotspots of the fire. Today, I will show why you need to segment your email list and give you some ideas on ways to segment your market.

Email marketing segmentation just works

In a recent study by Smart Insights they report “almost half (44%) of marketers don’t segment their email list.” Email segmentation is a powerful tool in email marketing but it is not widely used.  One reason could be dues to the fact of time; it takes time and effort to look at your customer data and get meaningful insight from that data.

According to HubSpot, “39% of marketers who segmented their email lists experienced higher open rates, 28% experienced lower unsubscribe rates, and 24% experienced better deliverability and greater revenue.” Simarly, in a recent study by MailChimp, open rates improved by more than 18% and click rates by more than 21%.

How to Segment

When we think about email marketing segmentation, we often think long demographic lines: race, country, gender, age, geographic location, and address. What we neglect to think about are other ways we can use data to segment our email lists. According to ExactTarget, a few alternatives to demographics are behaviour, sales cycle, email preferences, and loyalty programs.

I regularly subscribe to enewsletters both professionally and privately.  It never ceases to amaze me when companies neglect to learn enough about me to use data to their benefit.

One company, I will call them Mr. Man, where I shop regularly offers both men’s and women’s clothing and home decorating goods. When you shop with them they keep detail records of your purchasing habits (also known as behaviour).  I have never purchased anything from Mr. Man except men’s clothing and a few home decorating goods. Mr. Man always sends me enewsletters for women’s clothing and never anything about the men’s clothing or home decorating goods. When I get these newsletters, I simply delete them instead of opening them as I know they are not relevant to my needs. Mr. Man could use their data, past purchase history, to improve email communications through email marketing segmentation.

For professional purposes, I subscribe to lots of newsletters about marketing and research data. Three years ago I purchased a report from one of these companies about the medical device market. I have since moved on from that part of the business and no longer need this type of information. Instead of finding out why I have not looked at any information they have sent this company continues to send me information on the medical device industry. If they performed a little bit of research, they would learn that I no longer need data about the medical device industry and could perhaps send me more relevant information through clever email marketing segmentation.

Past purchase history (or behaviour) is a great way to segment your email list.  You have the data especially if you are an online retailer. If you are not an online retailer you could use a customer rewards program where customer information is stored in your data servers.

Email marketing segmentation: other approaches

Futuristic woman choosing demographicsWe have talked about past purchase history as a way to segment your email list but what other ways are there to segment? You can segment on as many different variables as possible; the opportunities are endless.

For example, let us assume you are a magazine sending out a daily newsletter.  Currently, you send your email out to your entire list at 9:00 in the morning. Your open rate is around 25% and your click rate is around 2%. What can you do with email marketing segmentation to increase your open rates?  In this scenario, there are two possible options you can use to segment your email list: open time and clicks.

To start with, try looking at the times people are opening your newsletter and send to these users closer to when they open your list. To target the people who are not opening, try looking at the geographic information you have for the people who open and compare that to your list. Then you can target the people who are not opening around the same time as those who are opening in their current geographic area.

Secondly, look at what story users are clicking on and try to send them more stories relating to that topic.  For example, I click on a lot more stories relating to content marketing as related to direct marketing.  This means I am really interested in content marketing and not as much interested in direct marketing. So in an effort to get me to click on more articles, you should try to send me more stories about content marketing and fewer stories about direct marketing.

These last two examples take more time and effort but they will increase your customer interaction.  Increased customer interaction leads to greater sales and customer retention.

These are just a few ways email marketing segmentation help split your email list into more manageable groups of users. What other ways can you think of to sort your email list?

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Steven Carlisle

Steven Carlisle

Community & Client Services Manager, UBM Canon

Steven Carlisle has been in marketing and management for more than twenty years. He has a passion for social media, email marketing, and marketing research.  Carlisle graduated with a Master of Business Administration from Bradley University and a Bachelor of Science degree from Illinois State University.  He currently is the Community & Client Services Manager for the Design & Manufacturing Portfolio at UBM Canon where he manages the day to day marketing activities to grow and increase community engagement. Carlisle also regularly contributes to the UBM Canon Marketing Services Blog.

March 4, 2014

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