Why smarter digital relationships begin with segmentation
We’re living in an era of exhaustion.
The 24-hour news cycle, coupled with algorithmic information delivery, has worn your audience’s receptivity down to a nub. As much as many marketers don’t want to hear it, there is no brand campaign that can override how much of your audience’s mindshare is dedicated to worrying about their present and the future.
Email segmentation can’t fix the world’s woes, either, but it can increase the likelihood your audience will have the energy to pay attention when your brand has something to say.
Email segmentation is the science and art of sending fewer emails that can have a larger impact on your brand’s revenue and reputation.
You’ll finish this article with the knowledge you need to start executing your own email segmentation strategy that drives better engagement and more conversions—all while putting your customers first.
Batch and blast vs. segmented email marketing: why intentional marketing wins
“I am always shocked when an ecommerce brand develops an email marketing strategy without list segmentation,” says Ashley Ismailovski, CRO operations manager, SmartSites.
“The batch-and-blast approach to email marketing is a thing of the past,” Ismailovski explains. “What consumers want now are personalized messages that keep them engaged with their favorite brands and allow them to receive only the most relevant content.”
As opposed to batch and blast—the practice of sending all your brand’s emails to your entire list—email segmentation is when you divide your master list of subscribers into smaller groups, or segments. You can segment your email list based on factors like:
- Online behavior: purchase history, website browsing, marketing engagement
- Psychographics: interests, values, lifestyle
- Demographics: age, gender, location
The goal of email segmentation is to develop audience-led content. When you divide your master subscriber lists into segments defined by certain characteristics, you can develop campaigns and automations that are hyper-relevant for those smaller lists.
You’ll know you’ve properly switched to segmentation from batch and blast when:
- Your email deliverability increases.
- Your unsubscribe rate decreases.
- Message engagement metrics—like opens and clicks—steadily climb.
- Your conversion rates start to go up.
- Longer-term brand health reports show your reputation is improving.
Results will ultimately depend on the quality of your data, how you segment your lists, and the content developed for each segment. DTC pet brand and Klaviyo customer Paw.com, for example, achieved a 145x monthly average ROI using email segmentation in Klaviyo.
Build a data-driven email segmentation strategy with these 4 steps
This is a given, but in order to deploy an email segmentation strategy for your business, you need two things:
- The ability to collect zero- and first-party customer data—information sourced directly through someone’s online behavior that they’ve consented to share
- A way to send emails
Good news: You don’t need two platforms to do this. Instead, you can invest in a platform like Klaviyo, which powers smarter digital relationships by pairing marketing automation functionality with a customer data platform (CDP)—housing data collection and activation tools under one roof.
Once you have such a platform in place, here’s how to start using it to build out your email segmentation strategy:
1. Collect subscriber and customer data
Without data, you have no segments. While you want to collect data with segments in mind (see step 2), you also want to cast a wide-ish net with your data so it can reveal segments to you via interesting online behavior.
If you need a place to start, here are some examples of useful behavioral data (below you’ll learn how to target some of these segments):
- Past purchase history or frequency: Separate the one-time customers from highly active ones.
- Website visit activity: Separate frequent visitors from people new to your website.
- Email engagement frequency: Track email clicks as an indicator of readiness to purchase.
- Customer reviews: Separate customers willing to leave reviews from the rest.
- Customer lifetime value (CLTV): Separate customers who spend the most—which may not be the same as purchase history.
- Acquisition source: Track where customers are coming from to land on your website.
- Last viewed products: Separate website visitors by product vertical.
- Abandoned cart value: Separate high-value carts from lower ones.
2. Determine your quantitative and qualitative criteria for segments
Every business is unique, so the way you define a “meaningful attribute” may be wildly different from other brands. As you gather data, you’ll start to notice patterns, which will add context when you’re answering questions like:
- Which range of metrics indicate a high-value customer vs. a lower-value customer?
- How many times does a customer need to buy to be considered loyal?
- What is the price discrepancy between a high-value abandoned cart vs. a low one?
A lot of your segment criteria may also be qualitative as opposed to quantitative. Paw.com, for example, segments their email list based on factors like pet breed, age, size, and even quirks like anxiety during fireworks. The brand attributes 30% of its YoY growth to emails, assisted by Klaviyo’s email segmentation tools.
“In Klaviyo, there are so many ways to segment our subscribers and then tailor these messages for them,” says Gina Finn, email marketing manager at Paw.com.
“The opportunities are kind of endless, which is really exciting,” Finn adds. “At the end of the day, we want to treat our customers’ pets like they’re our pets and part of our family.”
3. Set up email segments in your marketing platform
When you’ve gathered enough data and you’re clear on what some of it means, you can start segmenting your email lists.
As your list grows, you won’t want to create segments manually. This is where technology can step in, allowing you to set the criteria that determines when people join a segment.
Klaviyo’s segmentation features, for example, are dynamic, meaning they grow as people meet the segments’ conditions and shrink as people no longer meet them.
4. Monitor and adjust your segments based on performance
- Click rate
- Conversion rate
- Revenue per recipient
- Deliverability rate
- Unsubscribe rate
After you’ve collected enough real-world performance data, you’ll want to adjust, consolidate, delete, or segment certain segments even further.
