Segmentation is the process of grouping names within your list into like interests, position in the buying cycle, demographics or other criteria relevant to your business.
Segmentation is also one of the most powerful and often under-utilized features of email automation applications. Though automation makes the process simpler, many marketers are put off by overhead in the form of upfront work required to develop and deploy rules and testing scenarios that result in more effective targeting and conversion. Should they bother?
Simply put: The answer is a resounding yes.
Using forms and engagement tracking, marketers can collect more information than ever before, and advanced data collection—progressive profiling—lowers form abandonment while acquiring new data through the querying of only data that has not yet been collected. When forms alone are not enough, email messages can be designed to A/B or multivariate test whole groups in order to garner specificity that leads to segmentation.
Segmenting lists using all of this type of data means you can selectively choose your most active (or profitable) groups, deselect the inactive, and develop campaigns designed to specifically reengage those who still hold promise. Data combined with automation means we benefit from better conversions and our prospects and leads benefit from messages in which they are truly interested. Targeted emails translate to better ROI in virtually every study.
Not only does segmentation make money through higher conversions, it saves money, too. When audiences are not separated into segments and are sent generic messages, open rates are lower. According to a study from MarketingSherpa, segmented emails get 50 percent more clicks than their untargeted counterparts.
Despite all the benefits of segmentation, not all marketers are onboard. For instance, Experian found that even though targeted email campaigns have a 40 percent higher open rate, 80 percent of marketers email the same content to an entire group.
Are businesses and marketers overcomplicating the process? Segmentation can be as simple or as complex as fits your needs, but customizing the process and making it unique to your business can give you the edge over competitors.
6 Steps to Segmentation
- Set a quantifiable and measurable goal for your campaign.
- Ensure your list contains enough names that it will still result in meaningful data, even after segmentation.
- Create segments using any data important to your business, such as: behavior, demographics, position in the sales funnel, and so on.
- Identify the most valuable segments—those that present the greatest opportunities.
- Create targeted messaging specifically designed to engage each segment.
- Track and measure results.
- When you treat new and current subscribers in the same manner and send them the same messages, you are missing one of the most important ways to nurture your lead to purchase. Segmentation can be as simple as dividing your list into new and current leads, but other ideas include:
- Marital status
- Presence of children
- Owner vs. renter
- Length of residence
- Lifestyle segmentation
- Past purchase
- Last visit to website
- Pages visited at website
- Resources downloaded
Explicit data are demographics such as company size, industry segment, job title and geographic location.
Implicit data are the recipient’s actions or interactions, such as those who open, click, download a resource, watch a video, visit your website, share your content, and so on.
For some businesses, even though they have a large list, the list does not contain enough data to enable meaningful segments—but all is not lost. Many companies provide list-append services that allow you to add data to your current list by matching on a unique bit of data you do have, such as the email address.
Another segmentation idea is to identify those within your list who are returning customers and those with the highest value order. These two groups are generally the most valuable to your company and therefore warrant especially targeted messaging and hand-holding.
Segments can even be divided further into sub-segments, and those sub-segments divided again, and so on. However, creating relevant content for each segment is not without effort, so it’s best to not subdivide your list to the point where there are not enough names in the sub-segment to justify the work required.
With segmentation; you can greatly improve message relevance; set up better A/B and multivariate testing; target your audience with subject lines, designs, and images that resonate with the individual; and acquire higher click-thru and sales rates.