Email Segmentation: How eCommerce Businesses can Segment their Email Lists

One of the best and easiest places to start from when segmenting your email list is by using demographics. In their simplest essence, demographics paint a picture of who your customer is and where they are.

Some typical examples of demographics include:

• Location
• Gender
• Age
• Marital status

A great example of segmenting according to demographics is creating a segment of customers with children. You can then create a campaign promoting children’s clothing.

So, how do you choose the demographics to use for your email segmentation?

Here are a few questions you need to answer in order to get the right answer for your business:

1. Is my product restricted to gender, age, or other demographics? Use one or a combination of these to segment your list.
2. What time zones are my customers in? Sending Emails when a subscriber is sleeping reduces the chances of your email being seen and opened.
3. Can I cross-sell a product they won’t use but might want for a loved one? This one works best with married subscribers and parents.

Segmenting your email list by demographics is a basic way of achieving your email marketing goals but it works. It’s often more effective if you sell seasonal products or those that are gender-specific.

People are bombarded by hundreds of emails every single day. According to research, the average person receives about 121 emails a day. Now that’s a lot of emails to keep track of, resulting in a number of them being ignored.

And this is exactly why you need to segment your email list by signup source. This is particularly important when running a welcome campaign.

Segmenting your email list by signup source allows you to connect with your recipient by reminding them where you first met. In a sense, they’ll feel like they are talking to an old acquaintance. This will help:

1. Increase open rates. When people remember who you are and why they signed up to your list, they’re more likely to open your email than if they don’t remember.
2. Win trust faster. Reminding people where you “met” will make them feel like you have something in common. This lends itself to enhancing the trust they have in you. And of course, trust always leads to better sales.

So what common sources do customers usually come through?

Here are a few to consider:

1. Lead magnet. Many subscribers come to join your email list by downloading a lead magnet that they found interesting. If your email list is big enough, you can even further segment it by the type of lead magnet your subscribers downloaded.
2. Coupon code. Everyone loves a great deal. That’s why coupons work so well in encouraging people to sign up for your email list. They are also a great way to tell the purchase intent of a subscriber.
3. Ads. If you invest in paid advertising and you get people to sign up through these, you can create a segment for these. Like the coupon lovers, these subscribers are highly likely to purchase.

Checking your subscribers’ signup source is a great way to know exactly what they’re looking for. This makes it easier for you to tailor an offer specifically for them. For those who signup closer to the bottom of the funnel, you can even shorten your lead nurturing sequence.

If your e-commerce store sells a variety of products, one of the best ways you can increase sales is by segmenting your email list according to subscriber interests and preferences.

When it comes to preferences in email marketing, this has more to do with how often your subscribers want to hear from you. Make sure to give your customers total control of this – it will make them love you more. Segmenting according to preferences makes sure that you give your subscribers just enough content to keep them satisfied – and looking forward to your next email. Another advantage of having a preference center is that you can use it to gather more data on your subscribers – data you can use to create other email segments.

As for interests, this deals more with the kind of products and content your subscribers like.

Segmenting your email list according to subscriber interest gives you a powerful opportunity to cross-sell or upsell. Because the customers in this segment already bought (or showed interest in) a certain product, chances of a well-crafted and highly targeted email can lead them to buy again.

This method of segmentation is especially powerful as:

• You’re targeting subscribers who are already engaged and interested
• It fosters brand loyalty
• Helps increase the LTV of your customers

Knowing what your customers want and giving them exactly that is a great way to foster a great relationship between you and them. This is because you prove that you care about their needs and interests.

Before people buy from you, they’ll first engage with your brand through your website and emails. And every single click, scroll, or page visited gives you a wealth of data you can use to create an effective segment for your next campaign. You can also use physical engagement (such as conference or tradeshow attendance) to create segments. Here’s a great example from Salesforce:

Let’s briefly look at how you can put this to work when marketing to your subscribers.

Website Engagement

When a visitor lands on your website, what do they do? Which pages do they visit? How many times do they visit a particular page? For those who dropoff, where do they dropoff?

While it may seem like you’ll need a psychic to get all that data, you don’t. All you need is a good behavioral analytics tool and you’ll have all this data at your fingertips. Data such as:

• Number of visits to your website
• Amount of time spent on a particular webpage (especially important are product pages)
• How far down the page they scrolled

These engagement metrics (and more) can be used to segment your subscribers. For example, you can create a segment for visitors who visit a particular product page more than once in a certain time frame. You can then send out an email offering a discount on that particular product.

Email Engagement

How do subscribers engage with your emails? This insight will help you further segment your email list to increase the effectiveness of your campaigns. Important email engagement metrics to track include:

• Email opens
• Click-throughs
• Most clicked links

You can create segments according to these metrics. For example, you can create a segment for those who regularly open your emails and a separate one for those who don’t open regularly. Or you could create a segment for those who open a particular product link but don’t buy. You can then give them a discount on the product or recommend a similar product (Amazon’s killer tactic).

Every time a customer buys one of your products you need to do a celebration dance. Not only because your business has made a sale, but because every purchase reveals more about your customer.

That’s why purchase history provides a very effective email segmentation opportunity.

