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3 Strategies To Segment Your E-mail List

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Segmentation works wonders for your e-mail campaigns. A lot of marketers are using segmentation to increase the effectiveness of their e-mail campaigns. Mailchimp has been measuring the stats of all their customers who use segmented campaigns and arrived at the results that campaigns which use segmentation have over 14% higher open rates, have over 59% more clicks than and have over 7% lower unsubscribe rates than non-segmented ones.

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(image source: http://mailchimp.com/resources/research/effects-of-list-segmentation-on-email-marketing-stats/)

If you look at the E-mail Marketing Benchmark Report 2013 by MarketingSherpa most marketers utilise some form of segmentation or personalization to make the e-mail campaign highly relevant and drive engagement.

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(image source: http://www.marketingsherpa.com/freestuff.html)

There are a number of ways you can segment and group your customers. Creating a layered segmentation like eBay helps. Let us explore each of the groups further.

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(image source: http://www.slideshare.net/DaveChaffey/econsultancy-adv-email-marketing-roundtable-june-2009)

Demographic

This is the simplest most basic way to segment your e-mail list. Demographics would include segmenting your list as per gender, age or geographical location.

Geographic Location: Your customers geographic location can be used to personalise your e-mail messages. You can even customise the landing page of your e-mail message as per the customers location. A good example for this was when President of the United States of America, Mr Barrack Obama, for his election campaign used personalised e-mail landing pages to better connect with his voters.

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(image source: https://blog.kissmetrics.com/email-marketing-lessons-obama/)

Age: Different age groups would find different things to be appealing. Certain age groups would only find certain things relevant. A car dealership would target an entry level vehicle to people less than 30 years of age. A travel company would target Goa as a location towards younger customers rather than the older ones who are looking for quieter and more peaceful places.

Gender: Segment your customers as per gender if you have a wide variety of products available to sell for both genders. In such a case you cant expect the same e-mail message to work. Instead, two e-mail campaigns can be made, one with products appealing to females and another with products appealing to males. The results would be a highly personalised campaign which drives interactions.

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(image source: https://community.sagecrm.com/user_community/b/sage_crm_news/archive/2011/10/21/email-marketing-segmentation-by-profile-1-3.aspx)

B2B/B2C: The same casual non-technical approach that you would utilise for a B2C customer base won’t be effective when communicating with your B2B customer base. The e-mail would require further technical specifications and other such details to make an impact on B2B buyers.

Derived

Using the history and data available to you for your customer you can segment them as per their transaction values and the propensity to behave in a certain way.

Transaction Value Segmentation: You can divide your customers, based on their past history, as per the amount they spend on your product offerings. You can divide them into 4 categories: High spenders, medium spenders, low spenders and one time spenders. Now you know that high spenders are more likely to buy products that are of higher value and you would create an e-mail campaign specifically for them.

Propensity Models: Using propensity models, you could predict and anticipate a customer’s future behaviour. Propensity models measure the effect of a particular treatment towards customer behaviour. You could predict the response of a customer towards offering a product discount. In the context of e-mail marketing, you could predict how likely a customer is to open your e-mail, engage, buy or unsubscribe the e-mail. So now you could focus your time and efforts on sending better e-mails to people who are more likely to open, engage or buy you products than on someone who wouldn’t.

Behavioural

Not all customers behave in the same way. They may exhibit different behaviour not just by how they interact with you but also how they would behave otherwise. There are a number of ways you could segment your customers as per their behaviour.

Interests: By targeting the customers based on their interests you would easily achieve higher click through rates. If a customer of an e-commerce website is interested in products like digital cameras, then it would make sense for the e-commerce website to send him mailers relating to offers on cameras and their accessories.

Loyalty: There would be many customers who would come to your website regularly and have been using your offerings for quite some time. It would be a great idea to send out mailers to such customers rewarding their loyalty in some way. You could send out loyalty promo codes to be used on your website to such customers to boost engagement.

Purchase History: You could target customers based on their purchase history. Again with the Obama re-election e-mail campaign, the donors were classified as per their history of donations to the campaign as previous donors, lapsed donors (who had donated in 2008 but not in 2012) and non-donors. Doing so helped the team create a campaign specifically designed to engage each of the groups.

Customer Lifecycle: You could divide your customers as per their lifecycle. New customers, Established, Dedicated and Logged off are some of the ways you could segment your customers. A new customer would want e-mails regarding the various offerings available on your website. An established customer would have chosen specific interests on your website and has been a fairly regular visitor. A dedicated customer would be someone who is extremely loyal to you. A customer who had been a regular visitor but has not logged on in quite some time can be a loved off customer. Each stage would require different e-mail message. Identifying such groups will help you nurture each stage to upscale them to the next stage in the lifecycle.

Conclusion

Segmentation does have its challenges and is not all that easy. Accumulating the data required for segmenting your e-mail list is definitely a huge challenge. But that doesn’t mean you should shy away from it. Most marketers who do spend time segmenting their e-mail lists achieve better results.

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