In 2021, it is a known fact that segmenting email campaigns for ecommerce companies lead to higher open rates, higher click-through rates, higher conversion rates, and overall better performance. In previous years, it was thought that following the “spray-and-pray” method, sending email campaigns to unsegmented subscribers, would lead to better engagement.
This “best practice” does the exact opposite guiding users directly to the unsubscribe button. Without personalization and segmentation methods implemented, email subscribers will be delivered email campaigns that simply do not make sense for them, wasting their time and yours. Email marketing is very much alive and email segmentation is one of the most important procedures to healthy email marketing campaigns.
In this QuaGrowth blog post, we will highlight five advanced email list segmentation tips for ecommerce brands for 2021. Let’s take a closer look at what email segmentation is, the importance and benefits of email segmentation, and the top five tips for advanced email segmentation strategies.
What is email segmentation? What are the types of email segmentation audiences?
Before we can accurately pinpoint the many benefits of email segmentation, it is key to understand what email segmentation is. Email segmentation is the email marketing technique of dividing an email audience into several groups rather than sending the same email campaigns to the entire audience. Email segmentation audiences can be divided into groups based on demographics, the position in the sales funnel, their email engagement, or personas.
Demographics include age, gender, location, occupation, income, or other data points relating to a certain population. The position of the sales funnel differs for each buyer. Some buyers are only in the awareness stage while others are defined as loyal customers. It is vital to deliver appropriate emails to the email subscriber based on their positioning within an ecommerce brand’s sales funnel. The level of email engagement also varies depending on the user’s activity with email campaigns. For example, email segmentation audiences based on level of engagement can divide subscribers that open every email campaign from subscribers that have not opened a campaign for five months. Lastly, personas, buyer personas, are what motivates your email subscriber. Do they engage with sales or are they making purchases regularly?
Why is email segmentation important for ecommerce companies?
Email marketing automation for ecommerce brands is powerful. Email segmentation for ecommerce brands is even more powerful. When using email segmentation practices, you are actively sending personalized, specific email messages to audiences that are most likely to take action or engage with that email campaign. By using email segmentation, your ecommerce brand is more likely to send emails to customers that value that type of content and less likely to experience unsubscribes, thus driving more conversions and having more potential customers. Why is email segmentation for ecommerce brands so important? There are a variety of reasons why email segmentation makes a giant difference.
A common misconception among the marketing community is that all customers are the same. If you feel that all of your email subscribers have the same buying habits or are enjoying the same things, you are mistaken. Customers are extremely diverse and your email campaigns must match their distinct behaviors and triggers. By implementing email segmentation practices for your ecommerce brand, you are improving your company’s reputation. Surprise! Email providers actually pay careful attention to what people think of your email campaigns. Unsubscribes happen, but seeing a spike in unsubscribes means something is going wrong. Most likely, your ecommerce brand’s email marketing tactics are not resonating with the audience on the receiving end. In fact, some email providers will actually flag the spike in unsubscribe if they feel your content is spamming email users lowering the email user experience. No brand wants customers complaining about the content that is entering their inbox. The lower amount of complaints received and the fewer unsubscribers against your email campaigns, the better sender reputation you will have resulting in a high deliverability rate.
Another important factor of email segmentation that was mentioned previously is improved engagement, but how do you get that key information? Self-segmentation is an aspect of email segmentation that ecommerce brands can implement. Let your subscribers help you find the right segment to place them in by asking your customers to tell you what they are interested in. This can be presented through multiple-choice questions or other formats. Give your customers the opportunity to directly tell you what they want to learn about. This will directly lead to higher engagement rates and will show your audience that your ecommerce brand actually cares about what they want to see.
What are the top five advanced email segmentation tips for ecommerce companies?
Now that you know what email segmentation is and why it is important, let’s discuss how to roll out an advanced email segmentation marketing strategy. Here are five of the most advanced and practical email segmenting tips to create for your online brand.
- The first advanced email segmentation tip for ecommerce brands is segmenting by the customer lifetime value. You are probably thinking, what is the customer lifetime value? According to Qualtrics (https://www.qualtrics.com/experience-management/customer/customer-lifetime-value/), customer lifetime value is the total worth to a business of a customer over the whole period of their relationship. This metric is quite important because it is far less to keep existing customers rather than acquiring new ones. Increasing the value of your ecommerce brand’s existing customers is a fantastic way to drive growth. The first purchase is an important one, but it is key to focus on those returning purchases and fostering loyalty with your customers. How does this apply to email segmentation for ecommerce brands? Well, when segmenting audiences for email campaigns, you are able to send special offers to existing customers and focus on retaining them. When sending out content, it does not make sense to send potential customers the same emails as existing customers. Customer lifetime value is essentially looking at individuals and figuring out which ones require what work to get the best return on investment. To calculate customer lifetime value, multiple average order value, average purchase frequency, gross margin, and churn rate. This total will equal your customer lifetime value. For more information, visit Exponea to gain additional insight into the customer lifetime value analysis (https://exponea.com/blog/customer-lifetime-value-guide/).
