Everything You Must Know About Email Marketing Segmentation for eCommerce in 2023

No matter what industry or vertical you’re in, there is one inevitable marketing truth we can all agree upon: Personalized offerings convert better.

According to Smart Insights (1), 48% of consumers spend more when their experience with a brand is personalized.

On the flip side, even more people — a staggering 74% — become frustrated when content has nothing to do with them or their interests. So if you seriously want to squeeze every drop of income and other value (like customer loyalty, brand awareness, etc.) out of your list, you need to take your personalization beyond using a contact’s first name.

So how can you improve your open rates and clickthrough-rates via better personalization and increase sales and revenue through your campaigns and automation?

Simple: Start with your segmentation.

What is email marketing segmentation?

The practice of splitting an email marketing list into smaller, more targeted groups or segments based on specific characteristics or behaviors is what we know as email marketing segmentation.

The purpose is to tailor email messages to the needs and interests of each segment, resulting in higher engagement and conversion rates.

Segmentation can be based on a variety of factors, including demographics, psychographics, behavior, and customer journey stage. But don't worry, we would go over each one more deeply later.

Why email marketing segmentation is important?

  1. They help you personalize your content on a near 1-to-1 basis
  2. They can help uncover new growth areas, customer interest, and opportunities.

Other reasons why email marketing segmentation is important just to name are:

  • Increased relevance: By segmenting your email list, you can create more targeted and personalized messages that are relevant to the specific interests and needs of each segment. This can lead to higher engagement and conversion rates, as subscribers are more likely to respond to messages that are tailored to their preferences.
  • Improved engagement: Segmented email campaigns often result in higher open and click-through rates, as subscribers are more likely to engage with messages that are relevant to their interests. This can lead to increased customer loyalty and advocacy over time.
  • Better ROI: By sending targeted messages to specific segments of your email list, you can improve the effectiveness of your email marketing campaigns and achieve a higher return on investment (ROI). This is because you are spending your marketing budget more efficiently, targeting subscribers who are most likely to respond to your messages.
  • Reduced opt-outs: When subscribers receive irrelevant messages, they may be more likely to unsubscribe from your email list. By sending targeted and relevant messages, you can reduce the number of opt-outs and maintain a larger subscriber base over time.

As we said, overall, email marketing segmentation is an effective way to improve the effectiveness of your email marketing campaigns and build stronger relationships with your subscribers and that's why you should implement it.

Email marketing segmentation best practices

However, to get the most out of your segmentation strategy, it's important to follow best practices that will help you achieve better results. So before we talk in deeply about email marketing segmentation strategies for eCommerce, keep in mind these best practices to help you get the most out of your marketing campaigns:

1. Define your segments

Start by identifying the characteristics or behaviors that are most important to your business. This might include demographics (age, location), psychographics (interests, values), behavior (purchase history, website activity), or customer journey stage (new leads, loyal customers). Use these criteria to define your segments and create targeted messages that are relevant to each group.

2. Keep it simple

 While it's important to segment your email list, you don't want to create too many segments or make the process too complicated. Start with a few key segments and test your messages before expanding your segmentation strategy.

3. Personalize your messages

Use the information you have about your subscribers to personalize your messages and make them more relevant. This might include using their name in the subject line, tailoring the content to their interests, or sending targeted offers based on their purchase history.

4. Test and optimize

Test your email campaigns to see what works best for each segment. Try different subject lines, message content, and calls to action to see which messages resonate the most with your subscribers.

5. Monitor your results

Keep track of your email metrics (open rates, click-through rates, conversion rates) to see how your segments are performing. Use this data to refine your segmentation strategy and optimize your campaigns over time.

6. Respect your subscribers' preferences

Make sure you have a transparent opt-in process and honor your subscribers' preferences for how often they receive messages and what types of messages they want to receive.

By following these best practices, we guarantee that you can create targeted messages that resonate with your audience and achieve better results for your eCommerce. Now that we covered that, let's dive into what you look forward to email marketing segmentation strategies.

