Sendicate Blog: Email Newsletter Marketing

| Why Segmentation is Vital for Email Marketing

Marketing communications is often a juggling act between sending highly targeted and relevant messages to individuals that will resonate with them, and mass marketing where the one message is delivered to many people at once. While the former results in a much greater likelihood of a conversion, the cost of getting the message to the individual is quite high. Conversely, with mass marketing the cost per individual is quite low but the likelihood that individuals will convert is similarly quite low.

One of the many reasons email marketing such a powerful tool for marketers is that this trade off is not as pronounced with email. Sending emails is cheap and it’s relatively easy to build a decent subscriber list. While some people still treat email marketing as though it’s a mass marketing tool, savvy marketers have realised its potential as a tool to send targeted and highly relevant messages. And with services such as Sendicate, it has never been easier to send targeted emails out quickly.

The difference between treating emailing as a mass marketing tool versus a personalised marketing tool is segmentation. Instead of sending the exact same message to all of your subscribers, you segment your list into similar groups that’s relevant for your overarching marketing strategy. This allows you to realise the benefits of sending personalised marketing messages to your subscribers without incurring the cost typically associated with this.

General guidelines for segmentation

Segmenting your email list is recognising that there exists various types of different people on your list that will respond positively only when given content tailored to them. The questions is: How do you determine which groups of similar people do you segment your email marketing along?

There’s countless ways you can segment an email list, but most of these ways are unlikely to make any sense. For example, unless you’re a hairdresser or in that field, it’s unlikely that segmenting your list in terms of your subscribers’ hair colour is going to be useful.

The key to good email segmentation is knowing the best way to divide up your list.

Regardless of your what your end goal with email marketing is, there are four main “pillars” of segmentation you should be aware of. These are:

Behavioural Segmentation

Factors that fall under the umbrella of behavioural segmentation are potentially some of the best ways to segment your email list to generate a higher ROI. Some of the more common ways to segment based on behaviour include what stage of the customer life cycle stage the subscriber is in (e.g., new user vs. experienced user) and a tool known as usage behaviour segmentation.

Usage behaviour segmentation is very popular when marketing a physical product, such as toothpaste. There are a few different reasons people use toothpaste; some simply want good dental hygiene, others prefer a fresh breath, and some wish to achieve perfectly white teeth. While most people are likely to value all three to a certain extent, there will be those that value one more than the others. This is why you’ll often see the one toothpaste brand sell different variants of essentially the same product highlighting different selling points to target all three of these groups.

While you’re probably not marketing toothpaste, you should approach email segmentation in the same manner. You should be looking at useful ways to segment your existing email subscriber list so that you can effectively target meaningful groups.

A vital behavioural segmentation factor all email marketers should be using is differentiating between active and inactive subscribers. Active subscribers refers to those on your list opening and reading your emails, while inactive ones are those who haven’t opened any emails from you in a while. Regardless of what your business is offering or selling, you should be differentiating between these two groups.

You may want to consider sending inactive subscribers win back campaigns, but if you do so, you’ll need to make this obvious in the subject line as they aren’t opening your emails. If this doesn’t work, you’d definitely want to look into cleaning your email list by removing long-term inactive subscribers. If you haven’t cleaned your email list in awhile, this will likely result in you reducing your email marketing budget as you’ve reduced the number of subscribers on your list.

Geographic Segmentation

This involves dividing up your email list based on where your subscribers are located. This could include where a person lives or works on a variety of different levels (such as country, state, city). It could also include more nuanced factors such as the climate of a subscriber’s home—whether they live in a hot and humid area in the tropics, or somewhere cold near the poles. After all, it doesn't make sense to send an Australian a 'Summer Sale' message in mid-July. Other possible factors include whether someone lives in a large or small city, the local language spoken, and the services or amenities available to a subscriber.

Demographic Segmentation

Demographic factors refer to how a particular subscriber fits into the overall population. The most common demographic segmentation factor is gender, along with age. Taking this a step further though, potentially more meaning factors to marketers include a subscriber’s income level, educational attainment, occupation, and relationship status.

Psychographic Segmentation

Factors such as one’s lifestyle, personality, values, attitudes, concerns, etc. all fall under the category of psychographic segmentation. Psychographics can be immensely valuable for your email marketing as it allows you an insight into your subscribers’ psyche. This allows you to tailor your email marketing based on people’s values (e.g., environmentally conscious or frugal), risk-aversion, and their preferred communication style. While this is usually more difficult than behavioural, geographic and demographic segmentation due to the subjectivity of the content, it is nevertheless worth considering.

Any decent email service provider (ESP) will enable you to create as many segments as you wish and better ones will make it easy to quickly create segments based on existing data they have like click and open rates. You should be looking for ones where these segments also automatically update themselves. For instance, if you have a segment for those who haven’t opened an email for 30 days, you’d want your ESP to automatically add subscribers into this segment once they might this criteria.

How to Segment with Sendicate

Email segmentation is easily with Sendicate with the ability to create new segments based on any custom field within your email list as well as with data collected within Sendicate such as engagement (clicks, opens, etc.), location, and email client (iPhone, webmail, ect.). To learn more about segmenting with Sendicate you can check out the guide here.