Email List Segmentation Tips for Ecommerce

Editor’s Note: This post was originally published on December 9, 2017, and was updated for accuracy and comprehensiveness on October 15, 2019.

Imagine it’s October and you live in Canada (that means snow, soon). You’re an avid online shopper and are ready to start your winter gear shopping, but you keep getting emails from XYZ Clothing for beachwear. You delete the emails without opening them until, one week, you get two emails. You finally open one just to click “unsubscribe”.

If only XYZ Clothing had been targeting their emails to specific customer segments. They’d realize winter was coming up in Canada and they’d send you more relevant content, like sales on boots and coats. With a little bit of targeting, they could’ve prevented you from unsubscribing to their list.

There’s no doubt that segmenting your email list makes for better email marketing campaigns, and we have more than an anecdote to prove it. Segmented campaigns received 14% higher opens and 2x more clicks than non-segmented campaigns - those are numbers worth paying attention to.

It makes sense. Your customers are going to engage positively when you send them relevant, targeted content.

So, do you want to increase opens and clicks by segmenting your email campaigns?

We'll assume that's a yes!

Good news, bad news: Segmentation possibilities are endless

The good new is, you likely already have customer data that will help you effectively segment your email campaigns. You might know their birthday, whether they’re from Miami or Mississippi, or what they've purchased in the past.

What may be harder to figure out is how to segment this information in a way that works for your brand.

If you’re using the right email platform, they may automatically build some actionable segments and make intelligent campaign suggestions for you. Either way, we’ve got some tips and tricks that will help you get started today.

Key categories for segmentation

There are a few ways to segment your customers, but most of them fall into one of four buckets: email engagement, behavior, demographics, and purchase history.

1. Engagement

Segmenting your subscribers based on their email engagement is a fundamental piece in a strong segmentation strategy. Subscriber engagement dictates how ISPs rate your sender reputation, and therefore your overall deliverability.

Thinking about segmentation by engagement level will help you clean your list, prune out unengaged and inactive subscribers, and make sure your emails land in inboxes. Engagement levels are also the jumping off point for some of the most powerful automations, like welcome and winback emails.

If you’ve ever sent an email campaign, you have plenty of valuable information on how your list engages with you. Some ESPs (like Hive) will automatically sort your contacts into dynamic engagement levels, so you don’t have to worry about manually managing your lists.

You can even adjust the variables to determine what an engaged subscriber looks like for your brand. Then, when it comes time to send an email, you can just select which of these segments you’d like to include.

Here are a few ways you might think about when segmenting emails by engagement:

  • Active subscribers

Send your core campaigns to active subscribers (e.g. subscribers who have engaged with any of your last five emails). They’ve continuously expressed an interest in hearing from you and are the most likely to open and click your emails.

  • New subscribers

Send new subscribers a welcome series, double opt-in confirmation, discount codes, or all of the above. They’ve recently opted in, so they want to hear from you! This is your chance to educate them about your brand, and it’s the best time to get them to engage and convert.

  • At-risk subscribers

When your subscribers haven’t opened an email recently, it’s likely they’ll need a reason to re-engage with your brand. Send at-risk subscribers a winback automation to help them re-engage (you might even sweeten the deal with a special offer).

  • Inactive subscribers

Build an intentional strategy to win back inactive subscribers (e.g. subscribers who haven’t opened the last 10 emails you’ve sent them) - they'll continue to ignore you if you send them more irrelevant email.

2. Behavior

You may know about your subscribers’ interests based on their website behavior, social media engagement, or preferences they’ve indicated on a signup form. When segmenting by behavior, you’re trying to get ahead of the question, “based on what this subscriber has done, what are they likely to do in the future?”

Website behavior is one of the most important indicators you can use to connect with your audience. By responding to how customers interact with your brand online, you can continue the conversation and send the right email at exactly the right time.

Segmenting by website behavior lets you trigger automations like browse or cart abandonment emails, retarget for items saved in a favorites list, or send specific emails based on topics your subscribers have engaged with online.