When it comes to segmenting your email list, their purchase history is one of the most effective as it helps you provide ultra-relevant content to your subscribers. Particularly if your product is one that customers have to purchase regularly (like dog food, for example), you can use these segments for powerful marketing campaigns by:

• Sending reminders to order again
• Promote accessories
• Recommending similar products

So, next time your cash register rings, know that you’ve got another email segmentation opportunity. Or, in other words, an opportunity to increase sales by getting in your customer’s head and offering them exactly what they need.

Keeping an eye on your customers’ baskets is another great way to find out how to segment your email list. Let’s be honest, not all your customers have the same buying power. But at the end of the day a sale, big or small, is still a sale. And you have to do everything in your power to encourage all customers to buy. To do this you can segment your list by:

• Big spenders
• Average spenders
• Those who love sales and coupons

This will save you from promoting expensive products to everyone on your list, only to have your campaign flop. On the other extreme, running a campaign promoting items less than the average value of your big spenders will result in you leaving money on the table.

The above email is a great example of marketing to big spenders. The email copy is well crafted for those who are willing to spend a little more on a good night’s sleep.

However, no matter how much each customer spends, it’s important to woo your loyal customers with offers targeted for them. At the end of the day, they’ll become so accustomed to busying from you that they won’t dare go elsewhere.

When you recommend products to your customers and they engage with them, it’s a sign that they are interested in your offer. Even if they just click through to the product page and don’t buy, create a segment for them.

This email marketing strategy is effective because recommended products:

1. Increase shopping time. The more time shoppers spend on your site, the more likely they’ll buy something – either the recommended product or something else.
2. Result in repeat visits. Repeat visits can only mean one thing – the chances of the visitor purchasing something are high.
3. Give shoppers more options. More options means your customers will consider you as their one-stop-shop for their needs. This will result in customer loyalty and an increase in sales.

According to research, recommended products drive, on average, 24% of orders and 26% of revenue. Now, that’s one strong case for segmenting your email list according to engagement with recommended products.

One of the simplest yet highly effective segmentation strategies is to segment your customers according to the time they’ve been with you. This is particularly effective when the goal of your email marketing campaign is to foster brand loyalty. Whether your customer has been with you for a year or 10 years, showing your appreciation for them is a great way to achieve your goal.

So how can you use this type of segment?

Here are a few ideas to consider:

1. Celebrate anniversaries. Celebrating a milestone you reach with a subscriber is a great way to keep them engaged. Of course, there’s no celebration without a gift, is there? By giving them a gift in the form of a coupon or discount code, you’ll not only encourage sales but foster loyalty.
2. Reward long-standing customers. Everyone loves to feel appreciated – especially your customers who have been with you for a long time. Create segments for them depending on how long they have been with you. Once done, what better way to reward them than with exclusive offers?

Customers who have been with you for a long time are actually some of the most important people on your list and should be treated as such. This is because they have proven beyond a shadow of a doubt that they’ve made up their minds to make you their main supplier.

Cart abandonment.

It’s every e-commerce store’s nightmare. Yet, dread it as you may, it is a normal part of running an e-commerce store. In fact, research shows that cart abandonment rates are as high as 69.57%. While that sounds like doom and gloom, this is actually another marketing opportunity for the savvy marketer. That’s because a good marketer understands that shoppers abandon carts due to (among other reasons):

• High (or unexpected) shipping costs
• Finding the product cheaper elsewhere
• Researching the product before buying
• Getting distracted and forgetting to check out

When a customer abandons their cart, it’s important that you try and find out the reason. This will help you devise a solid campaign to get them to complete their purchase.

But to do that successfully, you’ll first need to create a segment in your email list for abandoned carts.

With this list, you now have an opportunity to recover a sizeable percentage of your abandoned carts. All you have to do is send a campaign reminding them of their (sad and lonely) abandoned cart.

And remember to improve your response rates by giving your customers an incentive to complete their purchase. Something as simple as free shipping or a discount code can work wonders.

Read more about Abandoned cart emails.

Just as cart abandonment is a normal part of e-commerce, so too are inactive subscribers a normal aspect of email marketing. But why does someone who willingly (and happily) gave you their email address suddenly stop engaging with your emails? Here are a few reasons:

• They got what they were looking for
• Your content has lost its relevance
• The email address is no longer in use

As long as a subscriber does not engage with your emails for a pre-determined period of time (usually 6 months), they are classified as being inactive. Action needs to be taken with these as they can negatively impact your campaigns and, more importantly, your sender reputation. And that’s one of the main reasons you need to create a segment in your email list for inactive subscribers.

How do you deal with this tricky segment?

It’s actually quite simple.

The first step after segmenting your list and creating a segment for inactive users is to create a reactivation campaign.

A reactivation campaign involves sending your inactive subscribers an email to try and elicit a response such as:

• An open
• A click
• Or even a purchase

It’s important when reactivating inactive subscribers to understand why they stopped interacting with your emails. That’s why you must ask them to either respond to your email with their reasons or ask them to update their preferences. Re-activating dormant subscribers will certainly result in a boost in your sales, so it’s definitely worth the effort.

What happens if some subscribers don’t engage with your emails?

As much as it may hurt, you’ll just have to let them go. Remove them from your email list – they are high risk low potential subscribers.