Email segmentation, the practice of separating a list of recipient email addresses based on some qualifying factor, is by no means a new technique. It is most certainly an effective approach that can drive significant improvements to campaigns and marketers are big believers in the practice.
Email marketing firm Lyris recently surveyed U.S. digital marketers asking what techniques they currently use and found that 85 percent cited list segmentation and targeting. Eighty percent of all those who used targeting also reported the tactic effective.
Janel Bailey, a marketing strategist at Clean Control Corporation in Warner Robins, Ga., had two reasons for exploring segmentation. The first, enabling consumers to choose their email list made them feel in control of the information they received. The second reason was retention. "Consumers tend not to opt out of a list if they believe the sender is listening to their interests and only sending them information they desire, instead of forcing information on them," said Bailey.
The challenge most email marketers face when tailoring their email communication to recipients through list-segmentation efforts, however, usually starts with a failure to understand their own business strategy and what they know (or think they know) about their buyers' purchasing decisions. Fortunately, there are several super email segmentation strategies to help marketers manage more effective email campaigns.
Source Segmentation: Perhaps the most straightforward and valuable method of list segmentation is lead source. Stu Carty, EVP at Semafone, a global provider of call center solutions for payment security, explains the draw toward source segmentation well. "When you create segmented lists it helps you track where you met your contacts, their interests, and also open and click-through analysis. For example, I can see that 'George Smith' clicked on one of my Web links contained in my email newsletter and that I met George at a recent tradeshow (contact list). I can add George to a new list called 'chardonnay,' because he clicked on a Web link about an article on chardonnay wine."
Geographic Segmentation: A marketer can employ geographic segmentation by a few different methods. This includes when a prospective buyer's location plays an integral role in their purchasing decision. For example, it wouldn't make sense to send an email to recipients outside of your service coverage area, right?
Role-Based Segmentation: The typical email list is comprised of various recipients whose roles and responsibilities within their enterprise (e.g. the marketing lead of a Fortune 500 company or the head of household) are easy to identify for segmentation purposes. The reason role-based segmentation is a popular and effective strategy is because each role or consumer classification has their way of interpreting meaning. If you know how they interpret messaging, brand marketers can personalize communications to each group.
Content-Interest Segmentation: Segmenting an existing list by recipients' roles requires a substantial amount of information beforehand. However, if marketers don't collect this information at the relationship's outset, there's still an opportunity for positive results - segmenting content by a recipient's previously expressed interest.
While many marketers only require name and email address for list access, the activities those users engage in after registration proves immensely useful. Users who download a whitepaper or routinely click on a particular type or style of content are clearly expressing their interests in a particular topic and perhaps even their overall intent. Segmenting these users and sending them content they historically engage with can dramatically increase click-through rates (CTR) and ultimately conversions. Segmenting by users' interest in specific content type benefits those enterprises engaged in lead-nurturing campaigns most, particularly when the initial sales cycle is over an extended period.
Behavior-Based Segmentation: Marketers interested in testing list segmentation but hesitant to try aggressive approaches, should consider segmenting based on users' behavior within the email itself. In the aforementioned Lyris study, two of the most effective methods used to segment email lists in 2012 were open rates and click-through rates (26 and 25 percent respectively). Segmenting a list based on behavior is a way to increase CTR, but in an age of more advanced email filtering mechanisms, it is also a way to stay in the good deliverability graces of ISPs. These services are increasingly looking at historical engagement as a measure of whether to deliver a message or not.
Advocacy Segmentation: There are opportunities within every email marketing campaign to identify your brand's strongest advocates. You can segment your list to acknowledge this valuable group's support. Knowing which email list recipients also share content to social networks is a quick way to accelerate awareness for specific messages, which you're confident will resonate. Couple that with content-interest segmentation and you're flirting with powerful email segmentation practices.
Once marketers understand how to segment their customer database, they must eventually hit "send." Semafone's EVP, Carty, suggests starting with a few key segmentations and then experimenting with 3-5 lists. "Then look at the open and click-through results to fine tune your segmentation. Build up your segmentation to several lists by events, titles/interest, geographic territories or other categories."
There's no shortage of proof that segmentation works and no lack of information on exactly how enterprises should segment their customer and prospect lists. Often the best way to understand segmentation is through a real-world example.
Chris Peacock, inventor of Hand Steady (a new type of cup with a rotatable handle for people with long-term health conditions such as Arthritis), is now segmenting his email marketing list by offering visitors a sevenday customized introduction to the product based on health condition, who the product was purchased for and even where they live. Peacock will then send recipients links to different content (in this case video) and schedule the segmented campaigns on different sequences (drip email marketing).
Segmentation efforts are futile if there's no understanding of how that strategy ultimately performed. To be successful, monitor changes in customer behaviors closely, throw out the worst-performing tests and reserve the best for when a few additional click-throughs could make a significant difference in future campaigns.
Ultimately, it's important to understand if additional actions were taken, if some level of engagement was obtained, or whether a purchase was made a first or second time. It's also important to understand whether the segmentation tactics in place increase order values and frequency.
The suggestions shared above are a good starting point, yet they remain rather generic for individual scenarios. The best approach is to start slowly by first analyzing your audience in order to identify any natural variations in their audience characteristics.