How eCommerce Businesses Can Maximize Outcomes with Email List Segmentation

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A person reading a customized email thanks to email list segmentation.

How eCommerce Businesses Can Maximize Outcomes with Email List Segmentation

As an ecommerce business owner, you likely already understand the value of connecting with your customers through email. In fact, over 80% of small business owners rank email as their number one digital marketing tool.

Where many ecommerce business owners go wrong is taking a one-size-fits-all approach to email marketing. The problem with this strategy is that your customers are not all the same. They have different interests, preferences and purchasing habits, which means they will respond differently to the same email. If you want to maximize your email marketing efforts, you must add a layer of personalization, and email list segmentation can help you accomplish this.

Keep reading to learn more about what email segmentation is and how the right message can improve both your marketing strategies and your bottom line.

What Is Email List Segmentation?

In basic terms, email list segmentation is the process of separating your list of email subscribers into specific subsets based on set criteria, such as age, gender, and purchase history. Creating these groupings allows you to add a higher level of personalization to your email content. You can then develop a targeted campaign that your customers are more likely to open, read and respond to favorably.

For example, you can send special birthday emails to your customers on or around their birthdays. These emails can include a special message as well as a discount or other unique offer. While this type of marketing tactic can be effective with customers at every stage of the buyer’s cycle, it may not be perceived well by customers if it’s not their birthday. Segmentation can help you avoid this issue by sorting your subscribers’ birthdates.

If this all seems a little complex and time-consuming, don’t be alarmed – email automation can help. This valuable tool can automatically sort your subscribers into groups based on your set criteria. It can also be set up to deliver the right emails to the right customer at the right time.

Why is email list segmentation so important?

Thanks to modern technology, small business owners have a variety of marketing channels they can use to reach their customers, including social media, SMS messaging, search engines and of course emails. Unfortunately, nearly every business, including ecommerce businesses, are also using these channels which have saturated them to the point where it can be hard to get your customer’s attention and even harder to prompt them to open an email.

Today, over a billion emails are sent out every day. Many people, including your customers and potential customers, are bombarded with so many emails that they are very selective as to which ones they open. So, your emails really need to stand out or you risk them never being opened at all.

Segmentation can help your emails stand out through:

Personalization

Separating your email subscribers into various groups allows you to send email with personalized content. For example, if you separate by age, you can send baby boomers emails that are more likely to interest them, while simultaneously sending millennials the best email that’s geared towards their generation. When customers feel that you understand their needs and interest, they are more likely to build trust with your brand and ultimately make a purchase.

Targeted Email Campaigns

When developing any marketing campaign, one of the top priorities is to know your target customer by creating customer or buyer personas. This step allows you to utilize customized campaign tactics that resonate best with your target customer. The same fact is true when it comes to email marketing strategy.

If you’re like many ecommerce business owners, your customers are not the same, and your customer personas may take several forms. This makes email segmentation a must because it allows you to create different marketing campaigns, or tiered campaigns, to target each unique customer type. This multilevel strategy can improve overall marketing outcomes.

People receiving customized emails due to email list segmentation.

Benefits of Email List Segmentation

Along with personalization and targeted campaign capabilities, email marketing segmentation offers a wealth of additional benefits, such as:

Increased Open Rates

Customizing your emails to match each unique subgroup can help to increase email open rates. In fact, studies show that targeted emails can not only improve open rates by as much as 244%, but this customized marketing can also increase click-through rates by 161%. That’s a huge level of effectiveness that simply can’t be ignored.

Enhance Customer Engagement

With increased email open rates comes enhanced customer engagement. Every time your customer opens one of your emails, you have an opportunity to not just generate a sale but to build and strengthen your customer relations. Only through selective and targeted email blasts can you continuously guide your customer, build trust and authenticity, and most importantly create loyal customers who become repeat buyers who are willing to promote your business through word-of-mouth, social media and other platforms.  

Improve Marketing ROI

Email marketing, even with automation, takes time and resources to develop and nurture, so ROI is important. While it’s true, email segmentation means a higher level of email creation and customer tracking, its results far outweigh these added steps. Not only can email marketing improve ROI, but it can also help to improve the company’s bottom line. In fact, studies suggest that businesses that use targeted marketing campaigns can increase profits by as much as 15 percent.

How to Segment Your Email Subscribers

The first stage of email list segmentation is to collect valuable customer data. This can be done in several ways. First, every time your customers, or potential customers, land on your website, they are providing you with valuable information. You can track everything from what pages they visit to where they’re at in the buyer’s journey to learn more about their shopping and online behaviors. A good rule of thumb is to collect as much information as possible, so if your marketing strategies change later, you’ll have the data you need.

Secondly, you can obtain some basic information about your subscribers by asking them to complete a short questionnaire as soon as they subscribe. Keep your questions short and to the point. Asking too many questions or the wrong questions might entice your customers to unsubscribe. Start by determining your specific marketing goals and center your questions around meeting these goals.

