October 7, 2016

How Segmentation Improves Email Marketing

Frustration often leads to change.

Take, for example, spam. In 2008, spam emails constituted almost 93 percent of total global email volume. That means the average user world-wide wasn’t able to find even one legitimate email for every ten in their inbox. Now that is frustrating.

But since 2008, the global spam rate has consistently dropped, and the global average as of 2015 is down to about 54 percent.

ALSO READ: 4 Unexpected Ways to Grow Your Subscriber List

This can be attributed to email user demand for better filtering. Email service providers have battled spammers with better filters, but they’ve also joined together to develop strict sending policies through initiatives like DMARC. Major governments have even joined the fight by passing laws that ban blatant spam — like CAN-SPAM in the U.S. and CASL in Canada.

This puts email marketers like you in a bit of a pickle. You want to send legitimate marketing email, but you’re foiled by people who believe unwanted marketing messages are spam. When that happens, they flag those messages or delete them, and next thing you know, your deliverability drops and your marketing messages don’t get through.

Now you’re frustrated. Which means it’s time for a change.

Segmentation is the secret to deliverability.

The email snob’s answer sounds like this: “If you don’t want to come off as a spammer, don’t send spam.”

Actually, that’s a fine answer. Unsolicited, irrelevant email feels like spam. So, if you tailor your campaigns to deliver the right messages to the right people on your list, they will be much more likely to consider the message legitimate, because they’re getting the stuff they want.

You can do this by sorting your lists before you hit send. Using what you know about your contacts, you can personalize your emails to give them what they want. For example: don’t send your newsletter to everyone on your list. Instead, send the email only to the subset of contacts who have opted in. Watch your unsubscribe numbers drop and your conversion rate go up.

You can get even more tricky, too. But to do that, you’ve got to track more information about your subscribers. Demographic information, preferences, prior interactions, buying behavior, etc. To do this, you’ll need a good contact relationship management (CRM) tool. CRMs track tons of data points for your contacts and help you to factor that information into your segmentation strategy.

What is marketing segmentation?

Marketing segmentation refers to a strategy to intentionally subdivide your contacts or your target market into any number of smaller groups with common needs, interests, pains, etc. When you bundle groups of people into increasingly specific categories (women who enjoy soccer, make $50,000+ per year, and live in the Pacific Northwest), you can engage them more meaningfully than if you treated everyone the same.

Your customers are each unique, so they will respond differently to email campaigns. Using segmentation, you can build emails with the best combination of copy, images, and calls to action that appeal to various chunks of your audience.

Implicit with segmentation strategy, you have to find out as much as you can about your customers, which begins with understanding the marketplace and how your small business fits in.

The ROI is steep.

Here’s something to consider: email marketers have reported a 7,000 percent increase in revenue when they used segmentation. That’s a solid reason to start thinking about using it.

Once you start tracking your interactions, the possibilities are endless. The best segmentation strategy hinges on your relationship with your audience — the way you segment, build, and reinforce that audience.

Here are a few examples of email campaigns that use segmentation to improve engagement and ROI:  

1. Demographic Segmentation

Demographics are facts you can identify about a group: gender, age, occupation, etc. Certain demographics respond to certain content better than others. If, for example, you run an air conditioning maintenance company that targets industrial properties, you may know that business owners between the ages of 35 and 50 tend to be the ones that make the most calls for maintenance contracts, so you might want to segment your email campaigns for that demographic, and then include relevant content.

2. Psychographic Segmentation

Psychographic segmentation is different from demographic in that it answers the question “Why?” more than the question “Who?” In this case, you may not be able to discern the reason for an interest in A/C maintenance from a gender point of view, but the reason that people are looking for maintenance may be because these are forward-thinking, careful budgeting types who want to avoid the short-term cost of emergency repair. When you understand why they need help, you can target them with email copy that addresses their needs.

3. Segment by Pain Point

There’s a good chance that, as a business owner, you understand better than anything else the pain points that draw customers toward your business. After all, most sales conversations revolve around how your product or service solves a specific problem. But not every customer has the same pain point. If you know which one they’ve identified, you can target them with specific email content.

Sit down with your sales and customer success teams to find out what they’ve been hearing on the front lines, and use that knowledge to develop some new segments.

4. Segmentation for Testing

When you use (and track) email segmentation, you will immediately gain insight into your whole sales and marketing spectrum.

The best way to use segmentation to improve your approach is with A/B testing, or “split testing.” A/B testing is a way to measure the effectiveness of your email campaigns by running in parallel two slightly different campaigns to viewers with similar demographics. You then measure conversion. You can then use the results to understand how the design, copy, time of day, or other elements perform.  

Because you can split test anything and everything, it’s easy to get bogged down by resulting data. You can take some respite in the fact that A/B testing is based on the scientific principle of controlled experimentation, but in practice, A/B testing is more of an art form. It takes a nuanced approach, and you can learn much from the experiences of others.

5. Segmentation for List Maintenance

List maintenance might just be the most important aspect of your email marketing strategy. It also happens to be the aspect many marketers avoid.

You spend so much energy building that list up, and you finally hit your goal of 10,000 subscribers. Who wants to question that outcome just because they aren’t engaging?

Email servers track a number of data points on email senders and under certain conditions will direct email straight to spam folders or other subfolders before the recipient even has
a chance to see it. Unfortunately, if you have too many instances of deletion, spam flagging, or low open rates, your credibility as a sender can be compromised. For that, your deliverability rate will suffer.

Pay attention to how the people on your list respond to your campaigns. Note the following actions, and segment them:

  • Recipients that mark your email as spam
  • Unsubscribes
  • Hard bounces (invalid email addresses)
  • Stale subscribers (recipients you haven’t emailed or who haven’t engaged with your emails in months)

The more email you send to inactive contacts, the more likely you are to get spam complaints down the road. At a certain point, recipients get sick of sifting through email they don’t care about, and they mark you as spam. Your goal should be to keep that metric as low as possible.  

Removing a contact from a certain list doesn’t mean you delete them from your database. It’s actually an opportunity. You can further segment the list of inactive recipients by using a re-engagement campaign that targets them. Something like, “Haven’t heard from you in a while. How about a [special offer] to get you back?” The ones who respond can be added to your engaged contacts list. The ones who remain silent get cut.

* * *

If you haven’t been segmenting your list, there’s no shame. Surprisingly, many businesses fail to segment, and they’re missing out on a powerful strategy. If you want to see your campaigns not only connect with leads, but drive measurable ROI, it’s time to make a change.


This article is a guest contribution from Ben Snedeker, a content creator at Infusionsoft. Infusionsoft helps small businesses thrive with sales and marketing software that uses automation to organize contacts, turn leads into customers and transform customers into raving fans.

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