I don’t find any reason why you wouldn’t use email segmentation to improve your ROI.
Nowadays, it’s believable that targeted campaigns based on segmentation are one of the best way to improve the ROI of the email marketing campaigns. But even with this known strategy is email marketing a success for all the email campaign marketers.
In an article, MailChimp found that segmented email campaigns scored better on nearly all measures of success when compared with those from non-segmented campaigns.
But even with segmentation, is your email campaign a success? The truth is; a successful email campaign depends upon identifying your objectives, i.e. what you want to achieve out of the campaign? In clear words, is your campaign all about:
- Generating Awareness of your product or services
- Generating Interest of your product or services
- Creating a desire to purchase your service or product
- Elicits an action.
Once you have sorted our objectives, the next step is to identify the relevant parameters on which you will segment your email campaigns.
Different Types Of Email Segmentation
Profile based segmentation
Profile based segmentation is the most common method of doing email segmentation. The most common variables used for profile based segmentation can be:
- Age: Different age groups have different preferences or likings. Segmenting people according to their age groups will ensure better open rates with your email campaigns.
- Gender: Segmentation using male and female version of an email is the most commonly used and successful methods of segmentation.
- Income: Buying habits of a person helps to identify the income of a customer. Promoting offers through your email to the right segment of people (dependent upon their income) helps to increase the response rates and the ROI.
Each of the main webmail services has its unique interface for displaying emails. For e.g. Yahoo Mail! has a preview pane while Gmail does not. Sometimes we fail to identify that a campaign report can mask problems at one particular domain. If you notice that while sending emails to gmail.com, you might have received no opens or clicks, in addition to few or no bounces, you can conclude that there is an issue with sending to that domain. In such scenarios it’s better to segment people based on domain to take corrective action for the problem.
One of the most tried and tested methods of segmentation are based on RFM (Recency, Frequency, Monetary Value). For e.g.
- Shoeline.com noticed that implementing RFM (Recency, Frequency, Monetary Value) strategy has increased the open/click rates by 31% higher to that of their traditionally segmented emails.
- Even EastWood Company experienced 20% increase in e-mail marketing revenue when they implemented RFM to their email marketing strategy.
Some of the behavioural aspects that you can consider while segmenting your email campaign for an online purchase:
- People who have registered but not purchased.
- The different types of products that users registered for buying.
- Users facing problems while trying to purchase a product.
- Returning visitors to the non-returning ones.
- Users who are completing the purchase over the ones who are not completing.
It’s not an unknown fact that behavioural segmentation has an impact on the online business. At the same time one need to identify that the behaviour of people changes from time to time. The analytics of your campaign report will help you to identify the behaviours of your online customers which will further help you to segment people based on different groups.
Geographical segmentation has an important impact in your campaigns. For e.g. when you are sending newsletter to your customers who are based in different geographical areas, it is a good practice to group people according to their geographical location before sending emails. This feature can be used to deliver different messages to different audiences defined by geographic location. For e.g.
- A retail store can send “Offer 1” to likely buyers in a nearby postal code and send “Offer 2” to buyers to measure the effectiveness of the offers.
- If your email campaign is about sending newsletter to people located in different geographical locations (e.g. America, India) to attend the medical seminars in UK, one must be cautious about the time difference in the two geographical locations before sending out emails to increase the open rates of the emails.
So the last question that you might have is ‘which segmentation is best for you?’. It depends upon what you are trying to achieve. If you are developing acquisition strategies, demographic segmentation techniques can be useful. For improving retention and customer life time value, classic behavioural techniques i.e. RFM can be useful.