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The Most Overlooked Email Marketing Strategy: Segmentation
I get questions all the time from marketers looking for advice on their email campaigns. How can we run better campaigns? How can we improve opens and clicks? Should we use HTML templates or plain text? How often should we email?
…and so on.
Time and again, I’ve noticed that email marketers rarely focus on the one thing that always helps to increase conversions: segmentation.
Here is a question: Do you like personal attention?
So do your recipients!
Segmenting your emails means sending each individual customer the right email for them at this moment.
Fortunately, segmentation isn’t hard to achieve. Here are three approaches you can take to better segment your list, from the simple to the more complex.
1. Start Small & Segment On A Single Key Variable
If you don’t do any segmentation right now, then the place to begin is by picking the most relevant attribute for your online business and using this to split your emails into two.
Let’s take a simple example from online clothing retailer ASOS. Their key attribute is whether a customer is male or female. To see just how frictionless it can be to collect this information, here is how ASOS collect this information:
It’s more than likely that you already have some information you can use to segment your customer database. Think about their location, their age, whether they have opened any emails in the last four weeks, whether they have visited your site more than three times, etc. All of these pieces of data could be used to segment effectively.
Another simple example is this recent email from Lars at KISSmetrics:
The segmentation on this list is simply by country, which can be gleaned from subscriber IP addresses, phone numbers or just by asking.
To do: What is a key attribute you can use to segment your customer base?
2. Start With Your Goal & Work Backward To Develop A Strategy
The 2012 Obama re-election campaign has been talked about time and again, thanks to its creative and effective use of technological channels such as email.
One thing the campaigners did particularly well was segment their database. Their goal was, of course, fund raising.
Starting with your end-game in mind is always a logical way to develop your marketing campaigns. In the following example, the Obama camp reviewed the data they had on hand and worked backward to develop a segmentation strategy.
They selected a cohort of customers for whom they already had payment details (from the previous 2008 campaign). This was a segment they knew they could likely count on for a donation.
They used this knowledge to put together a highly targeted and very pragmatic campaign:
This isn’t the sort of campaign that could be sent to all customers, as the direct links simply wouldn’t work. Thanks to segmentation like this, the Obama campaign raised $500 million using email marketing.
A similar example comes from Amazon. If you buy a book on your Kindle, they send you an email to ask for a review. Thinking about their goal, they break down the call-to-action just like the Obama campaigners did:
Again, this email only works because of its highly targeted nature. Rather than a blanket send, they segment their database by people who have recently purchased certain books.
To do: Review your newsletter or automated campaign strategy and think about your goals. How can you work back from that goal and create a more targeted email with calls-to-action that are extremely direct?
3. “Segment” On A One-To-One Basis
The Amazon example above leads nicely into the concept of true one-to-one segmentation, or personalisation. This is the ultimate end-game, and it requires some creativity.
DoggyLoot is an online retailer that sells (you guessed it) products for your dog! They understand well that their target customers love their dogs — they have a personal relationship with them. They developed a portal that captures specific information about their customers’ beloved pets:
Using this information, they’re able to send one-to-one emails that employ segmentation to talk directly to each recipient about their dog. Take this example promotion featuring products for “big dogs.” This email features entirely different products to the emails they’d send customers with small dogs:
Another great example of one-to-one segmentation comes from Tzvi at Userlicious.
Here’s what Tzvi did:
- Exported a list of all customers in the email database and broke them down by customers that use Gmail, Yahoo and other popular email service providers. He did this by looking at the domain of each user, e.g., [firstname.lastname@example.org] vs. [email@example.com].
- Excluding customers using these popular web-based providers, he used the remaining domains and set up an individual coupon for each domain, e.g., “WALMART” for customers with the domain “@walmart.com.”
- He sent out a newsletter with copy along the lines of “Hey you! Here’s a special coupon just for you…” featuring a coupon with each individual company’s name!
Here’s a mockup of how the campaign looked:
Thanks to conversion tracking via the coupon, they were able to do a post-campaign analysis and determine that they made an extra 35% revenue over their usual newsletter statistics. By comparing sales with the coupon to emails from the coupon, they were able to see that this 35% came from recipients sharing the email with their colleagues at work.
Now that is the power of segmentation.
To do: What information can you collect from your customers that you can insert into your email campaigns to segment them on a truly one-to-one basis? Think about what makes your customers happy. Both of the examples above put a smile on the recipients’ faces, as they are genuinely helpful.
Over To You
You’ve now got three strategies you can use to develop relevant segments for your next email campaign.
Put them to good use.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.