Right Message Right Person: What Is List Segmentation & How Can You Optimize It?
If you've got a larger or active email list that you've been marketing to but you want to improve conversion results from that list, Comm100 explains in this article what is list segmentation and how to segment your list into smaller, more targeted segments in order to drive higher conversions.
The Two Types of List Management
There are two phases to email list management, essentially. The first segment is acquiring a list of good, engaged users. The second segment is managing that list to optimize it. We've already discussed how managing bad email addresses and users who want to unsubscribe from the list can optimize your efforts. Here, we'll talk about how list segmentation can yield better results from your email campaigns.
What is list segmentation?
In short, list segmentation is creating smaller lists, or segments, from your larger list. This, however, can be done in many ways. For example, let's say that you have an email list of 1000 names. 500 of those people have previously purchased a purple pillow from you, and 500 of them have not. Sending one email to the 500 people who previously purchased a purple pillow and offering them a discount on a matching blanket and a separate email to the 500 people who haven't purchased the purple pillow that offers a discount when the blanket and pillow are purchased together will yield a better result than sending the same email to all of your users with a more generic offer.
The basic definition is that list segmentation is the process of pulling out portions of your list who are most likely to respond to an offer and then giving them that offer.
What are some good things to think about when defining list segmentation?
In reality, the best way to do your list segmentation is going to be completely unique to you, but there are some common ways to look at when splitting your list up.
User State: Whether a customer has actively purchased or interacted with you in the last week, last month or last year can impact the type of offer, email and creative that you want to use. It's common to send less generous offers to active customers and larger offers to try to stimulate activity out of lapsed or inactive customers.
Purchasing History: What types of products a customer has purchased in the past can tell you a lot about what kind of offer or email they will respond to. Creating list segments based on similar purchase histories can allow you to create very targeted and successful emails.
Customer Value: How much a customer has spent with you, the average amount of their order size, or how profitable they've been for you is also a common list segmentation. More valuable customers, or customers who spend more money don't necessarily need more generous offers, but they should be spoken to in email in a way that makes them feel important.
Geographic Region: One of the most common methods for list segmentation, splitting your list out by state, or larger geographic region, can allow you to use lingo, references and even graphics that create regionalized emotional responses.
Of course, depending on your business and what data you collect about those on your email list, there are many other logical possibilities for segmentation.
How Do I Get My List Segmentation Done?
Unfortunately, there's no simple way to create list segmentation unless you've built a fairly robust in-house database. This is a worthwhile expenditure of time and effort, however, because targeted marketing (of any kind) is always the best marketing. If you're just creating your user base now, be sure to build in query tools for data fields that you may want to create segments from. If you've already built a database, any good developer can extract the information you want with an SQL query as long as you've saved the customer information that you want.
What Are My Next Steps?
If you haven't been segmenting your list previously, we'd suggest the following as a way to get started.
- Have a team brainstorm session to think of all of the different groups of customers that you may have
- Then take those groups and come up with lists of ideas about how they should be spoken to and what offers or content would be most relevant to them
- Select the easiest segment to extract from your client list or database and then test sending a smaller email just to them.
Always compare the email open and email click-through rate of your list segments to the open and click-through rates when you send to your entire mass list. If the targeted segments are not doing better, then you've selected the segment, the offer or the content poorly.
While Email Marketing is, at base, a numbers game, getting the most out of the list that you have requires sending the most targeted messages possible. This is even more important currently, when people's inboxes are cluttered and they spend less time inside of them as they visit social networks (ebook – analysis: email marketing and social media) with time that used to be spent emailing. Making sure that the email you put in a user's inbox is something specific to them so that they'll want to open it is of huge importance these days. Once you have your mass email program under control, list segmentation is the next key to success.