Best Email Segmentation Strategies for Ecommerce

As a marketer, you spend a fair share of your time getting your customers or subscribers to open your emails and act accordingly. 

But what if your campaign’s open and clickthrough rates have stopped? That’s because mass email marketing does not work anymore. 

So what’s the solution, then? Is there any fool-proof way to receive higher engagement and, consequently, conversion rates for your emails? This is precisely where email segmentation comes into the game. 

According to a Mailchimp study, email campaigns that leveraged segmentation received more than 90% higher click rates and 14.31% higher open rates than email campaigns that ignored segmentation. 

Those numbers are crazy, aren’t they? But the real question is how exactly can we segment an email list. Well, this is what today’s blog is going to be about. If you still need to build your list, we recommend reading this blog on building an email list from scratch first.

This blog will show you the benefits of email marketing segmentation. But we will also highlight the best email segmentation strategies that big e-commerce players use to skyrocket their sales.

Here are the things that we are going to cover today:

1. What is Email Segmentation?
2. Why is Email Segmentation Critical to Campaign Success?
3. Difference Between Segments and Groups
4. Types of Segmentation
5. How to Segment an Email List?
6. Email Segmentation in Campaigns Vs. Flows
7. Benefits of Email Segmentation
8. Start Segmenting Your Email List Today!

Now without more Jibber Jabber, let’s get started!

What is Email Segmentation?

Email segmentation is the process of dividing an extensive email list into smaller segments or groups to help make sure the content of the communication is relevant and valuable for the receiver. 

The more personal and contextual you can be with your messaging, your email will be more successful. Marketers utilize this email marketing tactic to send highly targeted emails to their email subscribers based on the following:

• Subscriber’s personal interests
• Geographical location
• Buying history, etc.

With the help of email segmentation, marketers can make their email campaigns as precise as possible so the correct message can reach the right audience at the proper time. 

When you break a large email list into smaller segments, the focus of your message becomes narrower. And the more narrow the direction of your message is, the more relevant your audience will find your content. This, in turn, enables the audience to engage with your content more as they find value in it. 

This is something that is simply not possible in mass email marketing. However, segmentation allows you to do that more effectively because you’re not sending similar emails to a broad audience where you must be more generic.

By leveraging email segmentation, you can speak to individuals like individuals. And this personal touch, especially in the e-commerce space, helps drive the behavior you want to see. 

The more personal and contextual you can be with your messaging, your emails will be more successful. For e-commerce, your specific segments can be broken down by behavior, stage in the customer journey, demographics, purchasing/customer category, use case, or 1st party data collected.  

Understand what email segmentation is? Let’s move further and determine why it is critical to campaign success.

Why is Email Segmentation Critical to Campaign Success?

Email segmentation is essential because subscribers want content that is relevant to them. 

Not all your customers are at the same stage of their sales cycle. Neither of them are from the same area, age, and gender and has similar interests. 

So ask yourself, will the same email to all your subscribers do anything good? Certainly not! It will drive most of the subscribers away from your brand. And that is precisely why breaking your audience into segments is critical to your campaign success.

We already know that email segmentation allows us to send specific and personalized messages to a smaller group. Moreover, it enables email marketers to design content to reflect a particular audience segment’s unique and specific needs. 

Doing this does not only increase the chances of your emails being read. But it also helps you drive conversions for your campaign by making the audience act according to your emails. 

After all, sending the right message to the right person at the right time makes email marketing powerful.  Have you noticed that we talked a lot about segments and groups? Do you understand the difference between these two crucial terms of marketing? Let’s break them down!

Difference Between Segments and Groups

Segment

A segment is a group of particular customers within your audience base with the same demographics, interests, behaviors, etc. 

For example, let’s say you have four customers, A, B, C, and D. A and D are 25-year-old fitness freaks living in New York, while B and C are of different ages and interests, living in other cities. 

You can separate A and D from B and C and add them into a single segment based on their similar demographics and interests. 

Group

A group is similar to a segment. However, we add subscribers based on our wishes rather than customer behaviors and demographics in groups. 

For instance, if you have many new subscribers who just subscribed to your newsletter, you can make a group and add all those new ones into a single group. 

By creating a group, you can make your email-sending job more accessible by identifying at what stage your target group of customers is.

Types of Segmentation

You build an email audience. You collect their data. Now what? What is the next action plan? This is where you need to perform segmentation.

However, there are mainly six types of segments that you can split your customers into:

1. Segmentation based on 1st party data
2. Demographic Segmentation
3. Psychographic Segmentation
4. Geographic Segmentation
5. Behavioral Segmentation
6. Segmentation based on customer category 

Segmentation Based on 1st-Party Data

First, you must separate your customers based on their needs, intent, and use cases for your product. 

Separating your customers based on these essential factors will help you maintain the relevance of your message for each one of your customers. 

In this way, you would be helping them in making their buying decision.

For instance, you own a children’s clothing brand; your target customers are parents and grandparents. Now your messaging for both parents and grandparents can not be the same. 

