E-commerce businesses understand there are vast amounts of revenue that can be generated through effective email marketing techniques. One of the most effective ways to improve email marketing performance is through the proper implementation of personalization and audience segmentation.
What is Email Segmentation?
Email segmentation is the process of grouping your email subscribers with similar qualities together. These qualities can be a variety of things, including:
- Prospects Who Have Not Purchased
- Returning Customers
- Loyal Customers
- Product-Specific Interest Groups
You will want to build these segments based on your current marketing goals, business model and the types of customers that frequent your shop. You will best know how to separate your audience.
How Does Email Segmentation Benefit My D2C Business?
Improved Personalization: By segmenting your audiences into specific groups, you can offer more personalized offers, messages and deals to your audience. In a recent study, 91% of customers say they were more willing to do business with a company that shared a personalized offer directly relevant to them. Personalization isn’t just using a first name. This also means showing customers products that they’re most likely to be interested in based on the view and purchase history.
Focus on Targeted Messaging: Each audience may have a specific problem that they are looking for your product to solve. Through email segmentation, you can create specific messaging that speaks to the problem of your target audience. For example, with email segmentation, you can highlight products that are “must-haves” for your first baby and share “new and improved” baby products for parents welcoming additional children to their families.
Improved Email Marketing Revenue: E-commerce businesses look to email marketing as a critical piece of their revenue generating activities. Marketers have noted a 20% increase in sales revenue when they create personalized email campaigns.
Where to Begin With Email Segmentation
It may seem overwhelming to know where to start when it comes to segmentation, but we break it down into a few simple steps.
Understand Your Sales Funnel
It is critical to understand how your customers interact with your brand from the first interaction all the way to conversion. By identifying different stages of the sales funnel, you can create segments that receive specific targeted messages that speak to their current state of mind.
Sales funnel position can indicate what they are looking for and what information is still desired before a conversion can take place. There are three basic sales funnel positions (TOFU, MOFU, and BOFU), and we will break down how they impact your email segmentation:
Top of the Sales Funnel (TOFU): Customers that are new to your business begin at the top of the sales funnel. They’ve likely only opted into your email list and are looking for messaging that is informational about your business, your why/mission, and what makes your brand unique in the market.
Middle of the Sales Funnel (MOFU): After the initial exploratory phase at the top of the funnel, customers are looking for information that indicates trust and quality of your brand. They are looking for information about your products, how they are different than what they can buy somewhere else, and customer reviews/testimonials.
Bottom of the Sales Funnel (BOFU): In the final stage of the funnel, you will want to focus your messaging on conversion. With proper messaging in the top and middle of the funnel, the sales pitch offered at the bottom will be well received.
Understand Your Audience Demographics
Approximately 90% of U.S. consumers find personalization of emails to be very or somewhat appealing. This means understanding your audience through a demographic breakdown is a great way to begin email segmentation and personalization. Demographics to consider include:
- Geographic Location
- Marital Status
To successfully segment with demographics, it is critical to understand how your product relates to gender, age, location, etc.
It’s also critically important to map out their individual pain points and what triggers would lead them to make a purchase with you. Create messaging statements that align with the pain points and demographics and you’ll have a winning formula.
Understand Your Audience’s Spending Habits
You will find you have loyal customers that repeat purchases, and you have other customers that only react to a killer deal. Understanding your customers’ spending habits is a great place to start when segmenting your email audience.
Segments may include:
- Highest Spenders
- Coupon Clippers
- Average Spending Customer
- First Time Buyers
The way that you speak to first-time buyers vs your best customers (highest spenders) will be very different. The offer and the hook will need to be customized based on their purchasing patterns.
You can also exclude certain segments from different campaigns and newsletters or send your very best customers a special gift.
Understand Product Life Cycles
Purchase history can be a great tool to leverage when segmenting your email audience. This is highly effective if you have a product that must be purchased regularly. Messaging to an audience that will likely reorder may include:
- Sending Order Reminders
- Promoting Complementary Products
- Pushing Subscription Models When Appropriate
E-commerce businesses can maximize engagement and revenue generation through email segmentation and personalization. Taking the extra steps to narrow your audience to specific segments, will allow you to craft highly effective targeted messages that can drive users to convert.