Small Business Guide to Email Segmentation

An email marketing plan is crucial to the success of your business, but all your hard work is rendered useless if you don’t pay attention to your audience and who receives which emails.

Though it might not be at the forefront of your mind, there are plenty of reasons to prioritize the segmentation of your email lists. Targeting a specific group of your customers with email marketing content is a business tactic that can pay off quickly and in a big way. 

What is email segmentation?

Email segmentation is the process of categorizing all your email subscribers into lists based on various factors. You can choose the factors that separate your subscribers, like age, shopping habits or location. Create different lists, or segments, based on commonalities that subsections of your audience share – and then target them with content accordingly.

“You can make different segments related to different parts of your email campaigns,” said Abhishek Shukla, founder and editor at Product Guru. “Let’s say someone just joined your email list; now your first email will be a welcome email. Your subscribers will move forward and shift to different categories related to their interests.”

The best part is that email segmentation doesn’t need to be manual. “The email service provider software has the automation features that will do it automatically, and you just have to name your category and email campaigns,” Shukla added. 

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Why is segmenting your email important?

There’s more than one reason email segmentation is important. Let’s look at a few from small business owners who have found success with it. 

  • Easier follow-up emails: “By segmenting your email subscribers, you can trigger relevant follow-up email sequences after a period of time to keep customer engagement high,” said Jill Canes, founder of Face Forward Medical Aesthetics.
  • Tailored messaging: “We can use such segments to create highly targeted and valuable emails for each group based on their needs and behaviors,” said Camille Chulick, co-founder and CEO of Averr Aglow. “By doing so, list recipients get emails that are tailored to their shopping habits or interests and thus are more likely to respond and remain interested in further emails.”
  • Higher engagement: “[Personalized emails] build more loyalty and customer retention, since you’re giving them something they will more than likely use, or allow them to browse your site more when you give them discounts,” said Mika Kujapelto, CEO and founder of Laptop Unboxed. “It can also drive more sales to your website by using a personalized promotion or discount, since it increases customers’ chance of buying more than one item from your business.”

In addition, segmenting your email is important for your metrics all around. If you track your open rates, click rates, spam reports or other key metrics by segmenting your email lists, you’ll start to see those numbers get better and better. 

Benefits and downsides of email segmentation

The benefits of email segmentation might seem obvious, but it’s still worth explaining them. You might know what the benefits are, but you also need to understand why they matter.

Of course, nothing is without its downsides. While the ones mentioned here shouldn’t deter you from segmenting your email, you should prepare for them to mitigate the negative impact on your email marketing campaigns.

Benefits

One of the benefits of email segmentation is that you’ll get to see if your email marketing campaign is actually working. If it’s not, you’ll have the opportunity to correct anything that’s not going right.

“You’ll be able to see how a particular email campaign works differently for different lists, and you can then further customize it and improve on it in the future,” Canes said. “If you use email segmentation with automation, you can set up automated triggers such as cart abandonment or clicks on the links in a particular email message to trigger a highly relevant sequence of emails designed to move the customer closer to the sale.”

Another huge benefit is building relationships with your customer base through the emails you send.

“Segmenting your email list gives companies the ability to send more personal emails while still taking advantage of automation,” said Kara Hoholik, founder and CEO of Social for Good Co. “This builds trust, and in our online world, that’s hard to come by these days.”

Hoholik also echoed the sentiment that email segmentation is beneficial for tracking. “I like to encourage our clients to monitor their segments and use analytics to look for trends and find clues for ways to improve email marketing and content strategies.”

One benefit that all small business owners should pay attention to is how cost-effective email segmentation is. Cecelia Hunt, CEO of JourneyPure, said this is because you don’t have to pay advertising expenses per click or per impression.

Downsides

Canes noted that one downside of email segmentation is the management aspect.

“It can be difficult to manage multiple email subscriber lists, because some email marketing tools will charge you a higher price for having more lists,” she said. “There’s also a fair amount of testing that is needed to identify the right types of segmentation that work for your business.”

Digital marketing consultant Ariel Lim shared another potential downside: There are so many ways you can segment your list that you might end up with too many unusable segments – or create so many variations of your emails that it takes up too much time.

To combat that issue, put your email lists into zones. These zones should be specific enough to be helpful, but not so specific that you end up with more segmented lists than you can keep track of.

For example, think of how you organize your pantry. Instead of having a flour section, a sugar section, and an extract section, you could have a baking section that encompasses all of those things. All of the things are related, and you usually use them all together, so it makes sense that they would be grouped together. The same principle goes for your email lists. 

