Guide to email marketing segmentation — what, why, and how
Email marketing is an incredibly effective way to promote your business. It gives you the opportunity to create one-on-one conversations with hundreds of potential customers.
There’s just one problem — large email lists don’t benefit from generic messaging. For email marketing to be effective, you need to create messaging that’s tailored to the expectations of different audience segments.
If you don’t segment your email marketing list, you’ll send generic content to your entire database, which may or may not make sense for where your subscribers are in the buyer’s journey. These customers will disengage — and unsubscribe — when they feel like your content isn’t valuable, and that’s why email segmentation is so important.
Email segmentation helps your business target the right customers, which decreases unsubscribes and increases open rates and click rates. In this guide, we’ll explain how email segmentation works and why it’s so beneficial, as well as share best practices for segmenting your marketing list.
This post will discuss:
- What email segmentation is
- Benefits of email segmentation
- How to segment your email list
- Most common email segments
- Additional email segment ideas
- Best practices to segment your email list
What is email segmentation?
Email segmentation — also referred to as list segmentation — is a technique that divides an email list into different groups based on shared criteria. By segmenting your email list, you can create personalized emails that meet the specific needs of different groups within your larger audience. Instead of sending everyone the same message, you can fine-tune your emails to each segment’s unique expectation and create messaging that truly resonates with your audience.
Your audience segments can be as large or as small as you want. Keep in mind that the smaller the segments are, the more targeted and direct your marketing emails should be. Hyper-personalized content resonates more with recipients, so if no one is engaging with your emails right now, smaller segments could help. You do want statistically meaningful segments, though, so try to avoid segmenting so much that you’re left with just a handful of people in each segment.
In general, email segmentation helps you send more targeted, relevant content that’s more likely to engage subscribers and increase conversion rates. Segmentation comes with a huge host of benefits, from improved deliverability to subscriber engagement.
Benefits of email segmentation
Email marketing segmentation is unique because emails allow you to craft personalized content for small groups of people. Instead of broadcasting generic content to everyone in hopes that it appeals to the majority, you have the assurance of better understanding your audience’s needs. Email segmentation is helpful for so many reasons.
1. Boosts conversion rates
When you send personalized emails, your subscribers are more likely to convert. In fact, a 2021 report found that ecommerce businesses could increase conversions from 1.31% for non-segmented campaigns to 1.79% with segmented campaigns.
2. Increases open rates
Consider that 60% of marketers say their email open rates are 20% or more. While open rates vary by industry, segmenting your audience increases the odds that they will open your message. No one can take action on your email unless they open it, but embracing segmentation will increase your chances of engaging with more people.
3. Improves click-through rates
Your click-through rate is the percentage of people who click a link in your email. Whether you’re directing them to a landing page, blog, or booking link, you want as many subscribers to click through your email as possible. By segmenting your emails, you can write compelling calls to action and share resources your audience will actually want to engage with.
4. Decreases unsubscribers
Worldwide, the average email unsubscribe rate is 0.1%. That’s pretty low, but even then you want to keep as many engaged subscribers on your list as possible. With segmentation, you can offer timely, personalized content that your subscribers find so valuable that they wouldn’t dream of unsubscribing from your list.
5. Avoids spam filters
Spam filters prevent recipients from ever seeing your message. After all, if they think your message is spam, they’re definitely not going to open it. Segmented email marketing, on the other hand, helps you avoid the spam filter by sharing personalized messaging that your recipients won’t mark as spam.
6. Improves deliverability
Globally, email deliverability rates are over 87%. That’s pretty good, but it means that 13% of your list isn’t receiving your messages. Email service providers (ESPs) often look at engagement rates to gauge the quality of your emails, and by creating targeted messaging for each segment, you can show the ESP that you’re legitimate. This improves deliverability over time.
7. Boosts customer engagement
Personalization is the standard moving forward, and your customers demand it. In fact, 71% of consumers expect personalized interactions and 76% feel frustrated by non-personalized messaging. With segmentation, you can tailor emails to suit the preferences and pain points of each target segment. This level of personalization shows subscribers that you took the time to understand their needs, which makes them much more likely to engage with your email.