12 email marketing segmentation strategies

So here we are. Whether you're new to email segmentation or looking to refine your existing strategy, pay attention to these 12 strategies that aim to help you optimize your email marketing campaigns and build stronger relationships with your subscribers.

1. Demographics and location segmentation strategy

Demographic and location segmentation is pretty much exactly what it sounds like. Depending on the information given you can divide your contact list into smaller groups based on geographic areas or information about themselves.

There are many ways to do this. You can divide the list by country, state, city, or zip code or base it on demographics like age, gender/identification, income, and occupation.

This particular segmentation strategy can help you to send these types of emails:

Location-based content

For instance, let’s say you sell funny t-shirts and since you split your list by location, you find that a vast majority of your subscribers live in Oregon. An email you might send around football season only to this part of your list could inquire if they’re a Ducks or Beavers fan. You’ll likely get quite a lot of engagement since the topic is personalized to the location of your subscribers. Plus, you’d find an opportunity for a new product and new interest.

Location-based content

Better timed emails

If half your list lives on the East Coast and the other half lives on the West Coast, then sending your list out all at once could mean some people getting emails way too early in the morning to be effective. Sorting your list by location can help you send emails that are better suited for various time zones.

Age or birthday data for personalized emails

Collecting this type of information can be difficult, however, many find success in gaining this data through a loyalty or rewards program where people are more willing to give out this sort of information.

Age or birthday data for personalized emails

Geo-specific promos

Not every email needs to go out to every person on your list, especially if the content curtails to only a specific part of the list. For instance, if you’re launching pop-up shops in North Carolina, people on your list outside of that area probably don’t need to know it.

2. Product purchased segmentation strategy

With a product purchased segmentation, you can start to bracket people into areas of interest based on the products they’ve purchased in the past.

Turning this type of segment into sales isn’t as hard as you may think; it just takes a bit of creativity to connect the dots.

Product purchased segmentation strategy

Here are a couple of examples:

Create a product cross-sell segment

If someone purchases the pants of a kid’s school uniform, then chances are they’re going to need the top too. So, it makes sense to create a segment with a set of conditions that bracket together the people who only bought the pants but not the tops

Automated emails for products with a shelf life

If you run a coffee eCommerce brand, you could segment by product or add various product-related tags to your ESP. That way, when a customer buys a specific type of coffee (i.e. Ethiopian coffee beans or Peruvian coffee beans) it would automatically add a product tag to their contact profile.

Automated emails for products with a shelf life

You can set it for all of your products, or bracket those products by interest and let your email marketing tool segment those for you on autopilot.

3. Order numbers segmentation strategy

Like the strategy above, this is also based on product purchase behavior. Creating segments based on the number of orders a certain customer has made gives you a clear view of the relationship your brand is building with this person.

People who purchase more often generally need less time to convert and tend to spend 300% more than first-time customers. Segmenting this way gives you a fantastic VIP customer list that you can target with better, more personalized emails — and that’s worth its weight in gold, almost quite literally.

Here are some suggestions for how to use this segmentation strategy:

Create a one-time purchase segment

The segment will help you identify those first-time/one-time buyers and gives you a list you can upsell various products to so you can increase the chances of a second purchase.

To make your segments work even better, you can then have automations set in place so that when someone is added to this segment, they will get a welcome email series that can promote other products along the way.

one-time purchase segment

Create multiple repeat customer segments

By creating segments for people who purchase 2/3/4/5+ times from you, you’ll have growing, highly segmented lists that you can continue to target with better emails over time.

Create a VIP list segment with conditions

What is a VIP list, exactly? It’s a list of your best customers, and you can create a segment of these based on the number of orders they’ve placed. The more they’ve purchased from you, the more likely they are to be a VIP for your brand.

You can give this sort of segment some conditions to get very specific if you like. For instance, you could have the segment created to collect contacts who purchased from you 3 times in the past 12 months with an average order value of $50. This gives you a list of repeat customers who regularly spend that amount. Meaning, you can target them with orders around $50 and have less friction in getting a sale at that price.