- The second advanced email segmentation tip for ecommerce brands is segmenting your customers based on the purchase type, value and behavior. Let’s face it, not everyone wants the same product on your website. We mentioned previously that existing customers are less expensive than acquiring new customers so ensuring that the appropriate email campaigns that make the most sense to the customer is key. Existing customers have one thing in common: they have made a purchase with your ecommerce brand before. But, that does not mean they have the same interests within your brand. If your ecommerce brand offers a variety of products, segment your customers based on what they have previously purchased. You can offer curated products that you know they love already or will love based on their purchase history. If your company offers similar products, segment your ecommerce email audience based on their average purchase order. If a customer tends to make larger purchases on your website, feel free to deliver email campaigns including the more expensive offerings. If a customer only makes purchases on sale items, it does not make sense to send emails that do not follow their purchase behavior. Have customers that love the newest products? Send those customers email campaigns each time you launch a new product. Another common purchase behavior includes seasonal shoppers or shoppers that only make a purchase during a specific time. Segment those buyers based on how they are making their purchases. For example, if a customer only makes purchases when their product runs out, send an email campaign based on the purchase cycle. Let’s say your ecommerce company sells coffee beans and you are aware that the average bag of coffee beans lasts four weeks, deliver an email campaign when you know the consumer will run out of the product. If a customer only makes purchases around the holidays, tailor your email campaigns accordingly.
- A third advanced email segmentation marketing tip for ecommerce companies is segmenting your email list based on whether the audience is typically using a mobile or desktop device. Optimize the email experience for the appropriate content consumption tool. The experience varies tremendously between mobile and desktop devices. What exactly are the differences? There are a variety of considerations when optimizing an email campaign for a mobile device versus a desktop. Consider the screen size, the user interface, the connection speed, and the viewing environment. There is much research pointing towards the trend of accessing email on mobile devices, but that does not mean you should neglect the users choosing the access email campaigns on desktop. Creating a responsive email design and then segmenting accordingly will lead to a better user experience for subscribers. You should be able to tell how the subscriber is accessing email campaigns from the e-mail list automation software you are using.
- The fourth advanced tip for ecommerce brands that want to segment their email lists is avoiding paralysis from analysis. We’ve talked a lot about different ways to segment, but an essential piece is to not overdo it, at least at the beginning. If you don’t know where to start, it is best to begin with somewhere around three strong email segments for your ecommerce brand. Figure out what you find to be most valuable and pursue those first. Study the data that comes back from your email campaigns and adjust as necessary. Keep in mind, a few segments are better than no segments at all. As you progress with your ecommerce brand email segmentation, become more granular with your email lists. The more personalized you get, the more success you will see with your ecommerce email campaigns. Seven-figure ecommerce companies are going to have many more email segmentation opportunities than boutique ecommerce companies.
- The fifth and final advanced email segmentation tip for ecommerce brands is tagging customers. What is a tag? A tag is a label attached to a message to categorize it and by assigning a tag, your ecommerce brand can organize your email analytics for better, more detailed email insights. Yes, it’s true. Every email marketer for ecommerce brands enjoys measuring the impact of marketing efforts. There is a core difference between a marketing email and a transactional email. Marketing emails contain commercial messages to nurture leads through your ecommerce brand sales funnel while transactional emails contact information to finish the transactional process with you and the consumer. For example, an ecommerce brand may send a transactional receipt for the consumer’s records. With tags, an ecommerce email marketer can ensure that transactional emails are performing well despite knowing that these types of emails do not perform nearly as well as marketing campaigns. By using tags, you can simply and efficiently track the performance of every type of email you send to support your ecommerce email strategy. Tags give you the opportunity to properly A/B test your email messages, experiment with call-to-actions, try different colors, and other important factors that you choose to split test in your emails. For example, for transactional emails, you can use a descriptive tag like “product-receipt” and “product-receipt-2”. This way, you can test two different versions of your ecommerce brands product receipts based on the analytics collected. When you utilize tags correctly, you can easily see which message type resonates with the audience and choose the version that ultimately performs the best. Tags can be used in the email segmentation process for every type of ecommerce company.
Any way you cut it, email segmentation reigns supreme in email marketing strategy for ecommerce brands. It is the absolute top way to send highly personalized, relevant content that will lead to higher conversions and resonate with your subscribers. With these five advanced tips tailored to ecommerce companies, your brand can stand out amongst competitors, create loyalty with existing customers, and meet the needs of prospects. Adding email segmentation tactics into your ecommerce digital marketing strategy will gather top-notch customer data for you to use to advance your processes, products, and overall company goals. This seemingly simple tactic of email segmentation for ecommerce companies is extremely effective and powerful to gain authority and drive purchases. To learn more about how to advance your ecommerce email marketing strategy, live chat with the QuaGrowth team on our website.