How to segment your email list
Segmentation revitalizes email marketing metrics, but you’ll see more results if you have a structured plan to segment your email list. There are many segments — and subsegments — to choose from, so this process can quickly erode into a tangled mess if you don’t have direction.
In early email marketing, segmentation was seen as an advanced feature that only expert email marketers used. But today, that’s changed. Virtually anyone can segment their audience using easy tools. For example, Adobe Marketo Engage helps you intelligently build customer segments based on real-time customer data.
Regardless of the tools you use, the following steps will help you plan out a flow that works for your email marketing campaigns.
- Define your segmentation goals. Understand why it’s important for your business to segment its emails. Ask yourself what you’re trying to achieve with your email campaigns and how segmenting your list helps you achieve your goal. For example, if your goal is to generate more demo requests, you might create email segments based on where customers are in their buying process to customize your messaging to encourage demo bookings.
- Determine criteria for segments. There are so many ways to segment your audience. You can separate subscribers based on demographics, behavior, customer journey stages, and more. Try segmenting your list with these criteria as a test first and check the size of each segment. It should be large enough to make an impact but not so small that it reaches just a handful of people.
- Define your data points and collect data. You know how you want to categorize subscribers. Now you need to gather data to categorize subscribers into segments. For example, if you’re segmenting based on demographics, you would start tracking subscribers’ age, location, or language in your marketing analytics software.
- Set up your email segmentation and start experimenting. With your segments defined and data collected, set up the segmentation rules in your ESP. Send a few messages to gauge your subscribers’ responses. If you don’t see a difference, refine your messaging and try again. If there’s still no improvement, adjust your segmentation.
- Measure, adjust, and repeat. You’re never truly done segmenting email campaigns. Subscribers come and go, and the makeup of your target audience will change over time. Continue measuring the efficacy of your email campaigns and adjust your campaigns to continue delighting subscribers over time.
While this five-step process is a good starting point, it’s important to think about how exactly you want to categorize your audience into segments.
Most common email segments
Email segments divide audiences into groups depending on certain information, like their demographics or past behavior.
For demographics, you can classify segments based on:
- Gender. Gender is helpful if your products or services are gender-specific, but it’s also helpful if you’re targeting a very specific type of customer profile.
- Location. Collect this data via sign-ups, sales data, or IP addresses. This is ideal for sending location-specific promotions, determining time zones, and attracting customers to a brick-and-mortar location.
- Job. This data point is helpful for tailoring content to contacts for B2B marketing. You can find job data based on a subscriber’s email address (if they use a corporate address), survey form responses, or by cross-referencing LinkedIn data with your email list.
- Marital status. If you sell products tailored to married or single people, like dating apps or wedding planning services, it can be valuable to understand your subscribers’ relationship status.
- Age. This type of segmentation can help you target your communications to different generations or for age-specific milestones, like retirement.
- Income. You can roughly infer someone’s income level based on job information or their purchasing patterns. It’s helpful to know if you’re selling products with different price ranges so you tailor offers, pricing, and discounts based on income level.
- Language. Location data can help you infer someone’s language. If you have a multilingual audience, you can even segment people by language so you craft messages in their preferred language.
You can also segment based on a customer’s past behavior, which includes:
- Purchase history. Integrate your email system with your customer relationship management (CRM) platform to see each subscriber’s history with your brand. This is a helpful way to re-engage with past customers, deepen loyalty with current customers, and convert people who haven’t made a purchase yet.
- Customer journey stage. Subscribers need different things in the awareness, consideration, and decision stages of their journey. Your CRM can provide a list of which contacts are in each customer journey stage, which you can use to focus on educational content (for the awareness stage) versus sales content (for the decision stage).
- Sign-up channel. Your CRM should have a record of how subscribers originally signed up for your emails. That might be via a landing page or social media platform. This data point will tell you what messaging your contacts have already seen and what assumptions they have about your business.
- Email engagement. Your ESP contains data on every open, click, and conversion for every email you send. You can use this data to spot disengaged subscribers and bring them back into the fold.
Demographic and behavioral data are some of the most common ways to segment your audience. But if these data points aren’t a fit for your campaign, there are additional ways to segment your audience.