Email segmentation categories

The categories you segment your email list into are entirely up to you. However, you don’t want to get carried away and create such niche categories that you end up sending emails to only a few people at a time, or so broad that some subscribers are getting emails that don’t feel targeted to them.

To prevent that, consider your real-world customers. There are some standard and common categories that work best when segmenting your email list.

  • Demographics: This means segmenting by age, gender, position and location. “For example, gender may be an important type of segmentation for clothing stores,” Hunt said. “Location would be useful [segmentation] for a business that has multiple locations.”
  • Past purchases: “Existing customers who bought something may require maintenance add-ons or replacements after some time,” Hunt said. “You can also use this data to recommend similar products or accessories that would be needed for use with the original product they purchased.”
  • Position in the sales funnel: Hunt said that some businesses construct email flows, sending a targeted sequence based on where users are in the sales funnel. If a user has just signed up, for instance, it may be appropriate to send emails introducing them to your product or service.
  • Behavior: You can separate your lists based on how certain people have interacted with your emails in the past. Is there a group of people who always open your emails but never click on anything? Or a group that clicks through to your online store but never buys anything? There could even be a group for people who make it all the way to adding things to their cart but never check out. With this knowledge, you can tailor your messaging to each of those groups in turn.
  • Psychographics: “Businesses can utilize customers’ beliefs, hobbies, lifestyle choices, values, personality choices and more to help develop personalized emails that can help target more specified audience,” Kujapelto said. 

4 strategies for segmenting your email list

There’s still more to know about segmenting your emails lists. Let’s look at a few key strategies to optimize your campaigns and better understand your audience.

1. Don’t rely solely on analytics.

Building a relationship with your subscribers is important, as that can make or break a business. Hoholik suggests asking yourself questions about your customers as if they were people you know in real life to think about them as individuals. Analytics won’t give you that kind of information.

“I can’t emphasize this enough: Think about your own email inbox,” Hoholik said. “Which emails do you open? Don’t you readily know which emails are generic? Building relationships, community, and therefore trust is essential for any business.”

2. Test your emails.

It’s rare for a business to nail email marketing in one shot. That’s why A/B testing exists. You can mock up two separate emails that deliver the same message but change one key component, such as the subject line.

This strategy is especially good for your subscribers who fall into the “never open” category. You need to assess why they aren’t opening your emails. It could be because your subject lines sound like clickbait, aren’t interesting enough, or feel generic rather than targeted to them. People are inundated with emails every day, so they have to be selective about the ones they open.

Prevent too many subscribers from going permanently inactive or unsubscribing by implementing this retargeting campaign: Test two different subject lines and see which one gets a better response. This will help you with not only that specific subgroup, but all of your email lists.

3. Customize, customize, customize.

It will take more work, but customizing the emails you send to each group you’ve made will benefit you. This doesn’t mean taking the same email template and just changing a few words or adding someone’s name to it for email personalization – it means creating separate emails with different images, content and goals for each recipient group.

For instance, if you’re sending out an email to new subscribers, maybe you’ll include a first-time purchase discount. This wouldn’t make sense to send to your subscribers who have a rich purchase history with your business. For a more specific example, if a shopper has viewed a bunch of T-shirts on your clothing retail website, you wouldn’t send them an email about a sale on jeans.

What takes even more work is sending out transaction emails. These are the emails you send to one person if they’ve left something in their shopping cart or if something they’ve viewed on your website is running low or on sale. You will need to customize these messages even more than emails being sent to a subgroup. You can address this with an email drip campaign.

4. Send out surveys.

Sometimes it’s hard to gauge what a customer really wants from just their email engagement habits. Another way to figure out what they look for in an email from a business is to send out a survey with targeted questions. Ask them about their interests, what types of things they buy online, how often they shop online, their reasoning for opening an email or deleting it without opening, or what they find catchy or attractive in emails.

You can use this information in a couple of ways. It will help you sort that person into another email group and also tailor the emails to that group. Whatever group you find that person fits into, it’s likely the others in that group would have similar responses to the survey.

Email segmentation could help your email marketing plan take off

Don’t overlook segmentation in your email marketing plan. There’s no point in putting so much time and effort into designing emails and building your subscriber list if you don’t optimize your emails.

Once the subscribers start rolling in, segment them into the recommended categories above, tailor those categories as your list grows, and don’t forget that there are real people behind those email addresses – people who could turn into loyal customers if you do things right.

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