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As we alluded to in this post on the best times to send emails, timing isn't the only factor that you could be--or should be--testing to get more ROI from your email marketing. In fact, segmentation is a fantastic avenue to explore.
Segmentation offers a whole slew of benefits. According to data from Lyris, by using email marketing segmentation:
- 39% of marketers increased email open rates.
- 28% lowered opt-out/unsubscribe rates.
- 24% experienced greater revenue.
- 24% increased sales leads.
- 21% experienced greater customer retention.
- 18% reported a greater number of transactions.
Why pass up the opportunity to make your marketing more effective, generate more leads and close more sales?
So, let's dive into email segmentation. Here are 4 ways that you could segment your emails and how each method has benefited real-life businesses.
One way to segment your email subscriber list is by email activity—specifically, email inactivity. Check out your open rates, and make note of who opens emails frequently and who hasn’t opened an email in a few months. You don’t have to completely write off your inactive customers quite yet. They might just need some extra nurturing to get them engaged again.
AARP took this approach. They divided their audience into the following segments:
- Active: opened email and took action in last 4 months.
- Passive: opened email in last 4 months but did not take action.
- Inactive: no opens or clicks in the last 4 months.
AARP then sent a series of targeted email campaigns to the passive and inactive segments. As a result, AARP saw nearly a 60% increase in active subscribers.
The Indianapolis Symphony is another organization that used email activity as a method of segmentation. They targeted inactive subscribers (no recent email opens) and sent them a special offer: a free ticket for opting into the Symphony’s updated e-newsletter program. People who did not open this special email were removed from the Symphony’s mailing list completely.
The Symphony pruned their email list by 95%. They were able to reconnect with some of their inactive but still loyal customers, as well as peacefully part ways with subscribers who just weren’t a good fit any more. By creating a smaller and more targeted subscriber list, they increased customer engagement and ultimately doubled their ticket sales.
Takeaway: Despite what you might hear, a huge email list isn't paydirt -- an engaged email list is. Don't be afraid to prune emails from your list that don't open your emails.
Another way to segment and target your emails is by location. If you have customers in different parts of a state, region or even the globe, you want to be sure that your offers are relevant and make sense logistically. As much as a customer likes your company, they probably won’t be able to make it to the grand opening of your new location in Topeka if they live in Los Angeles.
Daily deal website Groupon uses geographic segmentation as part of its email marketing strategy. They started out at a very high level, targeting general metro areas like Chicago or Richmond. After that, they moved into segmentation by zip code. Groupon is also looking into ways to tailor deals to the specific places that people frequent, such as their workplace.
By segmenting their email marketing list, and increasing the relevance of their geographic targeting, Groupon has seen some pretty good growth. They’ve increased the number of subscribers from 2 million to more than 115 million. They’ve also expanded their reach from 20 markets in the US to more than 500 cities across 45 countries.
Your customers aren’t all the same. They have different needs, different motivating factors, different budgets…. The list of differences goes on and on.
And as you might expect, different personas will respond better to different types of email messages and offers.
For the e-commerce website Intermix, which specializes in high-end fashion apparel, they analyzed their customers and defined the following personas:
- VIPs: customers who spend thousands of dollars with the company annually.
- Sale Shoppers: customers who only purchase products when there’s a sale or discount.
- Brand Shoppers: customers who are loyal to a specific brand.
Intermix developed unique email campaigns for each group. Through email segmentation, Intermix increased email open rates by 90%, increased click-through rates by 46% and increased email marketing profit by 28%.
SharMusic.com went this route to boost the performance of their email marketing. The musical instrument retailer segmented its customer email list to target people who had purchased new instrument strings within the last 6 to 12 months. Strings should be replaced every 6 months, so SharMusic.com sent out an automatic email alert to remind people to replace their strings.
In the email, SharMusic.com made sure to include details like:
- The customer’s name
- Type of instrument
- Product name and information
By targeting customers based on purchase history, SharMusic.com was able to raise average email open rates to 40%; click-through rates rose to 12%.
By segmenting email subscriber lists by factors such as email activity, geography, customer personas and purchase history, businesses big and small have accomplished goals like increasing email subscriptions, boosting email open rates and click-throughs and even doubling sales.