Why the Smart Marketer Segments His Email List?

Why the Smart Marketer Segments His Email List?
Funnel Strategy November 23, 2015 8 Comments

Many businesses have now realised the power of email marketing and the sales it can bring with an extremely good return.

However, many businesses still aren’t reaping the full reward from email marketing because they have not yet discovered the power of email list segmentation.

Without segmenting your email list, you are sending the same emails to everyone no matter what stage in the buying cycle they are or what their interests are.

It is imperative that you segment your email list so that your emails are tailored to each group of contacts.

Crazy right?

I mean, sending an email to someone so it actually makes sense to them and they’re engaged in what’s being sold.

So What is Email List Segmentation?

 

email segmentation

Image from Zapier

Email list segmentation does what it says on the tin… segmenting your email list into a number of groups based on a number of factors.

For example, you could have a group for those who have bought and a group for those haven’t yet bought.

You can then build an email design for each group to either encourage them to buy again or to buy for the first time.

If your email list wasn’t segmented, you would be sending the same email to both groups when it might not be relevant to half of them.

This would result in a low open rate, a high number of unsubscribers and low sales.

Who Should be Segmenting Their Email List?

If you’re wondering who should be segmenting their email list, the answer is you!

It doesn’t matter whether you run an eCommerce website or a lead generation website, or whether you run a restaurant or a dental practice; you should be segmenting your email list.

It will help improve your email marketing statistics and more importantly, your bottom-line KPI’s.

If you aren’t segmenting, you aren’t maximising profit from your email list which you have invested time and money to build.

Once you segment your email list, you will wonder why it ever took you so long to do it.

4 Reasons Why You Should Be Segmenting Your Email List

If I haven’t convinced you by now why you should be segmenting your email list, keep reading because I’ll have you ready and convinced by the end of this blog post.

You will be giving your contacts a much better experience by sending emails that are personalized and tailored to their interests and behaviour.

This will in turn build a relationship with your contacts leading to higher sales.

If you are running a lead generation website, you will see a lot more quality leads because of the rapport you have built with your contacts.

Here are 4 more reasons why you should be segmenting your email list:

Contacts Aren’t All The Same

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Ebay Layered Segmentation by Smart Insights

Each and every person is different so why would you treat your contacts all the same.

Take a step back and think about the different types of customers you have.

For example, if you run a website that sells handbags, you might have customers who are female and buying for themselves and male customers who are buying your handbags for gifts.

These are two entirely different groups of contacts with different interests and buying purposes.

Which do you think would bring the most sales, one’s email being sent out to all contacts about the latest handbag or two separate emails being sent out; one with the latest handbag and the other that is promoting a gift idea?

Contacts Are at Different Stages of the Buying Cycle

The contacts in your email list will all be at different stages of the buying cycle; some may still be yet to buy, some may have bought once and others loyal customers who have bought from you multiple times.

Each of these groups needs a different nurturing and sending the same email to all your contacts isn’t going to do that.

I’ll use the handbag website again to give an example. Person ‘A’ has created an account on your site and went to the checkout page but did not complete their purchase.

Person ‘B’ bought a handbag on your site some months ago.

These two contacts are at entirely different points in the buying cycle and will, therefore, need different emails to nurture them to make a purchase.

Less Unsubscribers

If you have invested time and money into building your email list, the last thing you want to see happen is contacts unsubscribing.

Segmenting your email list to personalise your email to match each group’s interests and points in the buying cycle will indeed reduce the number of unsubscribers.

Not only will you see a reduced number of unsubscribers, but you will also see an increased click-through rate.

A report has proven that targeted and tailored emails can generate an 8% click-through rate while a generic email might generate a 3% click-through rate. Let’s put this into perspective:

Click-Through Rate No. of Contacts Traffic to Website Avg. Conversion Rate Sales
3% 10,000 300 2% 6
8% 10,000 800 2% 16

You can see how much your sales can jump by segmenting your email list to target the different factors that are relevant to your business.

Conversion Rates Will Improve

I’ve spoken about how segmented emails can result in a higher click-through rate which can lead to more sales but segmenting your email list also improved conversion rates so the number of sales could increase again.

Conversion rates can improve if for example you give offer codes to your loyal customers or if you give 20% off items in the basket a contact has abandoned.

This can only be done if you segment your email list.

