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One of the biggest mistakes businesses make in their email marketing is treating their email list as a single entity, without any email segmentation, and sending the same emails to all their subscribers at the same time.
This is a huge mistake for two reasons:
First, not every subscriber wants every email you send. When someone gets an email that’s not immediately relevant to them, they delete it. Even worse, they might unsubscribe altogether. They might even flag your email as spam.
Contextual experiences increase engagement, conversion, and profitability of your email campaigns. It’s much more effective and cost-efficient to send emails only to the customers who want them.
The second reason is that you don’t have to blast emails to all your subscribers. If you can send targeted emails to just the subscribers who are most likely to engage with those emails, you should.
The good news is that you can send targeted emails with email segmentation. This article has everything you need to boost your email marketing revenue, from start to send.
What is email segmentation?
Email segmentation is dividing your email list into cohorts of subscribers, based on their behavior. The best email segmentation programs segment email lists in a way that enables businesses to send emails that are relevant to the subscriber, based on where they are in the buying cycle.
This may sound complex, and it can be, however, most ecommerce email marketing platforms can collect most of the data you need to efficiently segment your email list. Also, as you’ll see in the following sections, you want to avoid overcomplicated segmentation schemes.
A straightforward, well-planned email segmentation program is all you need to reap the benefits of email segmentation.
The benefits of email segmentation for ecommerce
Sending emails to a segmented email list is a better way to send marketing emails. Yes, it may require a little more work than simply sending an email blast. However, the return on investment from segmenting your email list is huge.
Additionally, the benefits of email segmentation for ecommerce go beyond just revenue generation. Once you’ve weighed all the benefits of sending to a segmented email list, you’ll likely find that the time, effort, and energy you invest in email segmentation actually make your email marketing less cumbersome, overall.
Better email channel engagement
When you send an email that is relevant to a subscriber, they’re more likely to open and click through on that email, full stop. Segmenting your email list based on subscriber behavior and preferences will increase your email channel engagement.
This also builds a rapport with your subscribers, so they’re also more likely to engage with email surveys, read newsletters, and engage with other emails that may not be as focused on direct marketing.
Email segmentation makes your email channel better for email marketing and more useful for research and other marketing-related activities.
More insightful email marketing metrics
When you send emails to people who don’t want them, it distorts the picture painted by your email marketing metrics. Subscriber interest impacts almost all of your email marketing metrics, and lack of segmentation is essentially failing to account for subscriber interest.
For example, if you’re A/B testing subject lines to optimize open rates, and you send an email to your entire list indiscriminately, you risk incredibly low open rates for both versions of the subject line. But it’s not because the subject lines are bad. It’s because you sent the email to many subscribers who weren’t interested in that email. If you conducted the same A/B test on a segmented email marketing list, you would be much more confident that the subject line was impacting the open rates.
When you segment your email list, you only send emails to subscribers who are most likely to engage with that email. This removes much of the noise from your email metrics and makes it much easier to fine-tune your emails.
Fewer deliverability issues
Unsubscribes, deleting without opening, and spam reports impact your email deliverability. This can be a big deal. It’s very tricky to correct email deliverability issues once your email address has been flagged by email service providers.
It’s impossible to entirely avoid unsubscribes and similar negative deliverability signals. However, segmenting your email list reduces these subscriber behaviors.
Minimize these negative deliverability signals and you’ll spend less time chasing down deliverability issues, puzzling out why emails are going to the spam folder, and other headaches.
More revenue from fewer emails
The most important benefit is, of course, increased email marketing revenue. If you send emails that get more opens and clicks, you’ll get more conversions. It’s that simple.
Additionally, email segmentation enables you to send email campaigns to only the most relevant segment of your email list. Email segmentation lets you boost your email marketing revenue with fewer emails, which can dramatically increase your email ROI.
Sending to a segmented email list is a more efficient way to generate revenue with email marketing.