Finally, you can use other sources, such as metrics from your ecommerce site, including Etsy or Shopify, or location from an email’s IP address. Be sure to always prioritize the security of any customer data collected.

As soon as you start collecting data, you can begin the process of email list segmentation. How you separate your email segments will depend greatly on the type of company and customers you have and the specific goals of your business. However, here’s a look at several popular segmentation strategies and email subgroups.

Demographics

Demographic data, such as age, gender, date of birth, annual salary, and marital status, is the most common type of data collected by business owners of all sizes. This information can be very valuable when trying to create a targeted email campaign. For example, a teenager is likely to have very different product interests and shopping behaviors than adults aged 40-50.

Segmenting your subscribers by age allows you to send out different emails that target their specific age group. Not only can this strategy improve open rates, but it can also boost conversion rates because you’re promoting goods that the subscribers are more likely to be interested in buying.

Place in the Buyer’s Journey

Understanding where your customers are in the buyer’s journey is so crucial that subscribers should be grouped together base on this factor. For example, you have the

  • New Subscriber – This is a subscriber who just signed up but who hasn’t yet made a purchase or placed anything in their cart. These subscribers may respond well to a welcome email that promotes items they appeared most interested in and offers a first-time buyer discount.
  • Active Shopper: An active shopper has already subscribed, visited your website several times, but has yet to make a purchase. These shoppers are further along the buyer’s journey than the new subscribers but still need some convincing before becoming actual buying customers. Emails that highlight special deals or items that are similar to the ones they viewed as well as a first-time buyers discount may persuade them to make a purchase.
  • Purchasing Customer: Once a subscriber has made a purchase, they transition from a potential customer into a purchaser, but your work doesn’t stop there. It’s important to stay engaged with your customer and encourage them to buy again through cross and upselling. Emails highlighting upcoming sales or product launches are ideal for this stage. You can also introduce any loyalty programs you offer. Another great option is to send repurchasing emails that are sent out about the time you expect they may need to buy the product again. A friendly reminder, or even a VIP discount, can lead them back to your ecommerce store.
  • Repeat Customer: These are your most coveted customers. You want them coming back to make purchases again and again, and even referring others to your ecommerce store. Frequent engagement is not only beneficial, but it’s crucial to keep your repeat customers loyal (keep in mind, however, that it’s vital to adhere to customer’s preferences). These should be your first customers to learn about upcoming sales, new product launches and other important business news. You also want to persuade these subscribers to sign up for any loyalty or repurchasing program you may offer.
  • Inactive Customers: These are the customers you want to win back. They haven’t made a purchase for several months, so you must focus on heightened engagement or risk losing this customer forever. Use emails that promote items similar to the ones they’ve already purchased or offer unique comeback discounts or special offers, such as BOGO or free shipping.

Cart Abandonment

Retail cart abandonment rates can be as high as 84% and are certainly worth tracking. You always want to reach out to those customers who have made the effort to shop and place items in their online shopping cart yet were still hesitant to make the final purchase. Sending a personalized follow-up email at this stage is critical. In fact, it could mean the difference between making a sale or losing a prospective customer. Gently remind your subscriber that the items in their cart are still ready for purchase. Also, highlight any items that are now on sale and perhaps even offer a special discount. This extra step may be enough to prompt the customer to complete the sale.  

Interests and Preferences

You can also separate your customers by their specific interests and preferences. Be sure to ask all subscribers about their communication and email frequency preferences. This will allow you to communicate with your customers at a level that is most comfortable for them. Secondly, use purchasing and viewed page or questionnaire information to determine each customer’s unique product interests and likes. With this information, you can personalize emails with CTAs to purchase preferred products.

Location

Typically, the customer’s location is a crucial segmentation factor. Knowing where your customers live will allow you to send out relevant emails that match their current weather and geographic conditions. For example, you probably don’t want to send out an email promoting swimsuits in the middle of January to a customer who lives in Maine. On the other hand, there’s no need to promote snow shovels to customers living in Florida. Separating your subscribers by geographic location will ensure you’re sending the right emails to the right customers at the right time.

Active vs Inactive Subscribers

No matter what type of ecommerce business you operate, one of the first subgroups you want to set up is active and inactive subscribers. Naturally, your active subscribers are the most beneficial, and frequent engagement is crucial. However, you don’t want to ignore your inactive subscribers. Start by sending these subscribers targeted emails that focus on winning them back. You also want to provide these subscribers with an easy opt-out option. While losing any subscriber is undesirable, keeping these subscribers can put your reputation at risk because they may start marking your emails as spam instead of simply unsubscribing.

Now that you understand the importance of email list segmentation, you can take steps today to start tracking customers’ behaviors, demographics and other pertinent information. Then, you can start segmenting your subscribers into various subgroups and create a powerful and effective email marketing campaign.

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