Keep in mind that a subscriber can move from one segment to another quite quickly based on many factors, like a change in location or an action they performed—opening an email, purchasing, or abandoning a cart.
Sell more and connect better: 7 email segmentation ideas
Once you have a handle on the different types of segmentation that are most useful to your business, here are some ideas on how to pair the data you’ve collected on your customers with relevant content:
1. Newcomers to your business
New subscribers may not be ready to buy, but they’ve indicated interest in your brand. Affirm their decision to subscribe by sharing top product features, brand storytelling, testimonials, and customer reviews—emails that help them get to know you better, just as they would if they were meeting a person for the first time.
For example, this email by Keeps gives new subscribers a sampling of essential introduction content—they may want to click in to get to know their mission, or they may be ready to skip forward to learn about their flagship products. Keeps also includes a customer review at the bottom of the email, which may be enough to prompt people to scroll back up and claim that free shipping code.
2. Past purchase history
Your customers’ past purchase behavior includes what they bought, how much they spent, and how often they spend money with you. You can divide past purchasers into 3 categories:
- Customers who have made at least one purchase: If they signed up from a promotional offer page, they may be interested in discounts. If they signed up for a newsletter before buying, they may be more interested in educational or brand content. Try segmenting this group based on their expressed motivation.
- Highly active customers: Offer perks like exclusive sales, free shipping offers, and early access to new products.
Native, for example, is explicit with what each customer gets when they reach a certain status. This customer can expect early access to sales because they reached “Cucumber Connoisseur” status, with options for additional actions they can take to see even more perks.
3. Customer reviews
Make it easier to respond to positive and negative reviews alike by segmenting all customers who have left a review for your products.
Affirm a positive review by sending a note of appreciation, with an offer if they’ve left multiple positive reviews. On the other hand, you can also send apologetic messages to people who left negative reviews and you may just get a second chance with that customer.
Compass Coffee takes the review process one step further by using Klaviyo reviews to incentivize more people to submit a photo with their reviews. Using Klaviyo, Compass was able to set up a conditional split: If a review has a photo, the reviewer gets a 15% discount on their next order; if it doesn’t, they simply get a thank-you email and a reminder to leave a photo next time.
With this strategy, Compass saw a 3.7x QoQ jump in customer photos submitted—and a 70.5% jump in total reviews submitted.
4. Customer lifetime value
Also known as CLTV, customer lifetime value is how much a customer has spent with your brand thus far. (Note that with Klaviyo, you may also segment based on a future revenue estimate called predicted CLTV, which makes reasonable predictions on customer behavior using previous patterns.)
Try segmenting your customers into the following categories based on CLTV:
- VIP (all-time high CLTV): early access to new products
- Frequent purchasers: early access to sales
- Big spenders: exclusive product drops just for them
- Unengaged VIPs: deeper discounts on sales
Or, if you want to get more creative, follow Chamberlain Coffee’s lead.
This type of campaign could work well for frequent purchasers you’d like to re-engage, as it’s a bet that many people will enter the contest to make the brand’s $500 spend worth it—still a lower spend than a blanket discount, but an incentive to participate because of the excitement and novelty.
5. Acquisition source
Acquisition source is a particularly helpful characteristic for segmenting your welcome series—a sequence of automated emails new subscribers receive after they opt-in to join your marketing list.
For example, customers who subscribe to your list through a referral might trust you more as a brand, since you were recommended by someone they know. You may want to send this segment more pointed messages to purchase, as they might be more ready to buy than someone who subscribed to your list via a link on social media.
Some brands take an even bigger picture approach and segment based on whether a subscriber signed up at an IRL or online event.
For example, Marine Layer has one automated email send for in-store subscribers and another for online subscribers. Those who visit in-store are introduced to the brand’s website. For those who subscribe directly on their website, Marine Layer offers 10% off a next purchase.
6. Last viewed products
You’ll want to segment by last viewed products for your browse abandonment email—an email that goes out automatically to website or online store visitors who leave without adding any products to their cart or making a purchase.
Creating segments for all products may be an overwhelming task, but you can start by choosing 3-4 top best sellers.
Taylor Stitch, for example, segments their browse abandonment series by their top 4 product categories. People who view a category that isn’t included get more general content about the company’s most in-demand, lower-cost items, where this example is specifically tailored to people who browsed any item in the category of men’s shirts.
7. Abandoned cart value
For your abandoned cart emails, send compelling messaging without a coupon for customers with low-value carts. For customers who left higher-value carts behind, you can provide a discount knowing the ROI is worth it.
Pulp & Press, for example, guarantees 30% off on orders above $100 if recipients “hit that order button now” during their Cyber Monday sale, banking on scale and a higher price to offset any most lost through discounts.
Use email segmentation to earn the trust of your subscribers
We’ve given you a place to start with email segmentation. As you learn more about what your target audience wants, you’ll build out more segments personalized to the quirks of your business—ones we couldn’t have dreamed of.
“Keeping it simple will be a benefit when first starting out,” says Cassie Benjamin, email and SMS channel manager at Tadpull. “As you get your feet wet, you can begin to build out your flows to better personalize your messaging and strategy based on customer attributes and behavior.”