The problem with most email segmentation programs
Email segmentation might be relatively straightforward, but that doesn’t mean it’s impossible to make mistakes. These are the big reasons why email segmentation programs fail.
They’re too complex or have too many segments
There are a seemingly unlimited number of ways to segment your email list. It can be tempting to get super granular with your segmentation, since most marketers are familiar with the principle that being more audience-specific is better.
However, there’s an issue with getting too detailed in your segmentation which can negate the benefits of sending fewer, more relevant emails.
Complicated email segmentation is difficult to operationalize and meet the creative demands of multiple segments
If your email segmentation program is difficult to implement and cumbersome to manage, you’ll burn a lot of resources just segmenting your email list and creating campaigns for each segment. Remember that you have to design emails and manage campaigns for each audience segment, otherwise, you may as well combine the audience segments who are getting the same email.
Additionally, the more you segment your audience, the more challenging it becomes to create segments that are meaningfully different. Yes, you can gather a lot of audience and behavioral data through email, but there is a limit to how granular you can get for building audience segments.
At some point, adding more audience segments delivers diminishing returns, but the workload of creating email campaigns for all your audience segments diminishes very little. It’s best to keep your email segmentation as simple as possible.
They have no segmentation at all
As we mentioned at the start, the most common email segmentation mistake is just not doing any email segmentation. Even though it’s best to keep your email segmentation program as straightforward as you can, no segmentation at all is too simple.
If you’re not segmenting your email list, you’re missing out on all the benefits, and the increased revenue, you get from a segmented email list.
They conflate targeting and suppression
Using both targeting and suppression is important for effective email segmentation. Most marketers understand targeted but are less familiar with suppression and how it can be used as an email segmentation tool. This leads to email segmentation programs that lean too heavily on targeting or use no suppression at all.
Email targeting is the traditional approach to email marketing. You come up with an ideal customer or audience, then create an email campaign that will appeal to that target subscriber. It’s a tried and true approach, and you should keep it in your toolbox.
A suppression list identifies subscribers that you definitely do not want to get your emails. Typically, suppression lists are used for suppressing emails to people who have unsubscribed.
However, you can also use suppression lists to modulate the number of emails a subscriber gets from your brand. A simple example is using a suppression list to stop emails intended for new customers from going out to existing customers.
You can get more clever with suppression, though. You may want to briefly suppress offer emails to subscribers who recently received an email with an offer, to avoid overloading them with offer emails or sending back-to-back emails. At the other extreme, you can suppress emails to subscribers who haven’t opened an email in months, even though they never unsubscribed.
You need capable email marketing software, such as Rejoiner, to leverage advanced email suppression tactics. Regardless of which email software you use, it’s important to make use of both email targeting and suppression.
How to build your customer data foundation
Every email segmentation program is built on customer data. You need information about your customers to create audience segments.
Fortunately, customers give you a ton of data simply by interacting with your website, making purchases, and engaging with your emails. There are external data sources, but most customer data comes from customer interactions with your brand.
Here’s how to get the customer data you need for building your email segmentation program.
Historical purchase data
Historical purchase data is incredibly valuable behavioral information. Knowing what customers have purchased in the past gives you huge insights into what they’re likely to purchase in the future and what sort of information they’d like to get from your brand.
Think of all the information you get from a customer’s purchase history: item names, SKUs, item category, price, order size, item quantity, subscription vs. one-time order, first purchase date, last purchase date, total spend, average order value, and other data points.
This is a ton of behavioral data that you can use to build subscriber profiles and audience segments.
The best part about historical purchase data is that you collect it by default. This makes it incredibly useful information because there’s very little additional effort to collect it, and historical purchase data enables you to establish purchasing patterns, which help you build more precisely triggered email campaigns.
On-site behavioral data
Your website is another place where you collect a lot of customer behavior data. Similar to historical purchase data, you likely already collect this information, and much of it can be directly connected to email addresses.
Actions such as adding an item to a wishlist and referring a product to a friend usually require the customer to be logged into an account or have already entered information on your site. However, it’s also possible to associate email addresses with page views and adding a product to cart.