VIP list segment with conditions

4. Last order price segmentation

The price attributed to past purchases is important in helping you find customers willing to spend more.

For instance, there may be some customers who order often and in any given year spend $300. On the other hand, you may have other customers who order fewer times but spend $1000+ each year. Sure, they’re not purchasing as often, but they are spending more than those who buy more regularly. That’s an important behavioral pattern to identify, and you can do that with segmentations based on the purchase price of their last order.

There are couple of ways you can set this up:

Create basic segments based on price

You can usually set these parameters based on a “more than” or “less than” condition or within a specific range. It would be good to take a look at your product’s price points to give yourself an idea of the range you want to create. It could be from $10-$50, $50-$100, $500-$1,000 or any way that works for you.

basic segments based on price

Create a more specific segment with purchase price and conditions

After you’ve set conditions for a price point for their last order, you can add other parameters to the segment to create something more hyper-focused. For instance, you could create something like the example below.

more specific segment with purchase price and conditions

Not only would you find customers in a certain price range, you would find ones who live in a specific area.

5. Product category segmentation strategy

While sorting contacts by specific product purchases give you a hyper targeted list you can send to, segmenting by product category gives you a broader view of customer interest.

Why is this important? Good question. When you know that people have enough interest in a product to buy it, there’s an increased chance of them being interested in other products that are either in the same category or in categories that complement the one they bought.

When you segment by category, you can create highly targeted cross-selling campaigns to a purchase ready audience.

When you’re able to get your message more personalized to your customers, and you’re being helpful by offering products tailored to them, not only are they more likely to engage with your emails, they’re also more likely to purchase. And that’s the ultimate goal of your eCommerce email marketing; it should drive revenue.

category segmentation strategy

Here are a couple of examples of the types of product category you can create:

Basic product category segmentation

You can create a segmentation for each of your product categories, and even though it will take some time to do this, I highly recommend the effort. Each eCommerce email marketing platform has a different way to create these, but this is typically how we create these segments in Sendlane.

product category segmentation

Advanced product category segmentation with conditions

By adding And/Or conditions, you can create a more advanced, custom product category segmentation.

 product category segmentation with conditions

6. Device type segmentation strategy

In the past 6 months alone, 79% of people have used their phone to make a purchase online. With data like that, it’s easy to conclude that most of your customers are coming to your site through mobile.

A segmentation based on the device people use to subscribe to your list gives you a clear cut view of the device type people most commonly use to sign up.

But why do this?

It’s important to know what your customers are using to interact and engage with your site. Once you understand what you’re dealing with, you will have better-informed marketing efforts moving forward.

For example, if a lot of your customers sign up via a smartphone, then you may decide to double down on SMS marketing campaigns to boost traffic and conversions. The point is, this segmentation gives you data you can turn into action that powers your marketing forward.

To do this segmentation, create a segment for every device type:

  • Mobile
  • Desktop
  • Tablet
type segmentation strategy

There are a lot of applications for segmenting by device. And like you see above, you can mix and match different segmenting types to create an advanced segment that fits into your goals.

7. Website activity segmentation strategy

One of the best things about marketing automation is that it can track your existing and potential customers’ behaviors and movements.

Imagine being able to track subscribers who have opened emails from you but haven’t visited your website in a few weeks. Then, on top of that, being able to target them specifically with a campaign that gets them clicking through and (hopefully) making a purchase.

Tracking website activity gives you a lot of data that you can then use to segment your list.

Segment based on their last purchase date and site activity

One benefit of tracking site activity with an email marketing automation tool like Sendlane is that you can keep tabs on people who purchased something from your site but haven't purchased anything in the past 60 days. A segment that puts these people on a list gives you a chance to create more personalized and targeted campaigns. Here’s an example:

Website activity segmentation strategy

8. Contact engagement segmentation strategy

While they may sound similar, contact engagement is different from website engagement and it’s important to know the difference.

Where website engagement focuses on tracking the behavior of customers as they interact with your website, contact engagement tracks the behavior of customers as they interact with your emails.

