Why Segmentation Matters In Email Marketing

Lead Dog Marketing Communications, Email Marketing

Email marketing is an integral part of companies' marketing strategy. But ask yourself, are you canvassing your emails to your entire contact database, or are you smartly targeting your email messages by your prospects’ titles, industries, or activities? For most companies, the answer is “no” when it should be “yes.”

If you’re asking what I mean by “smartly targeting your email messages,” it’s called email list segmentation and it’s a method used to categorize your prospects into groups that have similar traits. At its most basic level, you would have two lists: prospects and customers. But segmentation can go a lot deeper. For example, you can segment prospects based on demographics, job titles, industries, behaviors and activities. As for customers, possible segments could include length of time as a customer, purchase history, product/solution owned and so on.

Email list segmentation can have a huge impact on the success of your email marketing. Don’t believe me? Let’s take a look at the numbers from a 2017 study conducted by MailChimp.

Segments vs. Non-segmentsOpensUnique OpensClicksBouncesAbuse ReportsUnsubscribes
Overall14.31% higher10.64% higher100.95% higher4.65 % lower3.90 lower9.37% lower
Segment by Merge Field14.06% higher9.15% higher54.79% higher0.79% higher3.33% lower7.19% lower
Segment by Date Added/Signup Date29.56% higher26.86% higher51.64% higher55.18% higher29.55% higher33.76% higher
Segment by Interest Groups9.92% higher5.54% higher74.53% higher17.61% lower17.78% lower25.65% lower
Segment by Subscriber Activity10.44% higher12.23% higher15.69% higher9.23% lower10.34% higher5.49% higher

What’s the “so what?”

List segmentation offers more important benefits than higher open rates and clicks with lower unsubscribes. According to DMA, 77% of email marketing ROI came from segmented, targeted, and triggered campaigns in 2015. Email list segmentation allows for greater level of targeting and more relevant marketing for customers, improving the customer experience with a brand or company. As explained in a post from HubSpot, if you consistently segment your list and send the right messages to the right people at the right times, your subscribers will “start to realize that every time they get an email from you, they know the content will be interesting to them–because it always has been.” Segmentation yields better interactions and higher engagements with your prospects and customers since your message is focused based on your prospects’ behaviors and stage in the buying cycle. Imagine the impact your marketing can have if you’re meeting your prospects and customers at their point of need. All this leads to increased sales. According to Jupiter Research, segmented emails drive 18x more revenue than broadcast emails.

Where do you start?

Now that we have established the value of email list segmentation, how do you go about it? Here are a few tips to help you get started.

  • • Analyze your data – What data do you currently have in your lists? What data do you need to collect? What are the commonalities? What are the differences?
  • • Identify high-level segmentation groups – What industries are your prospects in? Where did you acquire the prospect? What stage of the buying cycle are they in?
  • • Create lists based on your buyer personas – You need to have an understanding of your audience and their buying journey. What are their demographics? What are their pain points? What is their functional job role?
  • • Analyze & evolve – Email list segmentation is a dynamic process. As your business grows, so can your list segments.

I’m not going to lie, segmenting your email lists can be a daunting task, but one that will serve you well in the long run. Happy segmenting (and if you need any help, feel free to contact us anytime)!

*Updated from a blog I originally wrote for another agency blog.
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