Again similar to historical purchase data, on-site behavioral data gives you a ton of potential segmentation parameters.
3rd-Party integrations
Third-party integrations are kind of an extension of historical purchase data and on-site behavioral data.
Typically, third-party integrations use an API to connect your website or email software to an external app or service. These external services collect purchase and on-site behavioral data that may not have taken place directly on your website, and will often return that information to your data systems.
However, you may not capture or catalog this data as thoroughly as data you get from your own systems. It’s useful data, though, and you should add it to your customer database and use it for building subscriber profiles and building audience segments.
Channel engagement
Email channel engagement—opens, clicks, forwards, replies, and even negative engagements such as delete without opening—are strong behavioral signals from your subscribers.
Some of these signals indicate that a subscriber is prime to be targeted with more emails, and other signals tell you that it’s best to suppress further emails to a subscriber. Whether the indication is that you should send more emails or fewer emails to a subscriber, email channel engagement is an amazing guide for what sort of emails you should send to a subscriber.
Subscriber preferences
If you give them the opportunity, many customers will just tell you what sort of emails they’d like to get and how often they’d like to get emails. The key here is that you give subscribers a way to set their preferences.
If you don’t have a way for email subscribers to set their preferences, you should add a subscriber dashboard where they can tell you what they want. Additionally, you can give subscribers a place to enter personal information, such as their birthdays, which gives you even more opportunities to send timely, relevant emails and further segment your email list.
Customer ranking / RFM scoring
Ranking customers according to RFM score is a way to create a quantitative metric from your other customer data.
The RFM acronym stands for Recency, Frequency, and Monetary.
Recency is how recently a customer made a purchase. Frequency is how frequently a customer makes purchases. Monetary is how much a customer has spent on purchases from your business.
Typically, each of these factors is ranked on a scale of one to three, four, or five. It’s best to use a more limited scale for smaller customer bases and a larger scale for larger customer bases.
For example, a scale of one to three for each RFM factor is appropriate for customer bases of up to 30K customers. An RFM scale of one to four works well for between 30K and 200K customers. Finally, an RFM scale of one to five is good for customer bases greater than 200K.
This is just a typical breakdown of how an RFM ranking might scale up as the customer base grows. You may need to use a larger scale for a smaller customer base or vice versa, based on your customer lifecycle.
But, regardless of whether you use a one-to-three scale or a one-to-five scale for your RFM ranking, each customer will receive a three-digit RFM score that represents the recency, frequency, and monetary value of their purchases.
An RFM score of 551, for example, represents a customer that has made recent and frequent inexpensive purchases (recency rating of five, frequency rating of five, and monetary rating of one).
RFM scoring gives you a way to quickly assess a customer’s historical purchase data. However, it’s not a replacement for historical purchase data. An RFM score gives you a way to segment your email list based on aggregated historical purchase data, but the historical purchase data itself gives you other, more specific ways to create audience segments.
Dimensions of email segmentation
It’s understandable if all this customer data makes you feel like it’s impossible to create a straightforward email segmentation program.
However, a lot of customer data doesn’t mean you need a complicated email segmentation scheme. That’s because you don’t have to create subscriber segments based on every single data point.
When you add up all the customer data you have for one subscriber, it paints a picture of where the customer is in the customer lifecycle and what products a subscriber is most likely to purchase over the course of that lifecycle.
Then you can create a relatively simple subscriber segmentation framework based on key milestones in the customer lifecycle.
The customer lifecycle
Ideally, the customer lifecycle will be a true cycle, where customers become acquainted with your brand, make an initial purchase, make follow-up purchases, and then get emails to rekindle their interest and move back to an earlier stage of the cycle where they make additional purchases.
The goal is to send emails that are relevant to the customer’s level of interest to keep them engaged with your brand and maximize customer lifetime value.
The Rejoiner Ecommerce Email Marketing Guide goes into much more detail about customer lifecycle emails, but these are the staple emails in any lifecycle email marketing program.
