There’s nothing like email segmentation to increase the odds of converting your email subscribers into paying customers.
As one of the most profitable marketing channels, email marketing delivers $42 for every $1 you spend. And when you start segmenting your emails, you may experience even better returns!
In this article, we’re going to show you 7 ways businesses are using email segmentation to convert leads and generate revenue. Let’s take a look!
1.Email Segmentation by Demographic Data
Segmentation by demographic data is one of the original ways to segment consumers. Demographic data includes:
- Age
- Gender
- Income
- Education level
- Religion
- Ethnicity
If you’re targeting a specific niche, you should use more detailed segmentation options. However, demographic data is still indispensable if you’re covering different demographics, and it can be a great baseline.
How to Use Demographic Data for Email Segmentation
Demographic data can show you how to approach your customers.
For example, education level and age data can easily help you adopt the right tone of voice. You wouldn’t be formal with Gen Z’ers.
Similarly, you could notice that women love some of your products, while men prefer others.
Example: Roses
This fashion brand distinguishes between their female and male followers and serves content accordingly.
This is really the simplest example, and even this goes far towards boosting your ROI.
2. Segment Emails by Behaviour
Email segmentation by behaviour (e.g. usage patterns, past purchases) is a great way to maximize the value of each customer you have. You can use this information to up-sell and cross-sell to them, as well. You can segment by:
- Past purchases (value, product types, and categories, etc.)
- Sign-up source
- Engagement
- Benefits and intent
And more!
Actions speak louder than words. And if you segment by actions your prospects take, you’ll be able to tailor offers and maximize your conversion rate.
How to Use Behaviour to Segment Email Audience
For example, if you sell perishables, you could set up refill emails. You could also do what Amazon did, and offer similar and complementary products based on past purchases.
You can also make sure that your email marketing matches the landing page offer.
For example, a lead may have subscribed to your list because they’re interested in a specific product category. If you take note of that, you can immediately follow-up and increase your conversion rate.
Example: Casper
Casper revolutionized sleep. But their email marketing is also something to write home about.
With this email, they target people who have previously purchased from them.
By offering similar and equally effective products, they invoke trust to maximize the value of existing customers.
Example: Bryan Harris
Bryan Harris takes note of lead magnets his prospects have downloaded and then offers similar content.
This way, he can properly educate leads until they’re ready to convert. It’s a great way to speed up lengthy sales cycles.
3. Email Segmentation by Stage in the Sales Cycle
If this is your first time experimenting with email segmentation, start diving subscribers by their sales cycle stage.
This way, you’ll convert leads into prospects, prospects into customers, and customers into brand advocates.
If you’re struggling with stage-to-stage conversion rates, this segmentation strategy is perfect!
Conversely, if you send the same blasts to leads and customers, you will neither nurture leads, nor maximize the value of your existing customers.
Different stages require different approaches.
How to Segment by Sales Cycle Stage
Create separate lists for:
- Leads - People who have downloaded lead magnets and/or subscribed to your mailing lists
- Prospects - Engaged leads who need the right offer
- Customers - Customers whose value you can maximize and generate referrals
The key?
Understanding your sales funnel and the best offers for every stage.
Example: Asana
The folks at Asana know that onboarding is the key to retention.
Welcome emails are opened 91.43% of the time, and they generate up to 320% more revenue per email than other emails.
Strike while the iron is hot because first impressions matter.
Once your lead signs up, launch a nurturing sequence to engage them. Then, make sure the rest of your email sequences help them advance through the funnel.
Example: Bombas
Bombas retain their customers while asking for referrals. They offer free socks and discounts to incentivize their customers.
You can take this approach one step further by targeting people who often engage with your business. They’re more likely to refer their friends.
4. Email Segmentation by Shopping Cart Abandonment
This is another great way to convert more customers with behavioural data.
On average, 68% of carts were abandoned before customers purchased the products. It’s crucial to have a good segmentation plan to reactivate them and make them follow through.
How to Segment by Shopping Cart Abandonment
Let’s be real: your potential customers abandon their carts for a reason.
It’s a common misconception that people simply “forget” about their carts, or get distracted. There’s usually a very good reason why they choose not to proceed with their purchase.
And in order to create a cart abandonment sequence that reengages, you need to understand why your customers are abandoning their carts:
- Do your competitors offer something you don’t?
- At which point do your customers abandon their carts?
- Which offers successfully reengage your customers?
For example, if your customers abandon their carts on the shipping page, your rates may not work for them.
The follow-up is crucial.
Send the first cart abandonment reminder immediately. Wait a few days, and send another. Finally, send your “hail Mary” offer.
Example: Ugmonk
Ugmonk’s example is a great example of a company that understands customers have underlying reasons for abandoning their carts.
