How Segmentation Supercharges Your Email Marketing and The Stats to Prove It

29 May
How Segmentation Supercharges Your Email Marketing and The Stats to Prove It

It was pouring down rain.

I was on the last day of a 3-day summer graduation trip to Disneyland, and being the brilliant teenager I was, I didn’t pack a jacket for the rain.

Eventually, I caved and decided to buy a poncho. Annoyed by being wet and knowing I had to spend $20+ on what was essentially a glorified garbage bag I grabbed the first poncho I found. Glancing at the tag, I read these words:

“One Size Fits All”

I was skeptical, but bought the item and tossed it over my already wet clothes. A quick look in a mirror confirmed my thought. Other than doing its job of keeping rain off my clothes, the item didn’t “fit” at all.

And guess what?

Email marketing blasts are a lot like that poncho.

You can brand them, send them, and get some half-decent results and sales.

But when you send emails designed to be “one size fits all” you’re going to have more than a few people on your list annoyed by how much your emails don’t “fit” them.

Can you guess what people do when they get these types of emails?

According to Instapage’s findings, 52% of consumers said that if an email is not personalized they’ll go somewhere else.  

Personalization turns one-size-fits-all campaigns into emails tailored to each customer.

And the best way to create personalized emails, improve your customer loyalty, and boost revenue from your email marketing is through email segmentation.


3 Reason You Should Be Segmenting Your eCommerce Email List

In marketing, you’ll often find everyone making one proclamation after another. Everyone says what they’re telling you is something you absolutely HAVE to be doing as part of your marketing.

But most of the time, they don’t back it up with any substance.

We like to let the data do all of the talking.

After all, the proof is in the pudding, as it were.

We are hardcore believers in segmentation for eCommerce. Not because it sounds good, but because we’ve seen the positive effects it brings.

And, thankfully, the data backs it up.

If you’re skeptical, here are a few really important reasons why you should be segmenting your email list.

With data to back it up.

1. Email Segmentation Increases Overall Customer Satisfaction and Loyalty

eCommerce email segmentation stands at a unique cross point for both customer acquisition and retention.

In terms of customer satisfaction and loyalty, specifically, emails have a huge role in each one because they’re usually used as reoccurring customer-to-brand touch points.

This means that your emails will have a direct impact on how your customers feel about your brand. Multiple studies show that people expect emails and offers to be personalized to them.

71% of eCommerce customers get frustrated when offerings aren’t tailored to them.

Happy and loyal customers are what every brand should strive for because of much it impacts brand perception and profits.

Bain & Company found that even just a 5% increase in customer retention correlates with at least a 25% increase in profit. And Motista, says that customers who have an emotional relationship with a brand have a 306% higher lifetime value and will recommend the company at a rate of 71%.

But how does email affect customer loyalty?

Marko Merisavo and Mika Raulas had a similar question and decided to find the answer.

In their marketing paper,  they stated that "Consumers who had regularly received e-mail messages had strong brand attitudes; 75 percent of the consumers on the e-mail list reported purchases … and 74 percent had recommended the products to their friends.

Sounds pretty good, right?

Email is such a big ball hitter in customer loyalty that Starbucks uses it as part of their email marketing specifically for that purpose.

They started a customer rewards program and used emails to not only bring new people into the program, but to use it as a way to keep customers coming back.

By using emails to tell rewards members about upcoming specials, they get people’s attention and keep them coming back for more. But they don’t just use it for building loyalty for rewards customers.

You could do something similar by setting up a loyalty program for your online store and segmenting those customers to send them specific rewards emails and foster that sense of loyalty your brand can thrive on.

It’s just one example of how to use email to build customer loyalty, but the evidence shows that you can do it.

By segmenting your email list, you can offer customers the personalization they desire while also taking advantage of the power that consistent email marketing has on perception in revenue.

2. Email Segmentation Improves Open and Click Rate Throughout All Your Campaigns

One of the drawbacks for many brands who don’t segment their list experience is low open-rates and click-rates.

In fact, non-segmented email campaigns have a 14.32% lower open rate than segmented ones. And DMA noted that segmented, personalized campaigns increased open rate by as much as 26%.

Fewer opens means fewer clicks which ultimately impacts everything you do for your email marketing — especially revenue.

However, when you work hard to segment your list and find the areas of interest you can easily experience more opens and clicks from the segmented campaigns you send.

On top of that, if or when you do decide to send a broadcast campaign, like a newsletter, since you’ve worked on cultivating a relationship and interest, these emails can also experience a positive effect too.

Online pet retailer, DoggyLoot, took a very interesting approach with their segmentation strategy. They segmented based on the size of the dog the person owned so they could send owners of large dogs different content than those with small ones.

Turns out, this type of segmentation paid off big time. These were the results:

  • The open-rate went up by 10.2%
  • The click-through-rate was 410% higher than average
  • Increased daily total revenue by 13% (That’s a nice bonus!)

Another type of segmentation they created was based on the dog’s birthday, and the segmented birthday related email campaigns got amazing results too:

  • The open-rate went up by 28.1%
  • The CTR for these campaigns is 750% higher than their average CTR
  • Added 16% to daily total revenue

So does segmentation increase opens and clicks for eCommerce brands?

They totally do! And DoggyLoot is just one example of how well it can work.

But email marketing is more than just getting clicks.

It’s about ROI — revenue.

And segmentation definitely helps with that too.


3. Email Segmentation Boosts Your Revenue

We saved the best for last here.

Making money from your marketing efforts is the name of the game every business is playing at. So if you need a really good reason for email segmentation, this is it.

Numerous studies and surveys all speak to a single truth:

Email drives revenue. And what’s more, personalized emails drive even more revenue!

According to Jupiter Research, personalized emails drive 18% more revenue than just sending your average email blasts. And Forbes noted that personalized email offers actually drove 49% more impulse purchases and lowered the return rate on items purchased.

It may seem odd that sending to a smaller part of your email list based on their personal interests and circumstances would increase your income, but it really does work.

Consider the online brand, Johnny Cupcakes.

They had over 80K subscribers on their list but their email’s ROI wasn’t great. So, they decided to segment based on a simple data set:

Male and female.

Content and offerings meant for customers who bought menswear got one email, and customers who bought products designed for women got something else.

The result?

A revenue increase of 141%.

And that was just from one, simple, demographic-based segment. Imagine being able to increase your marketing ROI by that much.

While every brand is different, the fact that others see these kinds of results with email segmentation says a lot about the importance of doing so.

Segment and Grow

These are just a few powerful benefits that come from segmenting your email list. And as you know, every single area impacts a vital part of your marketing efforts.

And compared to other marketing tactics, segmenting your list has very low costs with high yields because segmenting features should be built in your email marketing platform.

If your current email marketing tool is falling short in the segment features department, give Sendlane a try. It’s free to sign up for a 60-day trial and we won’t even take your card to get started.

Wondering how to best segment your list? Leave your comments below.

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