The main thing that makes these emails cornerstones of lifecycle email marketing is that it’s easy to identify the subscribers who should get each email, based on clear signals from your foundational customer data.
Browse abandonment and abandoned cart emails
Abandoned cart and browse abandonment emails are two of the most valuable marketing emails you can send.
Customers who have added items to a cart or browsed a product on your website have demonstrated interest in a product. You know specifically which products they’re most interested in, and you can detect abandoned carts and abandoned browse sessions relatively easily.
This information enables you to trigger an email that lands when the customer’s interest is still peaked, with an offer or information about the specific product the customer is interested in. It’s a winning tactic that generates tons of revenue, and often gets customers to make that valuable first purchase.
New subscriber welcome emails
A new subscriber welcome email or email series triggers automatically when a customer signs up to your email list. These emails deliver any incentive you offer for signing up to your email list, give information about what to expect from your email marketing program, and establish the foundation of your relationship with new subscribers.
First purchase emails
First purchase emails welcome customers to your brand family, and give you an opportunity to offer incentives to make follow-up purchases, if that fits with your business model, or offer information to help customers make the most of their purchase.
Price drop emails
Price drop emails are often (though not always) paired with abandoned cart and browse abandonment emails. It’s exactly what the name implies: an email that notifies a customer when a product they expressed an interest in drops in price for one reason or another.
These are often paired with browse and cart abandonment emails as a follow-up to customers who did not convert after receiving one of the abandonment emails.
However, price drop emails can be sent to customers who have expressed interest in products through other behaviors, such as clicking through a product link in your newsletter.
Regardless of how the customer demonstrates interest in a product, price drop emails are a great way to maximize conversions from sales by telling subscribers who are most likely to make a purchase.
VIP/MVP campaigns
VIP/MVP emails are sent to your most valuable subscribers. These emails are typically sent to subscribers based on historical purchase data and RFM scoring.
VIP/MVP emails encourage high-value customers to make an additional purchase, usually by offering an incentive that you only offer to your most valuable customers. It’s an easy way to leverage exclusivity to appeal to customers who have a clear interest in your brand.
Product subscriber emails
Product subscribers are one of your most valuable customer cohorts. They generate reliable, recurring revenue. We don’t need to tell you how valuable that is.
Product subscriber emails come in a few variants, based on how your subscription model is set up.
Subscriber acquisition emails can be sent to people who have made a purchase that could be converted into a subscription. Maintenance emails are handy for reminding subscribers to renew their subscription, if it’s necessary. You can also send exclusive offers to your product subscribers.
Ultimately, your product subscribers are a clearly defined segment of your email list, which presents opportunities to improve the lifetime value of already valuable customers.
Churning/win-back emails
These emails target customers near the end of the customer lifecycle. When customers show indicators of waning interest, win back emails target them with a strong discount that incentivizes them to return and make another purchase. This, in turn, increases the likelihood that they will make additional purchases.
Disengaged/lost customer
Unfortunately, win-back emails don’t always work. Some customers are truly disengaged.
Before you suppress further emails to a disengaged customer, you can send a disengagement email to let the customer know that you see they haven’t opened your emails in a long time. You can even offer a discount as a last effort to win them back.
Birthday and anniversary emails
Birthday and anniversary emails are not strictly based on customer lifecycle milestones, but they are an opportunity to reach out to customers and present purchase incentives. It’s also easy to get the customer data you need to send an email on a customer’s birthday or the anniversary of their first purchase.
Zero-Party Data
Much of your customer data collection is transparent to the customer. They don’t have to do anything for you to get historical purchase data, on-site behavioral data, and other foundational customer info.
On the other hand, zero-party data is information customers willfully and actively share with your business. Zero-party data is incredibly handy for creating audience segments because customers clearly and directly tell you what they’re interested in.
Quiz results
Quizzes are clever marketing tools that can help you capture email addresses or phone numbers. However, a well-crafted quiz can also give you useful insights into customer interests.