This is a smart segment to create for your eCommerce brand because you could trigger a reactivation funnel for anyone who lands in that segment to win them back and get them buying from you again.

engagement segmentation strategy

That’s not the only way to use the segment type so here are some examples of how to create them.

Segment to track inactive subscribers

Not everyone on your list is a customer. However, they were interested enough to join your email list and still have the potential to become a customer (and a great one at that). The basic flow for this segment would look like this:

Segment to track inactive subscribers

Segment to track customers who’ve become inactive

This is a great way to keep track of people who have purchased from you, but for one reason or another, they haven’t been engaging with your emails. You can create a segment like this:

track customers who’ve become inactive

9. Customer lifetime value (CLTV)

Lifetime Value (LTV) is the metric many brands use to predict revenue and potential growth. Since email powers a lot of eCommerce revenue, the right email marketing tool can help you find the LTV of each customer.

You will want to figure LTV out for more reasons than you might think. Two lesser-known reasons are:

  1. Finding your best customers, and
  2. LTV generally collects all your customer data to give you revenue predictions

However, going a step deeper, we can look at customer LTV to figure out how much each individual customer is worth to your brand. This is really important because, with this segmentation strategy, you can find your customers with a high LTV and identify sub-groups of customers where you can improve LTV too.

Those segments would look something like this:

Segment customers with high LTV

This will automatically help you find customers who regularly support your brand. The basic flow would look like this:

Segment customers with high LTV

Segment customers with a lower LTV

Finding your paying customers, even with a lower LTV, gives you a chance to section them off and target them with campaigns aimed at increasing that LTV. The flow of this isn’t all that different from the one above

Finding your paying customers

10. Total revenue segmentation strategy

Imagine being able to segment a list that collects together your best, highest-paying customers into one place. Or finding the customers who spent less and then targeting them with personalized campaigns to increase their total revenue spent in a year. On top of that, you could see what they purchased and when. Sounds pretty great, right?

That is exactly what you can accomplish with an automated segmentation based on total revenue per customer.

Segment customers based on spending tiers

This segment is helpful for spotting trends in your customers’ purchasing behaviors. You can create a few of these segments to bracket together customers in as many spending tiers as you see fit.

Segment customers based on spending tiers

Segment customers based on how much they’ve spent and when

You can create these for each new year or even quarters. This can help you see spending trends and help you have a segment of current, active customers who are most likely to buy from you again sooner rather than later. You could build those segments like this:

Segment customers based on how much they’ve spent and when

Segment customers based on how much they’ve spent and when

You can create these for each new year or even quarters. This can help you see spending trends and help you have a segment of current, active customers who are most likely to buy from you again sooner rather than later. You could build those segments like this:

customers based

11. Average Order Value segmentation strategy

Like LTV, Average Order Value (AOV) is an estimated number based on the total amount of money spent per purchase to come up with how much each customer spends on average.

The value of doing this is similar to LTV: To find great customers and to find ways to increase sales to current customers.

Generally, I recommend creating 3 to start:

  • High AOV
  • Medium AOV
  • Low AOV
Average Order Value segmentation strategy

The actual price point within the AOV will depend on the pricing of your products. But once you discover the AOV of these different tiers, you can move forward with various campaigns targeted to the goals you want to hit for each tier.

12. Interests & Preferences

No matter what product you sell, as a marketer, you are in the business of selling emotion.

The more you know the interests, likes, and dislikes of the people you’re building a relationship with, the easier you can tailor your messaging to appeal to them.

That is why building segments about interests and personal preferences in your email marketing is so vital.

The way you’d build these types of segments is a bit different compared to the others listed out.

Mostly because you need to spend some time creating the email tags you plan to use in your campaign. There’s some strategy here as you don’t want to have a mess of tags to contend with. You can create tags:

  • Around best selling products
  • Cased on Product Categories
  • Gender related products
  • Specific preferences or interests (ex. Keto vs. Pescatarian diet. Wine lover vs. beer making enthusiast)

You can put the appropriate tag into an image or a link. Then, when someone clicks on that link in the email, they will have that tag added to their profile.

business of selling emotion

Building a segment around a tag is very easy. Just follow this flow.

