Supercharge your brand’s email strategy with segmentation
Email should be a primary marketing channel for any e-commerce brand. Your email list is a way to talk directly to the people who are interested in your brand - it’s a constant, unlike current social algorithms. You can (for the most part) guarantee that if you send an email, it will arrive in the intended inbox as expected - a place where you have your customer’s undivided attention. You also have full ownership of your email list - again, unlike your social media followers.
But what do you do if you’re not seeing the desired results from your email marketing? This is a huge pain point I see for the small business owners I work with. There are so many factors involved in creating emails that convert. If you’re already covering the basics, like regular email campaigns and some basic flows, and you’re still not seeing impactful results, a strategic next step to explore is email segmentation.
But first - what is email segmentation?
Email segmentation is the process of dividing your list into smaller groups (or segments) based on specific qualifications so that you can better serve them with targeted content.
For example, let’s say you’re subscribed to a huge brand like Old Navy’s email list. If you’ve only ever purchased women’s clothing from them, they have likely included you in a segment that targets new women’s styles and sales, rather than sending you men’s and children’s updates. Or, if you’ve ever started a purchase online without finishing checkout, I’m sure you’re familiar with the Abandoned Cart emails that come shortly after! These are both examples of segmentation in action.
Why segment your emails?
It can feel scary to start segmenting your emails, especially if you don’t have a huge list - you may feel like you’re missing out by not sending every email to everyone. But think of it like this: you’re actually creating better customer experiences long term, which leads to happier, more engaged customers - who come back for more. Segmentation puts the customer first. It also increases your ROI (return on investment) by ensuring you work smarter, not harder. If you segment your content, you ensure that your brand doesn’t need to be all things to all people - while still achieving results.
If that’s not enough to convince you: segmentation also improves key email metrics, like deliverability and open rates, which can ensure less of your brand emails end up in people’s spam folders (especially as your list grows).
By contrast, if you don’t segment your emails, you risk:
Sending irrelevant info to customers. Let’s say your brand offers in-person stylist appointments at an NYC flagship. You’re better off sending that information to East Coast customers who may actually benefit, rather than those overseas or across the country.
Accidentally targeting customers multiple times for the same things. Maybe you have a coupon to offer for a specific product. You don’t want to re-send it to recent purchasers of that product - they’ll likely get upset or ask for returns.
Being considered spammy by major email providers. For brands with large lists (IE over 10,000 subscribers), email platforms like Gmail will flag senders as spam if every one of their emails goes out to every person on the list. Remember - segmentation helps improve metrics like deliverability, and this is a key reason why!
You and I both know that not everyone visiting your online store will become a buyer.
But what if I could help you to bump up that percentage?
Determining your segmentation goals
My top segmentation advice: always start with a goal in mind. If you’re going to spend time and energy creating a segmentation strategy, it should be because you have a key outcome in mind (and - spoiler alert - at least part of your goal outcome should always be an improved customer experience).
You likely already have some idea of your brand’s email pain points, but it’s a good idea to do a metrics audit at this stage and see where things stand. This is because good segmentation strategies rely heavily on data. We want to prove what isn’t working, and then test strategies to see where we can make things better. Time to look at some numbers!
What are key email metrics to look for?
If you’re unsure where to start auditing your current email marketing results, start with the following metrics:
Open Rate: this indicates how many people actually clicked into your email. Good open rates vary widely by industry and segment; for smaller fashion and beauty brands with under 5,000 subscribers, I like to see open rates of at least 40% (and ideally higher).
Click Rate: this metric indicates how many users clicked through to a link once they opened your email. Ideally, your email’s links should be directing users to your website and shoppable products. I like to see click-through rates that are at least half of your open rate - so if 50% of users are opening an email, you want 25% to be clicking through to the site.
Placed Order: this metric indicates how many users placed an order after opening an email. This metric will vary widely by product type and price point, but obviously, higher is better.
Different email marketing platforms have different ways of calculating this figure. In Klaviyo, you can set order attribution to occur within a certain number of days since a user interacted with an email. So, for example, you can decide that if a user places an order within 24 hours of opening an email campaign, the order is attributed to that campaign. You’ll want to determine this based on your product segment - for example, if you are a lower-priced beauty brand, you may look for a quicker turnaround time on placed orders than, say, a luxury clutch brand (where customers may want longer to decide on the purchase).
Bounce Rate: this number indicates the number of email addresses that a specific email could not be delivered to. This is important to monitor because, over time, a high bounce rate can lead to more of your emails being routed to spam. Ideally you should be in single digits of bounces per email.
Unsubscribe Rate: this indicates how many users unsubscribed from your list after opening a specific email. Lower numbers here are, of course, better.
It’s helpful to think of your Open to Click to Placed Order rates as a funnel: customers are progressing on a journey down the line as they open an email, feel interested enough to click into the site, and then (hopefully) make a purchase. If you analyze these metrics in tandem across your campaigns and flows, you’ll likely be able to identify where drop-offs are happening.
For example, if your open rates are very low, you’ll want to work on things like more compelling and personalized subject lines to encourage more users to open the email - that’s your number one priority, and hopefully that adjustment will feed into better Click and Placed Order rates.
What’s a “good” metric versus one to be concerned about?
I’ve given some benchmarks above for what I consider to be “good” metrics, but it’s important to remember that email marketing success varies widely across brands, product segments and price points. Most email marketing platforms, like Omnisend and Klaviyo, offer their own goal metrics per industry and list size if you do some Googling.
