Email segmentation is a strategy in email marketing where contact lists are broken out into smaller groups of people with shared attributes such as interests, location, or buying behavior. It drastically improves open rates and conversion rates, so businesses using email marketing should use segmentation to create better campaigns that effectively reach marketing objectives.
How Email Segmentation Works
Email segmentation is a way for businesses to create better email marketing campaigns by breaking out contact lists by groups of users by similarities such as demographics, location, or buying behavior. Segmented campaigns are more effective and typically yield a higher ROI. This is because by recognizing that there’s no one-size-fits-all customer and segmenting groups by similarities, businesses can better tailor emails with content that resonates with its audience.
There are a number of ways to segment an email list such as by demographics (i.e., age, gender, education, or income), location, buyer behavior, website activity, stage in the sales funnel, interests, and values and motivators. Generally, businesses will create segments using a variety of segmentation types, such as age, interests, and location.
To segment an audience, businesses need to first determine the goal is of their marketing campaign, and with that, create their ideal buyer persona. Businesses can then analyze their contact list and select those from their list that matches their buyer persona for the campaign. Email campaigns are then designed to speak to your segmented list by crafting messages, offers, and CTAs that best fit them.
Benefits of Email Marketing Segmentation
Businesses that segment email marketing campaigns have more effective campaigns that reach their goals by increasing open rates, click-through rates, and conversions while decreasing unsubscribers. This is because segmented email lists are highly targeted to a specific group of users whose emails are designed to resonate with messaging and visuals that are meaningful to them.
Here are five reasons to segment an email list:
- Increase open rates: A segmented email list will typically yield a higher open rate because subject lines are geared toward meeting the needs and interests of the recipients.
- Increase click-through rates: By increasing the open rate, or the percentage of recipients who open your email, you are more likely going to increase your click-through rate as more recipients are actually opening and reading your email, in addition to designing messages and offers that are of value to your contact list, or audience.
- Drive conversions and increase ROI: As recipients find that an email includes an offer that is of interest to them by meeting their unique needs and desires, conversion rates will increase. As conversion rates increase, so will your return on investment.
- Improve sender reputation: Email providers assign businesses with an email reputation score, which is like a credit score for email. It rates your business based on its perceived credibility based on factors such as bounce rates and the number of times recipients flag your email. A low reputation score can lead to poor deliverability rates.
- Decrease unsubscribers: Businesses that segment email marketing audiences typically have fewer unsubscribers. While there’s debate around whether or not it’s worth sweating unsubscribers, those with a high-quality email list (e.g., recent customers) will want to maintain the health of their list and avoid unsubscribers.
Every business using email as a marketing channel with specific goals should segment their contact lists. It not only helps emails get read (rather than deleted or flagged as spam), but it also gives businesses a way to better reach and engage with their target audience. In return, making the time and effort involved more worthwhile by more effectively reaching your email marketing goals.
7 Ways to Segment an Email List
The number of ways to segment an email list is seemingly endless. However, there are seven overarching ways to segment an email list: by demographics such as age, gender, or education, user location, interests, values and motivators, buying behavior, stage in the sales funnel, and website activity.
Here are seven primary ways to segment an email list and example use cases:
User demographics such as age, gender, education, or income is a way to segment an email list. Demographics should only be used to segment a list when the information is readily available (opposed to making assumptions) and when it’s relevant to your email campaign.
- Job title or industry
Example: A university is advertising a new graduate degree in business. Since a prerequisite for a graduate degree is a bachelor’s degree, it segments its contact list by education so that only those who have a bachelor’s degree are on its email list. It also does the same when advertising its bachelor’s degrees by eliminating contacts who have a four-year degree and are therefore unlikely to be interested in another one.
Geographic segmentation involves creating targeted groups based on user location. This may be as broad as location segmentation by country or as specific as segmentation by a radius around a specified ZIP code. It’s a useful way to segment lists for businesses that offer their products or services to users within a certain location (i.e., an online retailer that only ships to the US and Canada) or brick-and-mortar businesses (i.e., a local dental practice).
- By country
- By region or state
- By city
- Within a certain radius of a ZIP code
Example: A boutique travel agency is using an email campaign to promote its sale on mid-winter trips to Iceland. Historically, the business has found that the vast majority of people who book trips during the winter months to cold-weather destinations are people who do not live in areas that have cold winters. So, it segments its contact list by considering whether to include users who are from temperate climates and the southern region of the US.
Interests are a key element in segmenting an email list. Businesses that have data on their contact lists interests will likely want to segment by user interests such as the products or services they have shown an interest in (either by page views or purchases), by their preferences (i.e., how often they want to receive emails and what type of email content they want), or by event attendance.
- Product or services
- Event attendance
Example: A pet supplies businesses is creating an email campaign to generate holiday sales. It offers a wide range of products for varying types of pets. It segments its contact list by the type of pet its contacts have or have shown an interest in. This enables the business to develop highly relevant promotional content to its contacts based on the type of pet they have, and therefore the types of products its contacts will be the most interested in.
