Segmentation is a popular tactic to take your email marketing to the next level. It can bring you more success, but segmentation efforts also cost money and resources. Yet if we examine our list management closely we must ask: is our segmentation giving us what it should?
How Segmentation Works
Take the example of a sports retailer. He normally sends a general catalog newsletter to his email list to promote his store and the sporting goods he sells. But a special on tennis equipment will work best if he sends it to the people interested in tennis. The people only interested in basketball just won’t care about tennis rackets so he can send them a special on basketball goods.
Overlap and Digging Deeper
That is basically how segmentation works; you divide your total email list into different pieces based on the profile information, behavior or characteristics of the recipients. People can be in several segments at once (like tennis and basketball). Information on the recipients can also be combined, allowing you to send even more targeted communication. If the offer was for tennis clothes, you might also want to segment the offer by gender so the men won’t end up with an offer for discounted tennis skirts.
Cost of Producing Different Versions
How are you going to produce different, more targeted versions of the email? If they are going to be totally different, you are adding production work for each extra segment you target. Another option is to go more efficient, reuse content and change only certain parts of the emails. For instance, by using one template and showing different offers via dynamic content blocks.
Why Segmentation Doesn’t Always Work
But not all segmentation works out the way you had expected. Sending more targeted messages might mean that you are missing the mark with a too narrow focus. Or you might conclude that your data (e.g. preferences) are not of the quality you thought. So before you commit to a whole different email program for each segment, first test if it is worth the added effort.
Starting Small Is Much More Efficient
Depending on the scope and magnitude of your segmentation plans, you might decide to segment by starting small. Starting small, you first single out one or two segments with the most potential for effect. Then run an A/B split test with a targeted email next to the general email you would normally send. Do you see any difference? Sometimes you might need multiple tests or a longer time to see the effects, but if the results really don’t show or are very minimal, it might be more efficient not to segment. Or….
Back to the Drawing Board
Before saying “segmentation didn’t work, we tried it…” think about the other possibility. It might just be that your communication to that segment didn’t work. That means back to the drawing board. It might also mean that your method and characteristics segmented upon didn’t work and you should divide the list in a different way.
Effective Segmentation via Success Metrics
One way to discover effective segmentation is to look more closely at the behavior of your list: the differences between the people that always click, the ones that sometimes click and the ones that rarely click. Look at the differences between the people that buy and the ones that don’t, the ones that convert and the ones that don’t. With the use of analytics you can see if there are similarities in these groups and you can see for whom your current communication is working and for whom it isn’t.
Indirect Segmentation Criteria
The example of the segmenting sports retailer is directly one on one. The clearer the product, the easier it is to define target groups. But in many other businesses the criteria are not that obvious. Or they might be, but the profile information needed is very hard or expensive to come by. So then you might want to look beyond that and segment based on other information, like behavioral data or customer lifestyle information not directly linked to your product. But who said segmentation needed to be about your product? Adjusting the way you communicate and present your emails and offers might just be the key to more success in email, divided by segment of course.