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How do I use list segmentation to improve engagement?

Segmenting your email list is the process of breaking down your list into small pieces in order to send more targeted and relevant email to subscribers. While it is sometimes appropriate to send one type of email to a national audience, engagement rates are likely to increase when using list segmentation.

Keys to effective segmentation 

  • Start with a simple plan: Choose one or two segments that fit your business. 
  • Test each segment: Test small sets of subscribers to determine which segments fit your business and get the best results.
  • Target additional segments over time: Over time, add more granular segmentation as you learn more about your subscribers and the type of email and content they respond to the best.
  • Measure performance: Finding segments that produce good results may take time and segment behaviour can evolve along with your business.

 How to get started with a basic segmentation strategy and plan 

  • Determine the goal of segmenting your list: Is your goal to bring people to your website, introduce new prospects to your solutions, service existing customers with product information or something else?
  • Determine what data is available to segment: Your list segments are only as effective as the quality of data you have.
  • Determine if the data you have is the right data: For example: If you sell clothing, gender is likely a good piece of data to have since it can allow you to send different emails to men and women based on their clothing needs. What attributes about your business and your customers are important?
  • Develop a plan for getting the right data: Do you need to modify your website or email sign up process to collect better data? Make sure the data collected about subscribers and customers for your business is being captured from all available sources. A good preference center or customer survey can be effective to help you get the right data.
  • Determine your estimated testing time period and launch date: Allow enough time to test different segments. If you send daily, testing for a couple of weeks may be enough to determine if the segment performs well. If you send monthly, you should test for a few months.
  • Determine what content and offers will be used for your segments: Once you know what segments you have, determine what content, offer and design choices will target that segment to help you reach your goals.

 Segment ideas to help you get started

  • Engagement level: Determine how your customers engage with you. Engagement may mean when they last read an email, clicked through to your website, logged into their account, attended a webinar or made a purchase. Look at the behavior of those customers that engage within 30/60/90/180/180+ days. You may find that after a certain time period, engagement decreases noticeably. You can then target subscribers who have not engaged when they approach that time period with a special offer.
  • Purchase history: Are there any patterns to when purchases occur? Do some people purchase at the same time of year or near a holiday? What products do they buy? Do people that buy a product also buy complementary products? A popular technique is to determine complementary products to a recent purchase and promote those products.
  • Prospects: Prospects have different needs and interests than customers who have already purchased from you.
  • New customer: A new customer may need educational material and tips on how to make the most of their purchase.
  • Existing customer: A long-time customer is familiar with you and what you have to offer. How can you add value for these customers?
  • Demographics: Standard marketing demographics include attributes such as gender, age, income and nationality. Do any of these attributes apply to your business? Do baby boomers buy more or less than millennials?
  • Location: Are there patterns related to where your products sell based on the customer’s city, state, country or region? Do regional weather patterns and seasons have an impact on purchases?

Executing your segmentation strategy and plan 

  • Prepare your segments: Organize your segments and apply a naming convention so they are easily understood when discussing performance and viewing reports.
  • Develop the content: Design and create the content you think will get the best response from the target audience.
  • Start testing: Perform a simple A/B split test on a small subset of subscribers for each segment to find out what content and offers resonate most with your subscribers or customers.
  • Launch: Once you feel comfortable with the test results, launch your segmentation program.
  • Track your progress: Keep track of performance to ensure the segmentation program is helping you achieve your business goals.

Tips for creating effective segments 

  • Allow your subscribers and customers to help you segment via the preference center or by sending customer surveys asking for additional information to help serve them better.
  • If you are not getting results you want, don’t be afraid to try different segments. It may take a few times to create the right segments and content that fits your business.

 Potential pitfalls 

  • Doing too much in the beginning: There is nothing wrong with being ambitious. Results are important. It can take time to learn what segments are the best fit for your business, so starting with a basic plan helps you determine how segmentation fits with your business and gives you confidence to try new segments and add sophistication in the future.
  • Trying to fill in data gaps using a third party: It can be tempting to buy data from a third party, but that data may not be accurate and could lead you down the wrong path and cause you to waste valuable time and resources. If you have data gaps, simple changes to your sign up process or creating a simple preference center can help fill those gaps.
  • Not testing: If you don’t test different segments and content, you risk spending time and resources on segments that don’t give you good results.
  • Misunderstanding your customers or target audience: Ensure you determine what customer characteristics are most important and applicable to your business. For example: Do gender differences factor into your business or is age more important? If gender doesn’t matter to your business, then sending targeted content based on gender probably won’t give you good results.
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