If you sell services with lengthier sales cycles, reach out to customers who’ve abandoned their carts and ask them how you can help. This especially goes for B2B.
Example: Target
This example is perfect for companies whose customers respond well to price changes and discounts.
Again, this approach may not be the best for B2B companies.
Your prospects might value training more than they’d value discounts. But when you’re in the B2C space, you can’t go wrong with a discount.
5. Email Segmentation for B2B Companies
Even when you’re operating in the B2B space, you’re still talking to individuals. The only difference is: those individuals have higher-ups they need to convince.
You’ll just need to use different segmentation rules to win:
- Industry
- Job function
- Seniority level
- Organization type
How to Segment Mailing Lists by B2B Criteria
If possible, establish a detailed lead qualification process.
For example, if you’re using LinkedIn Navigator to reach new leads, you’ll be able to filter by industries and job functions.
If that’s not an option, you can still segment properly.
For example, you can start by asking for general information like name and email address Then, you can send a follow-up email to gather more information and personalize the experience.
Seniority level is also incredibly important.
If you’re communicating with executives, you know that they make the ultimate decision. Content like case studies and benchmark reports will be incredibly useful.
If you’re communicating with people who don’t aren't decision-makers, then you need to help them convince the decision-makers.
Example: VWO
VWO leverage content to target decision-makers. Pay attention to how they emphasize benefits, as well.
In B2B, the results you promise your customers are everything.
You can tailor content for different audience segments by taking a look at the kind of content they previously consumed.
For example, if they were looking at benchmarks, send them case studies.
Example: AdWeek
AdWeek are pros at communicating with other businesses.
They carefully tailor content according to different interests and niches.
If you subscribe to their newsletter you’ll be directed to a page where you can select the topics you care about.
And speaking of interests...
6. Email Segmentation by Interest
Now, we’ve covered some pretty advanced segmentation strategies.
But if you’re only starting out with email marketing, it can be too much.
You don’t have to establish complex segmentation strategies right away. But you can use one very simple aspect to personalize: interest.
How to Segment by Interest
You can start by tracking email opens.
Segment your subscribers into different lists based on the types of emails they prefer.
Pay attention to content similarities between different emails, especially if you’re selling different products.
The majority of email tools allow you to filter by subscriber behaviour:
- Opens
- Clicks
- Bounces
- Unsubscribes
You can use these metrics to create specific segments.
Another way of measuring interest is by evaluating offers subscribers respond best to:
- Do they like exclusive products?
- Do they buy during sales?
- Do they prefer certain brands?
If you notice a lot of VIPs (people who like exclusive products), you can play on exclusivity in your emails. Invite them to be among the first to receive notifications about new products, and so on.
The key, of course, is data.
Example: Blue Apron
Blue Apron uses data like email opens, clicks, and previous purchases to send hyper-targeted content (recipes) to their customers.
This is a great way to activate customers and make them feel like your offer was handmade for them.
Example: Vitruvi
Vitruvi sends specialized product recommendations to customers who’ve shown interest in similar products. This email in particular addresses students and offers a solution that will help them focus.
You can easily gauge this interest type by monitoring leads’ link clicks, and the content they consume.
7. Layered Email Segmentation
Finally, you’ll receive the best returns from your email marketing when your models can accurately represent your customers.
What does that mean?
That means you need a layered email segmentation strategy. It will give you a complete understanding of different audience segments.
We’ve previously talked about segmenting by behaviour, demographic, and other factors. But if you’re ready to take your marketing to the next level, you should segment by all of these factors - and more.
As the image above shows, you can create a segmentation model that consists of different pillars.
You can use demographic data, as well as behavioural, psychographic, and geographic data.
The key is to use every data set relevant to your business.
How to Create a Unique Segmentation Model
If you’ve got a lot of customers and want to significantly increase your revenue, take a look at the data you’re currently collecting.
How are you personalizing your emails?
Which segmentation strategies were successful?
For example, maybe you’ve been segmenting based on opens and past purchases.
If someone frequently clicked on links related to socks and bought socks in the past, then it’s a no-brainer.
Try adding new data points.
For example, geographic data. You might notice differences between people who live in Argentina and Norway. Argentinians will buy socks in July, while Norwegians need warmth in December.
And that’s just the beginning.
The easiest way to get started is by creating customer personas.
When you understand how your customers make purchasing decisions, you’ll be able to leverage the right data.
Example: EasyJet
The folks at Campaign Monitor highlight a great example of using different data points to create personalized experiences.
Our advice for taking such a strategy forward would be putting it into practice. Listing significant milestones is all well and good, but you can do better.
Once you notice a lot of customers sharing the same affinities, you can create entire personalized models; from carefully curated content to benefit-focused offers.
The first step?
Getting to know your customers.