Two Trains of Thought
There are two trains of thought on whether to segment or not to segment an email campaign:
1) Not Segment: Just send an email campaign to the entire list since it takes a LOT of effort to create a segmented campaign and we just don’t have the bandwidth to create and manage that effort. Shot it out in bulk and we will reach recipients who convert.
2) Segment: Knowing your customer and fulfilling their needs is paramount in order to get customers to convert. Segmentation sends relevant and desired information to customers who will then act on that prompt to convert into a sale.
It is Too Complex
Compared to simply loading an entire email list for an email campaign, yes, segmentation does take more time and effort. It starts with data collection. The customer database must be design and populated with more detail than just an email address. Careful thought must be given to how the data is going to be used and on what elements segmentation will be based. On an ongoing basis that data MUST be collected from every email recipient, prospect and customer. That data must be analyzed to figure out who bought what and when they purchased it. Then future email campaigns must be designed to specifically target that group(s) to answer their specific needs. Behavior, trigger or lifecycle based segmentation can be very complex. This is a lot more steps then just sending the same email to the entire list.
Does it Work?
MarketingSherpa did a study in their 2009 Benchmark Guide that indicated segmentation of email campaigns produced at least 30% more opens and a 50% higher Click Through Rate than undifferentiated messages. MailChimp compare segmented and non-segmented campaigns and found that segmented campaigns scored better on nearly all measures of success. There are many other case studies bolstering the point that segmentation of email campaigns lead to higher open rates, higher order values, higher click through rates and more conversions.
How to Segment an Email Campaign
There are many levels of effort that can go into a segmented email campaign, from relatively easy to very involved. Here are some of the methods that may be considered:
1) Segment you list into active, semi-active and inactive subscribers. Design and send an email campaign that targets each activity level. This method simply requires an email address and a activity level measurement
2) Segment by basic demographic information, such as gender, age and/or geography.
3) Segment by customer activity level, which includes click through behavior and/or purchase history. For instance, if a certain group of customers has a preference for a particular product or service, then design campaigns that reflect that preference. For example, if a certain age cohort in a certain geographic area purchases higher end products from your total product list, then send emails to that group that meet their needs and desires.
Targeting emails to particular segments tend to lead to higher open rates, click throughs and conversions. Also, based on some ISP’s who use email recipient activity as an indicator of desirable/non-desirable (Junk/SPAM) email, the benefits of segmentation could also affect deliverability.
Is email campaign segmentation worth it to you?