Email List Segmentation: 5 Ways to Boost Your ROI

How can you increase the return-on-investment (ROI) of your promotional email campaigns? Email list segmentation is a key way to improve your open, click-through, and conversion rates. By sending relevant emails to targeted segments of your email list, you can help ensure that your customers and prospects are getting information about the products and services they’re most interested in. Here we provide five tips for segmenting your email list to achieve optimal ROI.

Why Segment Your List?

Dividing your email list into smaller groups based on similar characteristics—such as where your subscribers live or what they’ve purchased in the past—can dramatically increase the relevance of your promotional email campaigns. According to a recent study by the email service provider MailChimp, for example, both open and click-through rates improved by over 14% in users’ segmented campaigns compared to non-segmented campaigns. By sending to very focused segments, we’ve seen open rates as high as 80% for FulcrumTech clients. In addition, studies by Jupiter Research have shown that segmenting can bring in up to 10 times more revenue compared to when all subscribers on a list get sent the same message.

Segmentation can also help your deliverability. People are much more likely to open and click-through emails that have relevant information. Plus, they are less likely to get annoyed and mark your emails as spam.

And the good news is that the technology and tools available today make the customization and sending of your segmented emails easier than ever. So once you’ve determined how to segment your list, the rest is relatively easy.

How Can You Segment Your List?

Take a look at the information you’ve collected from your list of subscribers, and then take a look at your response/purchase data. Are there any patterns you can see? The following five segmenting tips can help you uncover the patterns and improve the response to your promotional emails:

1. Segment by Geography.
   If you’ve collected such data as addresses or zip codes from your subscribers, then you can use geography to segment your list. If there’s a promotion at only one of your company’s locations, for example, send to the group on your list that lives within driving distance of that location. Or, if there’s news that affects people living in just one state, segment accordingly. By sending an email to only the subscribers it relates to, you can reduce the chance of annoying your overall list with too many irrelevant messages in their inboxes.

2. Segment Based on Purchase History.
   What have your list subscribers purchased in the past? If they’ve purchased a printer, for instance, you know that they’ll eventually need to replace the ink cartridges. In this way, you can target certain groups with promotions for specific products. Plus, by uncovering what products customers typically purchase over time, you can anticipate what products other customers may be interested in who may have purchased only some of those items. So let’s say you observe that a lot of your customers typically buy Products A, B, and C. If you have a group of customers who have bought only Products A and B, you may want to send them an email about Product C.

3. Segment Demographically.
   Some examples of demographic data that you can use to segment your list include age, gender, marital status, income, and job title. As you look at the demographic data you’ve collected, you may uncover patterns in their purchase history as well. If you have a group of women who have purchased men’s clothing in the past, for example, they would likely be a good segment to target with a Father’s Day sale.

4. Segment Prospects Versus Clients.
   Because a client’s relationship with your organization differs from that of a prospect, they should be segmented on your email list. For instance, you don’t want to send current customers a promotional email with a special introductory rate that’s actually lower than what they pay. Also, clients should be getting follow-up email campaigns—including rewards and discounts—to help encourage more repeat sales and customer loyalty.

5. Segment Using Behavioral Data.
   Using behavioral data to segment your list is another important way to help improve your ROI. The following are some examples of behavioral data categories:
   1. people who have opened your email
   2. people who have opened and clicked through to your Web site
   3. people who have opened, clicked through, and made a purchase
   4. people who have not opened your email.

   Each of these groups should be treated differently in future email promotions. You could send the same promotion with a new subject line, for example, to try to engage the group who didn’t open your email.

The bottom line is that relevancy is key to optimizing your ROI, and segmentation is an important way to keep your emails relevant. Got questions about the best ways to segment your list and get the most out of your promotional email campaigns? We can help! Click here or give us a call at 215-489-9336 to learn more.