Klaviyo also has a new Benchmarks feature that I really love - they compare your channel’s performance versus an aggregated peer group to show your best- versus worst-performing metrics, like so:
(This feature is just another reason why I’m team Klaviyo all the way, for what it’s worth.)
Segmentation strategies broken down by goal
Once you’ve reviewed your metrics and gotten a sense of where things currently stand, it’s time to come up with some marketing goals you can achieve using segmentation. Here are some common goals to consider:
Improving deliverability
Deliverability is one of the metrics that might not seem super exciting - especially compared to, say, sales dollars - but is actually critical to monitor. If your list has poor deliverability rates, you’re more likely to end up in spam folders, which you definitely don’t want. Your email marketing platform has likely auto-created “Engaged” vs. “Unengaged” segments for your, using some sort of measurement like “activity within the past 30 days” (which you can also edit depending on your brand’s needs). Start by reviewing those and see if they’re functioning the way you’d like.
There are a couple of options when it comes to improving deliverability via segmentation. For starters, you can decrease your overall send cadence to the less-engaged segment of your list in order to improve open rate (which sends good signals to email providers). So, if you were previously emailing everyone once a week, you now only email unengaged users twice a month. You could also send a check-in email to subscribers who haven’t engaged in quite a while - something along the lines of, “Are you still interested in receiving these emails?” - and if they still don’t engage with that message, then maybe you know it’s time to remove them from the list for good.
It’s best practice to occasionally prune your list of subscribers who are really, truly dormant - but since it’s difficult to gain new subscribers in the first place, I tend to be very sparing about who I remove from a list entirely. There’s a big difference between a user who has made several purchases before, but recently took a one-month break from opening emails (maybe they’re just busy!) and one who hasn’t interacted with any email in over a year, and never made a purchase in the first place. Your segmentation strategy should vary accordingly.
Increasing sales from new customers
Email marketing is a great, consistent way to nurture interested browsers into active customers. If you’re seeing metrics like low list growth and placed order rates, it’s a good idea to try selling more to users who haven’t converted (just yet). To do this, you’ll want to target users who have been active on your site in some way, but haven’t followed through with making a purchase just yet.
You can segment customers by using prior activity metrics like:
Active on site
Viewed product
Added product to cart
Depending on your product assortment and price point, you might want to offer these customers some sort of incentive to make a first purchase - like a BOGO offer - or target them with an Abandoned Cart flow (if they started a purchase but didn’t complete it).
You can also send more product-forward emails to these customers so that they get a sense of what they’re missing out on - for example, if you are a cosmetics brand who wants to sell more of your signature foundation, maybe you send a campaign to users who have viewed the foundation (but not purchased!) that shows gorgeous user-generated content of happy shoppers wearing your foundation, plus their testimonials.
Retaining and nurturing existing customers
If you’re seeing problem metrics like high unsubscribe rates, low repeat purchases, and low average order value, you likely need to spend time nurturing (and winning back!) existing customers. This could look like segmenting by:
Lifetime spend: have they historically made purchases, but paused recently?
Time since last purchase/site visit: you’ll want to do some research here depending on your product type. If you’re a cosmetics brand users will likely return and repurchase more frequently than, say, a luxury handbag brand.
Another thing to consider is that some percentage of your customers may only shop at specific times, like around sales or big gifting holidays. How can you capture their interest during the rest of the year?
Offer them rewards for being loyal customers. Can you give incentives, like early access to new product launches or special coupons, to customers who have placed orders previously?
Consider asking for feedback from existing customers - perhaps in exchange for a gift card or gift with purchase. Once you’ve gained insights, you can cater to them with more of the content they want - maybe it’s helpful styling tips, brand heritage insights and more.
Personalizing customer journeys (for brands with large assortments)
Personalizing your customer’s email content is a broad goal, but one that will contribute to all of the other strategies noted above. It’s an especially important goal to pay attention to as your email list - or product assortment - grows. If your brand is growing but you find yourself with high unsubscribe rates and low open and conversion rates, it’s probably time to think about personalized email content.
Email marketing platforms allow you to segment customers by personal attributes like age, gender, location, and interests. Your brand’s strategy here is going to vary widely depending on your product assortment, price point and more (am I sounding like a broken record yet?). Some examples you could segment for include:
Customers who shop at your brick-and-mortar locations
Gen Z customers
Customers who shop for women’s clothing
This segmentation goal obviously includes the biggest lift on your part because it means you have to create additional content for different customer groups. If you feel overwhelmed by this - start small! Think about one personalized segment you could test for your specific product offerings, and work from there. You can always build in further segmentation later as you continue to test and refine what content works for your brand.
I’ve started segmenting! What comes next?
Like all things related to email marketing, you’ll want to start off with small steps and test them out thoroughly to see how performance is impacted. I like to suggest a progressive approach to segmentation, which is informed by two things:
The experiments you’ve tried already;
The size of your brand’s mailing list.
If you are a brand with under 5,000 subscribers, you’re best served by sticking to segments based on your email and e-commerce platform data. As your list grows from there, you may consider adding in additional data resources, like loyalty tiers or customer demographics (say, broken out by gender). I wouldn’t move forward to complex, multi-tier segmentation (IE “women customers who buy Valentine’s Day gifts”) unless you break into truly large-scale list numbers (like 100,000+).
If you aren’t seeing the immediate results you want from segmentation - experiment even further! A/B testing is great to combine with segmentation - although that’s a topic we’d need to explore more fully another day. Just make sure to give any changes you make at least 30-60 days of data before you drop them, depending on your brand’s email cadence. Segmentation helps you learn what’s most impactful for your audience, but you do need to give it time to work its magic.
Have questions? Get in touch. I answer all messages personally.