The key is asking good questions and tracking the responses, rather than just tracking whether or not the customer completed the quiz and sending the results. Quizzes can be especially useful if the purpose is to help customers find products that match their needs.
The bottom line with quizzes is that you should track the results and use them to build more complete customer profiles.
Preferences
Account and email preferences are not only easy for you to see on the backend, but they can also tell you exactly how often a customer wants to get emails and what they want to get emails about. The mistake most businesses make is giving limited preference options or offering no preference customization at all.
If you don’t have a dashboard for customers to set account and email preferences, you should implement one. Remember, giving customers a way to set their preferences is just for customer convenience, it also gives you a lot of information for email segmentation and targeting.
Content Engagement
Each marketing channel can support your other marketing channels. Actually, your marketing channels should support each other. It’s one of the big benefits of omnichannel marketing.
Each piece of content on your other marketing channels should have a correlation with an email campaign so that you can use engagement with your content marketing as part of your email segmentation program.
It can be tricky to connect content marketing engagement with email addresses. Not all content engagement will be useful for email segmentation. However, every like and share that can be attributed to a specific customer via email address should be leveraged for email segmentation.
Product Registration Data
Product registration data may overlap a little bit with historical purchase data, but it’s still useful information. Customers who register their products are more invested in their purchases than those who do not bother to register their new products.
Additionally, product registration data is a more reliable indicator of who actually has the product. Products are often purchased as gifts, so the historical purchase data doesn’t tell you who has their hands on the product. Product registration data solves these sorts of discrepancies.
Product registration data also tells you more precisely when the customer might need to reorder a consumable product when the warranty on a non-consumable product expires, and other information that gives you opportunities for email outreach.
Acquisition Source
How a customer arrives at your store gives you some information about them. Were they a cold acquisition from a Google search? Did they come through one of your content marketing channels?
Understanding how a customer came to your brand helps guide the opening steps of building a relationship with the customer. A customer who has engaged with your brand through other marketing channels may be a little further along in the customer lifecycle than a customer who’s interacting with your brand for the first time.
Additionally, when you track acquisition sources, you can identify which acquisition sources are most valuable by looking at conversion rates for each acquisition source. Then you can allocate more marketing budget to the sources that generate customers which are more likely to convert.
Demographics
Demographics are the most straightforward of the email segmentation data. However, it’s important information for ensuring that your emails have relevant product recommendations and offers.
Geography
Where a customer is geographically located is one of the bits of customer data that can be easy to overlook. It’s totally relevant for clothing, outdoor, and other brands that sell products related to geographic features. Combining this data with the rest of your customer data enables you to really tailor your emails to customer needs.
Gender
Clearly, knowing a subscriber’s gender is relevant for recommending products that are useful to the subscriber. At the very least, knowing this information saves you from sending emails that are obviously generic sends to your entire list.
Age
Age is another subscriber characteristic that helps you send audience-appropriate emails. Sending emails that are not relevant to a certain age group may not be as obviously generic as incorrectly gendered emails, but it’s still valuable for email targeting.
Where to start: A 5-segment lifecycle framework
With all the data and potential email segmentation angles, things can get overwhelming. However, all this information creates a handful of pretty straightforward audience segments. Then the more granular customer data helps you create specific sub-segments of each large segment (such as male and female subscribers) and fine-tune your email content.
This 5-segment framework is a great way to get started with email segmentation, without bloating your email marketing program.
Here’s how we would build these segments using the Rejoiner platform.
Never purchased
Example segmentation parameter: Subscribed, order count = 0
As the segment name suggests, never purchased customers are those who have signed up to get emails but have not yet made a purchase. These customers are at the very start of the customer lifecycle and are best targeted with new subscriber, cart abandonment, and browse abandonment emails.
New customers
Example segmentation parameter: Order count = 1
First-time customers are an important audience for your business because of how recently they made a purchase (high recency in your RFM scoring). The more recently a customer has purchased from you, the more likely they are to purchase again.