4. Values & Motivators
Values and motivators, such as personality, opinions, attitudes, and lifestyles provide a good way to segment an email list as it informs a business on how they can best connect with their contacts. This includes the ability to better understand what type of content, including messaging, a CTA, and offer will be of interest or value to your contacts. This type of data can be difficult to acquire, though one way is through feedback and reviews.
Example: A software as a service (SaaS) business is looking to promote its new VIP loyalty program through an email marketing campaign. It wants to reach its best customers, so it analyzes reviews and feedback from customers to which are the happiest with its services. It then builds a campaign around those customers as they are going to be those that are most likely interested in joining the business’s VIP program.
5. Buying Behavior
Segmentation using buyer behavioral data is a good strategy for ecommerce businesses. Looking at data such as purchase history, return history, purchase frequency, average purchase value, and cart abandonment gives online stores a lot of useful information that can be sued to craft highly targeted ads that connect with your contacts.
- Purchase history
- Return history
- Purchase frequency
- Average purchase value
- Cart abandonment
Example: A company that sells tea online just launched a new bulk discount program for its commercial buyers. To avoid sending emails to individuals who purchase one of two boxes of tea per month, it segments contacts by their purchase history and value to find those that buy in high volumes and therefore would be interested to learn about the bulk discount program.
6. Stage in the Sales Funnel
Different sales messaging is required at different sales funnel stages to meet the needs of contacts based on where they are in the buyer’s journey. Segment by sales funnel stage, from new subscribers, warm leads, hot leads, and existing customers to create campaigns that resonate with your contacts and help drive them to the next stage toward customer conversion.
- New subscribers
- Warm leads
- Hot leads
- Existing customers
Example: A web design company segments its contact list by the sales funnel stage in an effort to generate sales. It segments users by those who have requested a custom website design quote but have yet to become clients. The company knows that these contacts are interested but are likely to be shopping around to compare providers at this point. It creates a campaign reinforcing its unique selling points with a call to action (CTA) for a free web design mock-up.
7. Website Activity
A business’s website is a goldmine for user data that unveils website activity such as recent site visits, page views, device type (desktop vs mobile), form abandonment, and lead source for landing pages and lead magnets. This information can be used to uncover a lot of information about your contacts such as gauging their interest level, and understanding what motivates and interests them.
- Recent site visitors
- Page views
- Device type
- Form abandonment
- Lead source
Example: An elder care facility is looking to promote its award-winning rehabilitation services, so it segments its contact list using website activity to find users who have visited webpages such as its traumatic brain injury page and its short-term care program page. It uses these pages to segment its list because these pages reveal an interest (or need) for rehabilitative services.
How to Create a Segmented Email Campaign in 5 Steps
To set up an email marketing campaign, first, define the goal of your campaign. Then create a buyer persona for your target audience, and segment your contact list so it includes only those who fit your buyer persona. Then, login into your email marketing platform and follow the new campaign creation process to build out your campaign. Lastly, launch, monitor and optimize your campaign over time.
Here’s how to create a segmented email campaign in five steps:
1. Define Your Goal
The first step to creating a segmented email campaign is to define the goal, or what you are looking to accomplish by using email marketing. This may be anything from driving awareness of an upcoming event to generating sales of a certain product or service. It’s vital to pinpoint your goal and be specific as possible as it is the guidepost to how you will later segment your contact list and design a campaign that connects with your audience.
2. Create a Buyer Persona
With your campaign goal in mind, create a buyer persona or a profile of your ideal audience for that goal. In other words, who is the best person to help you reach that goal? Consider factors such as basic user demographics and location to their interests, buying behavior, website activity, values, and motivators. Generally, businesses should use a combination of factors to develop a buyer persona, or customer profile that best suits your marketing objective.
For example, a hair salon is using email marketing to promote its new membership program where members pay a flat monthly rate for services such as hair styling and coloring services. It creates a buyer persona to identify who their target audience is for the campaign and determines that its contacts are between the ages of 45 and 65 that visit the salon monthly for hair coloring services, and who generally schedule mid-week appointments.
3. Analyze Your Contact List & Select Recipients
Next, analyze your contact list and look for contacts that match your buyer persona as best you can. If your buyer persona includes multiple segmentation elements, such as age, location, and interests, start by combing through your contact list for one element and then repeat the process for each element so that at the end you have a list of contacts who meet each segmentation criteria.
4. Create a New Campaign
Next, begin building your email marketing campaign. Start by logging into your email marketing platform, such as Mailchimp or HubSpot. If you have not chosen one yet, find the best email marketing software for your business and register for an account. Mailchimp is considered to be one of the best overall email marketing platforms that is both easy-to-use and free, so we will use it for the following examples. From Mailchimp, click “Create Campaign” and then “Email.”
