If you are a marketer with a newly launched ecommerce store and you don’t know how to improve your email marketing metrics, there’s something you must do:
Segmentation is what makes any email marketing campaign successful.
Unfortunately, the word may seem intimidating for the inexperienced. Some may venture into doing basic segmentation by gender or device, but that’s as far as many take it.
You know you can do better. It is why you’re here today. And we won’t disappoint you.
In this article, you’ll learn what email segmentation is and how to use it to improve your metrics and boost your ROI.
By the end, you’ll have seven email segmentation ideas you can plug and play in your store.
Let’s get started.
What is email segmentation really about?
Email segmentation is the process of dividing an email list into smaller groups, called “segments,” that share at least one attribute in common.
This common attribute allows you to personalize your emails. This, in turn, makes your emails more relevant, which also makes them perform better, creating a virtuous cycle.
One study found that 80% of consumers are likelier to purchase when brands offer personalized experiences, including email campaigns.
According to an Evergage survey, the biggest benefits of segmentation are an improvement in visitor engagement, customer experience, and conversion rates.
Broadly speaking, segments can be organized into four categories:
- Demographic, based on your contacts’ age, gender, job, education level, and income
- Psychographic, based on their interests, beliefs, values, goals, and worldviews
- Behavioral, based on their buying patterns, average order values, brand loyalty, products purchased, and site actions
- Geographic, based on your contacts’ city, region, or country they live in, its climate, and time zone
Whatever email segmentation idea you may use, remember that they all belong to one of those four groups. It will make it easier to organize and plan your email marketing campaigns.
7 Email segmentation ideas for ecommerce
Now that we’ve sorted this out, let’s move on to email segmentation examples.
1. Past purchases
Segmenting people who have purchased before and the products they purchased can tell you a lot about your audience, such as:
- The demographics of your highest-value customers
- The products they like
- What related products they could like
- Their budget
- Their loyalty toward your store
This data opens plenty of opportunities for sending relevant product recommendations:
Once you know they like a product or category, you can send them emails promoting the same product or other products from the category.
If you sell replenishable products, you can send them replenishment reminders. The same applies once you restock the product they bought: you can send them a back-in-stock email.
Similarly, you can use past purchases to promote complementary products. This is what cross-selling is all about.
2. Purchase value
Another great email segmentation idea is to target people who have met or exceeded the average purchase value. These are your “high spenders” or “VIPs.”
This type of segmentation can be highly profitable. One study by InMoment found that 60% of consumers will purchase more frequently from their preferred companies, and 50% will buy more.
To segment this audience, you can use the average order value (AOV) or the customer lifetime value (CLV).
Before we move forward, let’s clarify the difference between the two:
- AOV is the average revenue expected from customers. It’s calculated from the monetary value of every previous order made divided by the total number of orders
- CLV is the expected revenue to be earned from customers over their lifetime as customers. It’s calculated by multiplying the AOV by the purchase frequency
AOV is the most common choice for this type of segmentation because it’s easier to do — most email marketing platforms track AOV — and the campaigns are simpler to run.
Any promotional email campaign can increase the AOV. Common examples of such campaigns are:
- Holidays discounts and sales
- Birthday discounts
- Stock liquidation sales
However, when you target high spenders, like in the email segmentation example below, you want to take your offers up a notch and send:
- Special discounts
- Early access to new products
- Access to exclusive sales
CLV segmentation can be more effective as you focus on improving the spending and purchase frequency simultaneously.
You may find that high spenders may not buy frequently or that frequent buyers don’t make large purchases. This segmentation helps you boost both metrics and maximize your profits.
Two ways to target this audience are by creating a loyalty program and a referral program.
According to one study, consumers like loyalty programs that include:
- Exclusive discounts
- Early access to sales
- Early access to new products
- Personalized recommendations
Some brands, like Madewell, introduce their loyalty programs as soon as a customer makes their first purchase:
Alternatively, you can create a referral program, so your high-CLV customers become evangelists of your brand. Rewarding these customers will persuade their friends to shop with your store.
Unlike AOV, creating a CLV segment is harder in most email marketing platforms. One of the few ones that let you do so is Klaviyo, which leverages predictive analytics to let you create this segment (more on this below).
The only alternative to using automated CLV segments is to create one for people with a higher-than-average AOV and purchase frequency.
3. Predictive behavior
A few years ago, predictive analytics was a field exclusive to large brands with deep pockets and massive databases. Today, any online store can leverage predictive modeling, machine learning, and regression analysis techniques to predict the future.
Klaviyo is the only major tool that allows you to predict the following customer behaviors:
- Customer lifetime value (CLV)
- Churn risk (i.e., the chances they won’t buy again)
- Expected date of the next order
The first way to segment your audience using predictive analytics is by leveraging the expected date of the next order to nurture your buyers before they’re ready to buy again. When they are, you send them a promotional offer.
This is particularly important for first-time buyers who may not fully love your brand yet.
You can also use their expected date to suggest replenishing their stock and increasing their purchase frequency.
4. Site behavior
Segmenting your audience by their site behaviors is a more common and simpler yet equally powerful way to target high-value contacts.
To create this segment, you need to ensure your email marketing tool tracks site behaviors, something most major companies in the space do. Also, to message people by their site behaviors, they need to have a store account created or must be subscribed to your list.