Building a segment

You can build segments that use any of the strategies above to find even more profitable customer groups.

 build segments that use any of the strategies

How to get started with email marketing segmentation?

But if you're new to email marketing segmentation and still wondering how to get started it for your own eCommerce, follow these simple steps:

1. Identify your goals

Determine what you want to achieve through email marketing segmentation. Do you want to increase engagement, conversions, or customer loyalty? Knowing your goals will help you determine what criteria to use for segmentation.

2. Collect data

Gather as much data about your subscribers as possible. This can include demographics, behavior, interests, and past purchase history. You can use sign-up forms, surveys, and website tracking to collect this data.

3. Segment your list:

Use the data you've collected to segment your email list into groups based on similar characteristics or behavior. This could include factors such as geographic location, purchase history, or engagement with past emails.

4. Create targeted content:

Develop content that is tailored to each segment of your list. This could include personalized messaging, dynamic content, or special offers based on subscriber behavior.

5. Test and refine:

Continuously test and refine your segmentation strategy to optimize your campaigns. Analyze your data to see which segments are most engaged and which content performs best.

6. Automate where possible:

Use automation tools to send targeted messages to your segmented groups. This will save you time and ensure that your subscribers receive relevant content on a consistent basis.

Email marketing segmentation tools and software

Once you have a plan in place for email marketing segmentation, it's time to choose the right tools and software to help you execute it. There are many email marketing software that offers segmentation features, allowing you to divide your email list into groups based on specific criteria.

Some of the most popular email marketing segmentation tools and software include:

1. Sendlane

Offers a wide range of segmentation options. Sendlane allows you to segment contacts based on behavior, demographics, location, and custom tags, among other criteria. It also offers advanced automation and personalization features, as well as multivariate segmentation that allows you to test different combinations of segmentation criteria to optimize your campaigns. Additionally, Sendlane provides detailed analytics and reporting to help you track your email marketing performance and make data-driven decisions.

sendlane email marketing performance

2. Mailchimp

Offers segmentation options based on subscriber behavior, interests, and demographics.

3. Drip

Offers advanced segmentation options based on subscriber behavior and activity. It also allows you to create custom segments based on any combination of criteria.

4. Klaviyo

Offers segmentation based on a wide range of criteria, including behavior, demographics, and purchase history. It also allows for automated segmentation and personalized messaging.

5. Omnisend

Omnisend provides segmentation based on behavior, demographics, and purchase history. It also offers advanced automation and personalization features.

Get better email marketing results with Sendlane

By segmenting your contacts, you can reap great rewards for your eCommerce business.

This strategy enables you to recognize the unique characteristics of each customer and communicate with them on a personal level. As a result, you can significantly increase engagement and conversion rates, leading to higher sales, customer loyalty, and return on investment.

If you're ready to take your email marketing to the next level, try out Sendlane's 14-day free trial and experience multivariate segmentation for yourself!

Check out this article for more guidance and information: 8 Best Ways to Segment Your Contacts in Sendlane.

Email marketing segmentation FAQs

How do I test and optimize my email segmentation strategy?

You can start by setting clear goals and metrics for each segment, such as open rates, click-through rates, and conversion rates. Then, you can run A/B tests on different variables, such as subject lines, message content, and calls to action, to see what works best for each segment.

You should also monitor your email analytics regularly to identify trends and patterns and adjust your segmentation strategy accordingly.

How many segments should I create for my email list?

This depends on your business goals, audience, and available resources. It's important to balance segmentation with the amount of work required to create and manage each segment.

A good starting point is to create a few segments based on the most important criteria, such as demographics or behavior, and then expand as needed.

Can email segmentation help reduce opt-outs?

Yes, it can help reduce opt-outs by allowing you to send more relevant and targeted messages to your subscribers. When you send messages that are tailored to the specific interests and needs of each segment, subscribers are more likely to engage with your content and less likely to unsubscribe. This means that segmentation can help improve the overall engagement and retention of your email list, which can lead to better results and higher ROI.

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