Why? Because both of these groups among your target audience are making a purchase decision. But both of them have different purposes. 

Parents would want to buy clothes for their child out of necessity, while grandparents are more likely to buy clothes as a gift giver.

Therefore, you need to speak to both of these groups differently. 

Similarly, if you are a coffee company, you need to analyze whether your customer is a unique, standard, or decaf coffee purchaser. And based on your customer category, you need to address them accordingly. 

Remember that, especially in e-commerce, the more accurate your messaging is, the more products you will sell. 

Demographic Segmentation

Segmentation by demographics is usually the first thing that comes to mind when discussing segmentation. It is a simple way of defining the target customer, yet it remains super effective and powerful.

Segmentation concerning demographics means dividing customers into groups based on identifiable differences and non-character traits seen in the diagram below.

Let’s understand demographic segmentation with an example. 

Consider that you sell luxury watches. So you would direct your demographic segmentation toward customers who earn a particular income and can afford your product. Otherwise, your marketing budget will be wasted if you fail to factor in the customer’s payment.

Psychographic Segmentation

This email segmentation strategy splits customers based on their interests, needs, and preferences. In other words, psychographic segmentation deals with mental and emotional customer characteristics. 

It may include:

For example, if a company that sells beer finds out that a particular segment of its audience enjoys watching sports, it can advertise its product(beer) as a perfect beverage while watching sports. 

Geographic Segmentation

Geographic segmentation is the easiest of them all and highly useful too. This email segmentation strategy is about grouping customers based on their physical location. This includes their:

An ice cream company that splits its customers based on their region and climate is a perfect example of geographic segmentation. 

Behavioral Segmentation

Another helpful email segmentation type, especially for e-commerce brands, is behavioral segmentation. This type of segmentation allows us to segment the audience as per their daily life habits. 

It needs solid data to yield effective results. However, you can quickly gather most of that data through your e-commerce website. 

Some types of behaviors are:

• Online shopping habits
• Browsing habits
• Spending habits
• Usage rate
• Loyalty toward brand

Behavioral patterns may include:

• Time spent on page
• Number of pages visited
• Number of visits on a site
• Bounce rate
• Intent of exit

In this type of segmentation, e-commerce brands try to gauge the behavioral patterns of their customers and then split them into different segments.

For example, if somebody purchases your product for the first time, they may be looking for something other than a subscription for that product. So an email to a first-time visitor could be like this:

Hey, check out some of our best-selling coffees!

Whereas repeat visitors would be more interested in a subscription opportunity. Therefore, an email to a repeat customer can be:

Save big by joining our loyalty program!

Furthermore, paying attention to your subscribers’ behavior towards your emails is also imperative. For example, you should find out how many people have opened your emails in the last 30, 60, or 90 days. 

From there, you need to ask questions like:

• Are my subscribers acting according to my CTA?
• How many of them have visited my website?
• How many of them have taken action on my website?
• Have they submitted the survey form?
• Did they leave a review of my product?
• Have they followed the company on social? 

Getting answers to these questions will give you solid insight into your customers’ behavior. With this data, you can also understand where your customers are in their customer journey.

Segmentation by Customer Category

Email segmentation concerning customer category is essential to segmentation often overlooked in e-commerce. With this, you can quickly identify which type your target falls into. 

To find customer categories, you should seek answers to the questions like:

1. Are the individuals receiving your emails paying customers or non-paying customers?
2. Are they a high average order value (AOV) customers or a low AOV customers?
   • Do your customers purchase in a specific category?
3. Are they apparel purchasers or footwear purchasers?
4. Are they women’s clothing buyers or men’s clothing buyers?
5. Do they buy replenishable products or non-replenishable products?
6. Are they loyalty members or non-loyalty members?
7. Do they purchase from multiple channels or from a single channel?
8. Are they wholesale customers or retail customers?

Answers to all these questions will make it easier for you to make different customer categories and design personalized emails while keeping each category in mind.

How to Segment an Email List?

The results of email segmentation drives are alluring, but segmenting the list can be daunting. But worry not; we have listed some valuable points you can note and begin segmenting. 

Start With Collecting Customer Data

There will be no segments without sufficient data. The data that will be most helpful for your brand depends on what product or service you sell.

Therefore, figure out what customer data you need to sell your products. How will you manage that data? And most importantly, how are you going to gather that data?

Create Customer Personas Based on Collected Data

Customer personas play a vital role in email segmentation. But sadly, only a few people pay attention to creating customer personas.

As a company, you must know who your best customers are. Then you need to create personas for every group of customers in your list. Why? Because personas tell us which message we need to send to which segment. 

To make customer personas, start by asking questions like:

• What are the pain points of my customers?
• What problem do they want to solve? 
• How can you solve their problem? 
• What goals do they have? 

Target Segments

Now that you have created personas and gathered data, it’s action time. Go ahead and choose a segment that you want to target. 

Whichever segment you go with, remember that your end goal is to engage your customers and make them buy your products or services.

Create Content

Done with choosing a segment to experiment with? It’s now time to write and design content that can convert. And do not forget that you must write personalized content targeted towards a chosen segment.