The most likely group of customers to make a second purchase are the ones that just made their first. Capitalize on this opportunity with a first purchase email or welcome series for your first-time customers that reinforces their initial purchase decision.
Emphasize your unique selling proposition, and tell them why they should continue doing business with you. This is a great opportunity to drive a second purchase, impart those brand warm and fuzzies to your new customers, and tell your story. First-time customers are the most likely candidates to be receptive to your message.
These customers can also get cart abandonment and browse abandonment emails if they come back and exhibit the appropriate behavior to trigger these campaigns.
Active file
Example segmentation parameter: Purchase count > 1, purchase count < 4
Active file customers are those who have made multiple purchases, usually two to four, and are at the peak of the customer lifecycle. These customers can continue to get cart abandonment, browse abandonment, and price drop emails (see how useful these lifecycle emails are?).
Never purchased and new customers have pretty apparent segmentation parameters. However, purchase count isn’t the only way to identify customers that belong in your active file. You may want to use total spend or a product subscription as your active file segmentation parameter.
The parameter you use for your active file segment depends on your business model, but the goal at this stage is to entice customers to make purchases and move into the VIP category, rather than falling off and regressing into the lapsed category.
VIPs
Example segmentation parameter: Purchase count > 4 OR total spend > $1000
VIPs are the customers that drive your business over the long term. We’ve all heard the 80/20 rule. It holds true for customers. 80% of your profits are generated by 20% of your customers. That ratio can be even more dramatic for some online B2C companies.
Similar to the active file category, the important part is to define the characteristics of what makes a VIP for your company.
Is it the number of purchases? Total spend? Average order value? Define those business rules and set up a VIP campaign that is designed to automatically thank your best customers for their business.
Lapsed
Example segmentation parameter: Last purchase = 140 days
Lapsed customers exhibiting signs of defection are a remarkably valuable customer segment to pay attention to. These are customers who have purchased from you in the past but haven’t been back to your site in an abnormally long time to complete another purchase.
“Abnormally long time” is a key part of the discussion here. In order to know what is abnormal, you also must know what is normal (more on this shortly).
These customers aren’t buying for a reason–maybe they had a bad customer service experience or they’ve fallen in love with one of your competitors. But don’t lose hope–you have an opportunity to save this customer.
Set up your segmentation rules to recognize when a customer exhibits signs of defection and trigger your marketing at the moment of maximum impact. This is called a “win-back campaign.”
Now, how do you identify the perfect moment to deliver a win-back email? This is where you have to determine what is a normal time between purchases and what is abnormal.
We use an approach that measures the average time between purchases. The time between purchases is called purchase latency. We can map these periods of purchase latency and estimate the average time to reorder for a customer, based on purchase frequency. If you want, you can get really sophisticated and do this type of analysis within product categories or even for specific SKUs.
Here’s an example of a product-specific win-back campaign:
For a customer who buys a Swiffer, what is the average amount of time it takes them to come back and buy their first refill for the cleaning solution? Using our purchase latency analysis tool, we can see that the majority of customers in the Swiffer segment made a purchase less than 100 days since their last purchase.
For any customer who hasn’t purchased their refill by day 100, your win-back campaign would trigger on day 101 because that’s more than 100 days since the last purchase is abnormal purchase latency in this case.
This method enables you to build a campaign that triggers at the moment of maximum impact and won’t waste your precious marketing dollars on customers before they’re primed to receive follow-up marketing.
What to do differently per segment
You may have noticed that multiple customer segments can trigger the same emails, such as cart abandonment emails. However, that doesn’t mean that every segment should get exactly the same email, just because they exhibited the behavior that would trigger that email.
This is where the sub-segments of your five primary customer segments come into play. These sub-segments enable you to really dial in your email content and timing.
Send frequency
If you remember the arc of the customer lifecycle from earlier, your send frequency should roughly follow that arc.