Additional email segment ideas
Demographic and behavioral data are a good place to start, but even then you might need more information to effectively segment your audience. Try these email segment ideas if you’re interested in more granular data about your subscribers:
- Device. Tracking pixels will tell you which device a recipient uses to open your emails. Desktop users are often at work when they open emails, so they might respond better to B2B-focused messaging. However, 45% of all marketing emails are opened on a mobile device, so when in doubt, always optimize your emails for mobile first.
- Brick-and-mortar customers. If you operate both online and offline, use this data to segment customers based on how they prefer to buy from you. Collect this data via customer loyalty programs in your POS system. You can then send tailored promotions based on their preferred shopping method.
- Skill level. If your products require a certain level of knowledge (like industry-specific software), segment your list based on either the customer’s self-reported level or inferred level. Ask subscribers about their skill level when they sign up or infer it by monitoring how they interact with your content.
- Birthday. Segment your list by people’s birthdays to send a monthly birthday treat to your subscribers. This data will also tell you the age of your subscribers, which feeds back into demographic targeting.
- Reviews. Segment your customers based on their feedback about your business. For example, you can send more follow-up emails to customers who left a negative review, or vice versa.
- Social media activity. If your ESP integrates with a CRM that tracks subscribers’ social activity, this rich data will tell you a subscriber’s location and preferred platforms.
There are other methods you can use to segment your audience, too. Recency, frequency, and monetary (RFM) segmentation is a model that helps businesses profile a customer’s shopping habits. You need a robust CRM to track how recently customers made a purchase, how often they buy from you, and how much they tend to spend. But with this data, you can categorize subscribers based on lifetime value (LTV) and other financial metrics.
If you also interact with your audience via texting or short message service (SMS), segment your email list based on who also receives texts from you. This way, you can avoid sending duplicate messages to your SMS subscribers via email.
There are so many ways to segment your list that it can feel overwhelming. What matters is choosing the most relevant, helpful data points that help you create meaningful segments. But segmenting is just one half of the equation — it’s also important to follow best practices to leverage the full power of your segmented list.
Best practices to segment your email list
How you segment your email list will differ from how everyone else segments their list, and that’s okay. Regardless of how you plan to categorize your subscribers, these best practices can help you segment your list correctly and effectively.
1. Engage new subscribers with onboarding emails
When someone subscribes to your list, engage with them while your brand is still fresh in their mind. Segmenting your list by new subscribers allows you to tailor these onboarding emails to their specific needs. Create an onboarding sequence that includes a welcome email, educational content, and offers designed for each segment.
2. Nurture leads in the sales funnel
Not all subscribers are ready to make a purchase right away. By segmenting customers based on where they are in your lead funnel, you can send content that’s most relevant to their current stage. That might mean sending educational content to people in the awareness stage, product comparisons for the consideration stage, and discount codes for the decision stage.
3. Respond to changes in behaviors
People change over time, and your subscribers are no exception. For example, a highly engaged subscriber might become less active, or a dormant subscriber might suddenly start making purchases. Segment your list based on real-time behavioral data to respond quickly to these changes so your messaging is as relevant as possible.
4. Tap into your customer personas
Customer personas will help you better understand your customers. If you’ve already created customer personas, categorize your subscribers based on which persona they align with. This way, you can tailor messaging to speak directly to each persona’s biggest pain points.
5. Save time with dynamic content
With dynamic content, the content of the email changes based on the recipient. Instead of creating a new email for each segment (which would take a lot of time), you can create one email with dynamic content and quickly customize it for different segments. For example, you could use the same email body for all segments but change the call to action based on each segment’s past purchase behavior or funnel stage.
Segment emails with ease
Learning about email segmentation will help you take the right steps toward targeting your ideal customers. Ultimately, this will increase email open rates, improve click-through rates, and lower unsubscription rates.
When you’re ready to get started, learn how you can liven up your subscribers’ inboxes with personalized, effective email campaigns. Adobe Marketo Engage comes with tools, templates, and a visual editor to create emails for any device in just a few clicks. It ensures the accuracy of your segments by providing real-time updates based on subscriber behavior and preferences.