If you are new to email marketing you may not know that email segmentation is one of cheapest and easiest ways to improve email campaigns. According to DMA, segmented and targeted email campaigns generated 58% of all revenue and 77% of email marketing ROI in 2015. Yet 42% of companies still do not utilize this tactic.
This stands to reason that your business could benefit greatly by adopting an email segmentation strategy for future campaigns. Are you still unconvinced? Read on to learn more about what segmentation is and why you should adopt this practice as part of your email marketing strategy.
What is email segmentation?
Your email lists consists of a bunch of different customers or businesses. Each have different demographics, behaviors and interests. So why would you want to treat them all the same?
Segmentation is the process of breaking your massive list into smaller lists based on shared characteristics and is key to any target marketing strategy you may want to establish. You can segment your lists on a number of different data points, specific to your company. Some examples include:
- Purchase history
- Buying frequency
- Engagement level
Three reasons you should segment your list:
1. Higher open and click rates
Segmentation allows you to speak to your customers more directly. Instead of simply blasting an entire list, segmentation allows you to deliver information to the people who want it, at the right time. And if done correctly, the payoff can be huge. Mailchimp found that segmented campaigns had a 14.31% higher open rate and a 100.95% higher clickthrough rate than non-segmented campaigns.
2. Strengthened customer engagement
Segmented messaging improves the customer experience. According to research, 74% of marketers say targeted personalization increases customer engagement. Different customers have different needs. While one customer may value convenience, another may value price, and others may just be looking for entertainment. Segmenting customers based off specific value characteristics (that are already in your database) delivers better results because you’re delivering a message pertinent to the audience. You are sending an email to a customer based off stored knowledge on their demographics or actions that already implies interest. A customer is much more likely to act on something that is directly tailored for them and something they are interested in.
3. Increased revenue
What do higher open rates, higher click rates and strengthened customer engagement have in common? They result in increased revenue. Marketers have found a 760% increase in email revenue when they send targeted segmented campaigns. More and more customers expect brands to know who they are and what they care about. As customers continue to interact with your brand and receive relevant content, revenue will increase.
How to use your segmented list?
Once your segments are created, you need to target the audiences and personalize the content to make it as relevant as possible. You will continue to increase revenue by sending your audience's specific content that they are interested in. Designing personalized content can take time but your efforts will be well worth it; personalized emails generate 6x higher transaction costs compared to non-personalized messages.
Hopefully you now see the benefit that sending segmented communication can have for your business. Start small by testing your next campaign and see if you experience the same positive results.
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