The first way to segment using site behaviors is to target those who abandon their shopping carts. According to the Baymard Institute, 70% of shoppers abandon their carts on average, costing online retailers billions of dollars every year.
To message this segment, you create an “abandoned cart” email campaign that sends them reminders of the product they left on their carts.
Similarly, you can segment customers who abandon the checkout page. This segment is even more likely to convert than the previous one as it implies a higher purchase intent.
Another option is to segment people who have viewed a product but didn’t add anything to their cart — “browse abandonment,” as it’s called.
Unlike the previous two cases, this campaign should focus more on education than sales as the purchase intent is lower.
Finally, you can segment people based on their searches. It can be tricky to track this behavior, but if you do it, you can use it to target past customers and send them product recommendations.
Source: Really Good Emails
Whether someone opens and clicks your emails can tell you a lot about their level of engagement with your brand and content.
You can use this information to nurture:
- People who like your content but haven’t bought yet
- Customers who want more promotions
- People who may not be interested in your brand
To start, you want to decide whether to use opens or clicks as your main engagement metric (you can use both, but that’s more advanced).
Using opens will give you a bigger but lower-quality list, as opening an email is easy but doesn’t tell you whether someone is interested in your content or offers. The opposite is true for clicks.
For now, start segmenting with opens. Once you have a bigger list, you can use clicks and compare the results.
The main segment to create targets people who have opened at least one email in the last 30 days. You can also use other timeframes based on your past results, like 15, 45, 60, and 90 days. For now, keep it simple and use 30 days.
The 30-day list should get more content than the average one, if possible. It could also receive more brand-focused content that educates your list and makes them more connected with your company.
Simultaneously, create a “not engaged” list that includes people who haven’t opened an email in at least 90 days (or more, based on past results) and create a win-back campaign.
The goal is to make them somewhat interested in your brand again or to remove them altogether. The reason for the latter is to lower your costs and keep your deliverability high. After all, you don’t want to email people who don’t want to receive them.
If they open one of your emails anytime, they’ll be back on track. But if they don’t open any of your emails, you cut them out of your list.
You can also create a segment of inactive past customers, which mixes two behavioral attributes: past purchases and email engagement.
The ultimate goal of this campaign is to get them to buy again, but if they only open your emails, that’ll be good enough.
One final but slightly advanced segment is to tag people who click a given email and send them personalized content based on it.
For example, if you send an email with multiple different offers, tag those who click one of them and use that to send them specific content about that one offer.
Here is what that email may look like:
From all the non-behavioral segments, using your subscribers’ interests is one of the most useful ways to segment your list.
As you already saw, presenting product recommendations and content tailored to your contacts is highly effective. But you don’t have to use past purchase data to find what they like; you can ask them.
The first way you can do so is by sending a survey. This survey should explain why you want to do so, how long it will take your contacts, and what they’ll get in return, such as a discount.
Another option is to send them a quiz. They can work exquisitely well as they’re more engaging and less common than surveys. You can position your quiz as a way for your list to find the right product for their needs.
Finally, you can collect more data with your opt-in forms. As a rule of thumb, you want to use up to three input fields to reduce the friction for new subscribers. However, you can include radio buttons and checkboxes to help them indicate their interests:
You can also present survey forms exclusively to people on your list or with an account. This will increase your data of your existing customers and subscribers with little impact on the rest of the visitors.
Geographical segmentation is perhaps the easiest option you have. But despite their simplicity, they can work wonders if you use them properly.
One such case is to create seasonal segments, where you create a segment from people living in the southern hemisphere and one from people living in the northern hemisphere.
During one hemisphere’s season (say, summer), you send summer products, while you send the opposite products for the other hemisphere.
Another example is to segment your list around local events and holidays.
For example, you could send offers for the 4th of July to Americans, while to Canadians, you could do so on May 22, Victoria Day (the closest thing to their independence day).
Also, it’s worth noting that some non-religious holidays, like Mother’s Day, fall on different dates depending on the country.
- In the US, Australia, and Canada, among other countries, it’s celebrated on the second Sunday in May
- In France and Sweden, it’s celebrated on the last Sunday in May
- In the UK and Ireland, it’s celebrated on the fourth Sunday of Lent
Other countries use different dates as well. The point is that you want to segment based on these local differences to present relevant offers for this holiday properly.
How to get started with email segmentation
As powerful as segmentation may be, it’s easy to get stuck trying to build a segmentation plan. There are infinite ways to segment an audience, so where do you start?
First, start with your existing data. Create a segment based on the data you already have, like past purchases. Then, plan to gather the data you don’t already have.
Second, decide what segments you think most likely work for your needs. This can vary greatly depending on your industry, sales, and goals. Some examples:
- If your conversion rate is low, try a cart abandonment segment
- If your open rates are below the industry benchmarks, use some engagement segments
- If your customers reside worldwide, use geography segments
Third, create your segments based on what you defined previously. The seven email segmentation examples we shared today are some of the easiest and most effective.
Ivan Kreimer is a freelance content writer for hire who creates educational content for SaaS businesses like Leadfeeder and Campaign Monitor. In his pastime, he likes to help people become freelance writers. Besides writing for smart people who read sites like Getsitecontrol, Ivan has also written in sites like Entrepreneur, MarketingProfs, TheNextWeb, and many other influential websites.
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