On the next screen, you will be prompted to select whether you want to create a regular email campaign that sends one email or an automated campaign that sends emails automatically based on user interactions, such as new subscribers, triggers, and tags, or plain-text (not recommended). To create a drip marketing campaign that includes a series of emails, select “Automated.” Click “Begin” when finished to move on to the next step.
Those who selected the “Automated” option to build a drip campaign will be given a number of options as to how emails will be automated. Browse through options and select the type that best serves your campaign, it’s audience, and your goals. For more guidance on automation options and triggers learn more about Mailchimp automation types.
Then you will be prompted to input additional information. The information required will vary depending on which trigger you selected. For example, by selecting the “Welcome new subscribers” option you will be given the option to create a single email campaign or a series of emails (i.e., onboarding series or education series). Those building a campaign should select the series option if their trigger-type gives that option.
Those that selected a series will be directed to a page that lists a series of different emails. To begin designing each email, click the “Design Email” button to the right of each email
Those that opted to create a single email campaign will be directed to a page that displays all of the steps remaining to complete the new campaign creation process. To start, click the “Add Recipients” button to the right-hand side of the screen.
Select your audience using the drop-down. After doing so, the option to segment or tag your audience will appear to the right. There you can choose to segment by a variety of factors such as active subscribers, new subscribers, inactive subscribers, or recent customers. When finished, click the “Save” button. If you do not already have a contact list uploaded, add your list by navigating to the “Audiences” tab at the top of the page.
Next, indicate who your emails are coming from by inputting your name and email address. This info is what will display to your recipients. Click the “Save” button when finished to move on to the next step.
Click the “Add Subject” button to the right of the “Subject” section. In the following screen, write your subject line in the textbox. Review the “Preview Text” box to the right to see how your subject line will appear in your recipient’s inbox. For more guidance and ideas read these email subject line tips. Click “Save” when you’re done writing your subject line.
Back on the main screen, click the “Design Email” button to the right of the “Content” section to begin designing your email. In the following screen, browse and select a template. Try to find the template that most closely matches the layout you want to use.
After selecting your template, the email editor will open where you can customize the template. Hover over template elements such as images and text to update with your content or to duplicate or delete content blocks. You can also add new content boxes by dragging elements from the right-hand column over to the email design preview. After designing your email, click the “Continue” button in the upper right-hand corner of the screen.
Those building a series of emails within the one campaign will be prompted to input settings such as when to send emails. Otherwise, review your campaign. Mailchimp will flag anything in your campaign that needs to be fixed if it finds any issues with it. When it’s all set, navigate to the upper right-hand corner of the screen and select the “Schedule” option. Then input the date and time you want your campaign to launch.
5. Monitor & Optimize Your Campaign
After launching your new email marketing campaign, give it time to start collecting data. The platform will automatically collect and track data such as open rates, clicks, and conversions. Review your data and work to improve your email campaign over time by optimizing elements of your campaign from messages to your offer. For example, if an email in your series has a low open rate, try testing a new subject line to drive more opens.
5 Things You Need For Email Marketing Segmentation
There are certain things a business needs in order to use email marketing effectively. First and foremost, businesses need a sizable contact list so that they have recipients to send their emails to and an understanding of those contacts in order to segment them. Businesses also need to identify specific campaign goals, an email campaign strategy, and an account with an email marketing platform.
Here are five things businesses need to benefit from segmented email marketing campaigns:
- A sizable contact list
- Specific campaign goals
- An understanding of your contacts
- An email campaign strategy
- Email marketing software
For most businesses, building a sizable contact list and developing a solid strategy are the most challenging aspects of email marketing. Taking the time to generate and collect leads and develop a strategy will help you to create more effective email marketing campaigns in the long run.
Frequently Asked Questions (FAQs)
What is email marketing?
Email marketing is a strategy to directly connect with contacts by delivering tailored messages to their inbox. It’s generally considered to be a highly effective and low-cost marketing channel that can be used by nearly any business type and size. Get the complete breakdown of email marketing and how to use it to reach your marketing goals.
What is the best email marketing software?
The best email marketing software for your business will depend on your skills, features needed, time available, and budget. However, the email marketing software systems that consistently rank at the top across all industries and business sizes include Mailchimp, Constant Contact, Drip, ActiveCampaign, and HubSpot. Learn more to find the best email marketing software for your business.
How do I build an email list?
Businesses can build an email list in a number of ways such as using your website as a lead generation tool with lead magnets, email opt-in forms at checkout, social networks, creating giveaways or contests, hosting events or webinars, and attending expos and networking events. When looking to build an email list, businesses should consider where their target audience is and the avenues to reach them. Get the step-by-step instructions on how to build an email list.
Bottom Line – Email Marketing Segmentation
Segmented email marketing campaigns are more effective than campaigns that take a one-size-fits-all approach to communicating with an audience. Instead, segmented campaigns group users by similarities, giving businesses a way to craft messages and content that speaks directly to that audience, in return generating more clicks, conversions, and sales. Every business using email marketing should segment their lists.