Never purchased and new customers should receive emails at a fairly relaxed cadence. It’s unwise to bombard new subscribers with emails. One to three emails a week will most likely do the trick.
Your active file customers and VIPs can get emails at a more intensive cadence because they’ve demonstrated notable interest in your brand, and more than a few emails a week is less likely to turn them off.
Lapsed customers should get a few win-back emails once their purchase latency becomes abnormal. However, you should sunset lapsed subscribers if it’s been a long time since they engaged with your emails.
Messaging
Clearly, you want to tailor your email messaging to match the demographics and preferences of each subscriber.
Making your emails as relevant to your subscribers as possible is a major benefit of email segmentation, so it makes little sense to segment your email list based on purchase behavior, without adjusting your content and messaging based on demographics and other subscriber characteristics.
Offers
The offers you send your subscribers should be based on their historical purchase behaviors as much as possible.
This is relatively easy to do in abandoned browse and abandoned cart emails because the customer was looking at a specific product. So you can include an offer for the product or products the customer was looking at, which is about as relevant as an offer can get.
However, for other emails, such as price drops and win-back emails, the product connection is a little less straightforward. It may not be relevant to send an offer for a product the customer has already purchased, especially if it’s a non-consumable product.
In these instances, you can send discounts on products that are related to products the customer has already purchased. You can send discounts for products from the same category as previously purchased products or you can send offers for products that complement a previously purchased product.
You can probably imagine other ways to create relevant offers. However, the overarching principle is that your offers should be based on customer purchase behavior, whenever you have that data available.
Goal: Move never purchased folks into the active customer file and keep them there as long as possible
Ultimately, if your email segmentation program is well-implemented, it creates emails that are more relevant for your subscribers. It also gives you a framework for turning email subscribers into customers and retaining them as long as possible through a contextually relevant email experience.
Relevance → Context → Action → Retention
Your email segmentation program also gives you a strategy for moving lapsed customers back into your active file, creating that valuable repeating customer lifecycle.
How to measure if segmentation is working
We’re confident that email segmentation will boost your email marketing revenue. However, that doesn’t mean you shouldn’t measure your success. Measuring the impact of your email segmentation program proves that it’s working and supplies data you can use to optimize your email segmentation program.
Establish baselines
The first step is to segment your existing email list into five core segments. This establishes a baseline of performance, so you can then measure changes in each category.
Then, based on the goal of retaining as many customers as possible in the active file segment, check your metrics to answer these questions:
- What percentage of never purchased customers made their first purchase within the last quarter?
- What percentage of first-time purchasers made a second, third, and fourth purchase?
- Is your VIP segment growing?
- Is the lapsed segment growing or shrinking?
Answering these questions paints a picture of how well your email program moves subscribers into your active file and VIP segments. Then you can make adjustments to the email campaigns that target the subscriber segments that need the most attention.
Measure against hold-out groups who don’t receive marketing
If you want to scientifically validate that email segmentation is making your email marketing better, run a holdout test.
Leave a portion of your email list unsegmented. Send emails to both your segmented and unsegmented list, using your segmentation framework to contextually relevant emails to the segmented list.
Then have a look at your email marketing metrics for each group, and see which group is producing more conversions and revenue.
Check these metrics for each segment and for the one giant segment of the unsegmented holdout group:
- Customer lifetime value
- Average purchase count
- Open rate in the last 30 days
- Click through rate in the last 30 days
Again, we’re confident that segmenting your email list will increase your email marketing performance. However, running a hold-out test will prove beyond a shadow of a doubt that email segmentation works.
Start segmenting your email list and watch your email marketing revenue take off
Email segmentation is critical for B2C ecommerce businesses. If you’re not segmenting your email list, you’re missing out on a lot of revenue and retaining far fewer customers than your business is capable of.
Fortunately, you most likely already have much of the data to start your email segmentation program, and—with the right email marketing software—you can get your 5-segment framework built in short order. Then sit back and watch your email marketing revenue grow.
What to do now
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