How to Use Email List Segmentation to Drive Sales for eCommerce
According to eMarketer, 39% of email marketers that practice list segmentation see better open rates, 28% see lower opt-out and unsubscribe rates, and 24% see better email deliverability, increased sales leads, and greater revenue.
Those are some pretty convincing statistics. And yet, most eCommerce companies don’t pay enough attention to email list segmentation. They continue to send the same daily sales notifications about the same products to their entire lists each day.
In this post we’ll dive into some email list segmentation tips – teach you why this is important, and give you some ideas on how to apply this strategy to your business.
Stealing a Tip From B2B Marketing
I bought a sofa last fall.
Before making the final selection, I visited three stores and scoured dozens of furniture sites. Numerous times, I tossed my email into the subscriber ring so I could get more information from the companies.
I’m still subscribed to these lists, and most of them still send me just about the same daily content as they did a year ago – Super Saturday Sales, 20% off “today only”… you get the point.
If this was software instead of a sofa, my experience would have been much different.
I’d be segmented into distinct paths early on in the subscriber relationship based on my actions on the site. In the beginning, I’d get a buyer’s guide. If I showed interest in that, then a demo. Then, as a final push, I’d get a case study towards the end of my research to nudge me over the edge with some third party validation.
The land of webinars and white papers may seem unrelated to consumer-facing eCommerce. But there are a few things to be said for how they (or we? :D) approach email marketing and the attention they pay to segmentation.
1) They pray at the altar of the lead.
Different companies have different definitions of what a lead is.
Nevertheless, the concept is overall the same. Every email address is viewed as an individual and viewed as a potential buyer.
2) They think about email nurturing in terms of a funnel.
B2B marketers view email marketing as a way to guide leads through each of the buying stages.
They pay attention to indicators of buying interest (looking at a pricing page is a stronger display of interest than reading a blog post) and use marketing automation to target those leads with content accordingly.
This approach is all about acknowledging the reality of consumer behavior these days. People do their research before they make a purchase.
Research is a combination of reading buyers guides, reading product reviews, and if applicable, seeing the product in person. Each action brings that person one step closer to making a purchase.
eCommerce marketers need to help potential customers through each research stage and send them emails that match their purchase interest level.
3) They slice and dice their lists, and then they slice and dice again.
When one sale can generate tens of thousands of dollars or more in revenue. So it’s no wonder that B2B marketers are willing to get granular. They’re willing to market on a small, or even individual scale.
This approach can still work for eCommerce even with the larger volumes of customers.
Potential eCommerce customers can be segmented into workflows so they get the proper nurturing materials based on on-site actions. Even with larger volumes of potential buyers, this can still be done by grouping subscribers into cohorts.
7 Ways to Segment Your List
Many eCommerce marketers are still unsure what kinds of segments they should make in their lists and how to make them.
We’ll address these questions to get you well on your way to list segmentation and targeted marketing nirvana.
As you may have guessed, the kinds of segments you’d want to make totally depends on your business and your overall goals with email marketing. There is no one-size-fits-all solution. But there are a lot of different options that apply to many different kinds of businesses, and these should be a good starting point.
1) Buyers and Non-Buyers
First things first, you should segment your list by people who have made a purchase before and those who haven’t.
Your goal with past buyers is to get them to come back and buy from you again. Your goal with those who haven’t bought before is to figure out what they have shown interest in and to help them research their way to a purchase.
2) Purchase History
What have they purchased before? Remember, your goal with this group is to get them to buy again.
With past purchase data, you have a number of different options for making that happen.
- For expendable products (shampoo, ink cartridges) or repeat services (oil changes) you can start with a logical run-out timeframe and target past buyers with reminders for refills.
- For fashion, you can help your customers build outfits with their past purchases and your store’s new inventory. Show outfit examples and help your customers develop a cohesive personal style. Remember – they are a walking billboard for your store. It’s in your best interest to help them to wear your clothes well and get others to ask where they got those clothes from.
- For electronics, companies can target past buyers with email content that shows them complimentary accessories.
3) Purchase Interest
What products have they viewed? What did they leave in the cart last month? Send could-be buyers more information about the products they are considering.
During my sofa shopping, it would have been helpful to get a blog post about how to arrange my sofa with other furniture or how to create a color palette around that sofa. It would have helped me imagine the sofa in my apartment more vividly.
This suggestion is for the “bricks and clicks” crowd. Online shopping is popular, but there’s a lot of stuff you want to see in person first. Case in point: Cars.
Using geography, you can invite could-be buyers to come and see their potential purchase in a store near them. Including the actual address and location of the store in the email will help them find you when they are out and about.
Additionally, geography can guide your email copy and help you build your brand.
New England just had one of the coldest, longest winters that any of us could remember. On those nights this winter when you knew you’d be hunkered down in a blizzard, it was strangely comforting to get an email with the subject line “Snowed In? Here’s 20% off.”
For example, take a look at Ann Taylor’s take on this kind of email:
Now, if I was basking in the sun in California, it probably wouldn’t have had the same ring to it.
5) Customer Reviews
Your store is somewhat of an online community. In every online community there are those leaders who want to produce content and there are those lurkers who prefer to consume the content. Product reviews are no different.
Get to know your customers and see who has responded to your requests for product reviews.
You may be annoying those who truly don’t care to provide a review by automatically requesting one after every purchase. You don’t want pushy email tactics to be the cause of a negative review.
The Net Promoter Score is a standard business metric for measuring customer satisfaction. It’s very common for eCommerce sites to offer this question to customers via a pop-up.
You probably already have this data. Now there is a way to act on it with your email marketing.
Consider segmenting the people with a low NPS and sending them to internal feedback channels, such as customer support. Feeling heard has a lot to do with customer happiness. Personal outreach from your customer happiness team or simply letting unhappy customers know where they can productively voice their opinions goes a long way.
For those with a high NPS, these are your potential evangelists. Encourage their relationship with your brand through new channels. They are a great group to invite to participate in user generated content campaigns, like Tiffany’s Love is Everywhere campaign. They are also an ideal cohort to target with requests for product reviews.
7) In-Store vs. Online vs. Mobile Purchases
Here’s another one for the “bricks and clicks” crowd.
Segment your list based on where your customers like to shop. In-store customers will likely be most receptive to invites to in-store events, while mobile site purchasers may appreciate being the first to know about the launch of your mobile app.
How to Segment Your List
Thinking through the strategy and developing a sense of your customer funnel takes a little time, but hopefully these post gave you a leg up. Implementing all of this and segmenting your lists isn’t technically all that difficult. Here’s how you do this in Klaviyo:
1. Login to your Klaviyo account and navigate over to your list section. Click “Create a dynamic list.”
3. Give your list a name. Let’s start with “Non-Buyers.”
4. Below that section, start to build your list based on events. For the purposes on this example, we’re going to simply segment buyers from non-buyers.
5. Now you should have a list of people who bought. Repeat Steps 1-4 for buyers.
6. The next step is to create an email campaign for non-buyers. With this campaign you can encourage them to check out an item they’ve viewed more than once in your store. Call in zip code and product viewed information to fill in the address and the product you will show in the newsletter creative.
7. Send to your list of non-buyers.
Okay, class. It’s been fun.
Now you’re ready to venture off into the world of segmented email marketing. To recap the key things you need to keep in mind:
- Remember that every email address is a potential customer.
- The goal of your email marketing should be to educate people down the funnel, and keep them coming back for more once they do.
- Send people relevant content based on where they are with their research. Help them research.