Creating content can be challenging, especially when conversions are at stake. It takes constant experimentation to find the perfect tone and voice that your target audience can connect with. 

So make sure to hire a professional copywriter to do this job for you.

For more information on the basics of creating content, we have a blog on that here.

Use Automation to Your Advantage

You have the data, target, and content. The only thing left is pasting the emails and sending them to the targeted segment. But wait! Are you going to do it manually? Nah!

This is where automation comes into the picture. It would be best to use email marketing software to send multiple emails without hassle. 

While you can perform this task manually, by all means, email marketing software comes in handy when you have many emails to send.

There are many such tools available in the market. One such tool is Mailchimp. Mailchimp also handles segmentation for you.

Our email and SMS automations blog is an excellent resource for figuring out much revenue you should be generating through your automations.

Analyze, Adapt, Repeat

Your job is not done yet. As your emails are up and running, your next job is to measure data. 

What data? You need to monitor how your emails are performing in terms of numbers. Find out:

• How many people are opening your emails?
• How many people are acting upon your CTA?
• What kind of content are they engaging with?

Email Segmentation in Campaigns Vs. Flows

Campaigns and flows can both be highly beneficial for your email marketing strategy. Let’s understand them in detail.

Email Segmentation in Campaigns

Campaigns are often regarded as one-time emails that are targeted toward a specific segment within the audience. Marketers design different campaigns for different audience segments. 

For example, if you are a children’s clothing brand having two segments, i.e., toddler and baby purchasers. In this case, you should have different targeted campaigns for these two segments. 

A campaign in email marketing aims to suggest or inform the customers about the products through content. It helps purchasers make the right decisions. 

Moreover, marketers schedule campaigns manually to send at a particular time. Also, campaigns follow a more proactive approach.

Campaigns include product launch emails, sales promotion, educational content, etc.

For more information regarding content and promotional campaigns, we have a blog detailing the two.

Email Segmentation in Flows

Unlike a campaign, a flow is an automated email sequence triggered by specific actions. 

Flows are usually emails that jump into your prospects’ inboxes at the right time with the relevant message. 

Moreover, flows are entirely automated, meaning the customer automatically receives them after triggering a specific behavior. 

For example, if a parent visits your children’s clothing e-commerce store and adds some products to the cart but leaves without purchasing. In this case, due to the customer’s action, flows will be triggered. As a result, the parent will be reminded that you have items left in your cart so that they can make the purchase. 

Similarly, if your target audience is horse owners, you can automate your emails with the help of flows like:

“Hey {First Name}, it looks like {horses name} is coming up in about {days till birthday}. We wanted to reach out and wish your horse a Happy early birthday, and just in case you want to spoil them, here is {offer} to make sure they have a great birthday.”  To learn more about flows and our six base email automations, we have a blog that goes in detail.

Benefits of Email Segmentation

It Boosts Your Conversions

Personalization always works when it comes to increasing audience engagement and conversions. And email marketing segmentation is all about personalization. Isn’t it?

It is only natural that humans like talking to humans. If your email feels like a robot, nobody would be interested in reading that email, let alone engaging. 

On the contrary, if your customers realize that you know their name, gender, and location, they are more likely to become your conversions. 

In short, if you value your customers, they will value you. It’s that simple.

It Improves Your Reputation

Email service providers and ISPs pay great heed to how people respond to emails from brands. If the number of people unsubscribed or “report as spam” is higher for a brand, the email providers would list that brand as less reputable.

This, as a result, makes it harder for a brand to market its products/services through the email channel. 

However, by leveraging email segmentation, you can increase your engagement rate. As a result, service providers will trust you as a reputable sender. You will hit the spam folder much less than those with a bad reputation or low engagement. 

After all, better deliverability goes a long way.  

You Get to Learn a lot About Your Audience

With the help of all these different segmentations, you constantly gather data that makes you more aware of your customers.

You get to know your audiences at a much more intimate level. And the best part? You can use these insights to make the best decisions to keep them returning. 

You can also use this customer data gathered through email segmentation on your marketing channels, such as social media.

It Increases Your Marketing ROI and Drives Revenue

According to a campaign monitor study, marketers experienced 760% increased revenue through segmented campaigns. 

When customers feel that a brand values them and caters to their needs, it builds a connection that goes a long way. Customers tend to engage with such brands more effectively, often making them their go-to place for buying a particular product. 

This works wonders for companies, not only in terms of revenue. But also in terms of taking that brand to the next level.

Start Segmenting Your Email List Today!

Email segmentation may give you a hard time at first. But once you start seeing results, you’ll realize what a goldmine it is. 

Try and test to see what’s working and what’s not. Then fine-tune your segmentation strategy accordingly to achieve maximum outcome. 

So this was all for today, folks. We hope this blog has made you familiar with email segmentation. Until next time, Happy Marketing!

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• How to Build an Email List from Scratch
• First-Party Data: What is it and How to Use it
• A/B Testing Email Campaigns and Automations