Let’s have a look again at how an increased conversion rate can help improve the sales even more:

Click-Through Rate No. of Contacts Traffic to Website Avg. Conversion Rate Sales
8% 10,000 800 2% 16
8% 10,000 800 5% 40

You can see how much sales can improve by segmenting your email list.

How to Segment Your Email List

You’re probably asking why everyone isn’t segmenting their emails.

It may be because it isn’t the easiest thing to do in the world and can take a lot of organisations and time to plan and execute.

You will need to map out all the different factors that are relevant to your business such as customer birthdays, their buying frequency, whether they buy in-store or on the website, content interests and more.

Unfortunately, I can’t give you the answer to what factors should be segmenting contact by as different segmentation is needed for different industries.

What I can do, however, is to give you a few of the most common segmentation rules to help get you started on your segmenting journey.

Geography, Age & Gender

One of the most common ways to segment your contact is by where they live, by age group and by gender.

For example, with the handbag website you would put all the men into one group and all the women into another.

You might split those two groups into four by those who live close to your shop location and those that don’t.

You know, the local and the extraterrestrials.

Those four groups can then turn into 16 groups because you want to split each of the four groups by four age groups. You can see why it can be difficult to keep with and why many businesses are daunted by the task.

If you want to achieve the kinds of results this can bring, though; you will need to do it… you won’t be complaining once the sales start rolling in.

And if you don’t believe me, just take a look at the results clothing brand Johnny Cupcakes saw after doing this type of segmentation to their email list.

Past Purchases

Create a group for those contacts who have a made purchase from you before. You can use this group to encourage then repeat sales or to upsell a service.

If a new model has come out of the product that they bought, then you can let them by email as you already know they are interested in the product.

Stage in the Buying Cycle

I’ve touched upon this already in the blog post, but it is an important factor to consider when segmenting your email list. Map out the buying cycle, if you haven’t done so already, and create a group for each stage of the buying cycle to drop your contacts in accordingly.

Those Who Haven’t Left a Review

This is especially critical if you’re a hotel or restaurant but can be for any business to build trust with potential customers.

Create a group for those clients who have bought from you but have not yet left a review to encourage them to do so by offering a reward such as 20% off their next purchase.

Basket Abandonment

It can be frustrating to see on Google Analytics how many people have entered items into the basket but have then failed to buy for whatever reason. By segmenting your email list, you will be able to claw some of these sales back.

Leverage The Power of Segmentation…

Hopefully, you understand why segmenting your email list is important, the kind of results it can bring and an idea of how to start segmenting your email list.

While it is time-consuming to craft messages for each segment, the time investment is well worth it when you’re speaking directly to a customer’s wants, desires and handling their fears and frustrations with their objections.

Remember, each customer is different.

Therefore marketing to them the same way simply doesn’t make any sense.

Since the launch of Actionetics, we’ve seen segmenting being used far more successful in member’s campaigns and it’s evolving more and more every day.

How do you plan to segment your audience in your business? Do you have buckets for a segment of your clients or customers? Be sure to let me know in the comments below.

Written by Stephen Esketzis

Stephen Esketzis is Head Of Content Marketing at Clickfunnels. He is known as the 'Sales Funnel Architect' and is a specialist at using paid traffic to generate highly profitable sales funnels. You can also listen to his podcast 'Marketing on The Move' and look him up on Facebook.

  • James Smiley

    Awesome stuff Stephen. Keep it coming man. They don’t teach this stuff in school!!!

  • i agree with James 🙂

  • Powerful post. Guilt trips me that I’ve gotta start segmenting. Here’s the thing, and I’d love suggestions – I prioritize the time to write one good email a day to my list. With segmenting, multiple emails would be required. My list isn’t huge yet – around 1500. For the time required, is it worth segmenting already or perhaps once the list is bigger? Say, 4000 or 5000. Thanks!

    • Hey Steve, great question. A lot of people get worried that you need a big list to segment, therefore they hold back doing it until it’s ‘big enough’.

      I believe the size of your list is irrelevant, it’s all about your ROI. If you have 100,000 people or 1,000, you want to make sure they’re engaged and opening your emails otherwise it’s not worth your time sending them anything. Segmenting is simply marketing to each person on a closer to one to one basis while incorporating a sum of automation.

      If you start earlier too, it’s easier to grow it going forward.

  • Great stuff Stephen! (Y)

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