If you know more about your subscribers’ specific interests, you can send them more relevant emails, increasing the likelihood they’ll engage. For example, if a subscriber has indicated that they’re explicitly interested in hearing about women’s jeans and accessories, you can promote those specific items in more targeted campaigns.

Here are some behaviors you can specifically segment on:

  • Cart/browse abandonment

Nearly 70% of online shopping carts are abandoned, and 39% of browsers don’t even add items to their carts. Recover lost revenue but segmenting these contacts and sending targeted cart or browse abandonment campaigns.

  • Social media engagement

Fans of your brand’s social media are more likely to be engaged via email as well. If someone engages with a post about a specific product, you can re-market that product to them over email.

  • Browsing behavior

It's a no-brainer - if a customer is looking at sweaters on your website, you should be emailing them with sweater options after the fact.

3. Demographics

Tailoring content to specific demographics based on their location, gender, age, occupation, or salary is an effective way to get the right message in front of the right people. You can target these segments with details known to perform well with them, whether that’s specific items, events, or content.

You might market certain clothing to specific genders, or use language and visuals known to appeal to an age group. In the example earlier, location is used to market relevant clothing, or you might use it to tell subscribers about local pop-ups and in-store promotions.

Determining what demographics are most important to you will depend on the specifics of your brand, but the more information you gather about your subscribers, the more you can action your data through these segments.

4. Purchase history

Similar to segmenting based on behavior, you can use customers’ past purchases as the foundation to start a longer conversation.

With purchase history, you have an even clearer indicator for how different customers spend money, what they choose to buy, and when they choose to buy it. Segmenting subscribers based on products they’ve purchased or categories they buy from will let you easily retarget them.

Here are some ideas to get you started:

  • Buyer cycle

Your customers are on their own schedules, and it’s likely that they don’t line up with your marketing schedule. In the above hypothetical scenario, XYZ Clothing could’ve sent relevant content right before the snowy season. Figure out when your customers buy and tailor your emails to their schedule.

  • New customers

Create a segment for new buyers so you can send them an automated welcome, thank you, and discount for their next purchase. Acquiring new customers can cost anywhere from 5 to 25x more than retaining current customers. By encouraging first-time buyers to purchase again, you can build customer loyalty and make a big impact on your business.

  • Recent purchasers

Past purchases give you great insight into your customers - use them to upsell other relevant products to your customers by segmenting purchasers based on product type (seasonal items, accessories, outerwear, etc.)

  • Top purchasers

40% of an ecommerce store’s revenue is created by only 8% of its customers. Your top purchasers are already extremely engaged - why not continue to engage them? Offer rewards programs, coupons, or discounts to increase their lifetime value and create a positive net promoter effect.

Now how do I segment?

Now that you’ve got segmentation on the brain, you’re probably thinking about practical ways to implement. The best email strategies tie directly back to your company’s goals, and will reflect your current and prospective customers.

To get started:

1. Identify the segments that impact your business

It’s time to give some hard thought to your products and marketing strategy to decide what segments you should be tailoring your email marketing towards.

Step one is figuring out how your customers naturally group. You might have customers in Canada that love winter gear. Maybe half of your customers are students. Or your product is popular with new mothers. You’re likely familiar with these different personas already.

These groups are ultimately what you want to identify and add to segments based on their defining attributes (demographics, past behavior, purchasing history, and email engagement).

The next step is identifying whether you have the data you need to create these segments, or not.

2. Fill in your data gaps

The next step in building your segmentation strategy is identifying whether you actually have the information you need to create these segments. Take a look at the data you do have, and determine what you already know about each of your customers that can be turned into segments. At this point, it should be clear if you have the data to segment on your buyer personas or not.

If you don’t have the data you need, you may need to expand your email marketing database to hold more information, engineering ways to capture more data or explicitly asking customers for more information. There are a few steps you can take to get as much data as possible in your email marketing system:

Import all data into your CRM

Many businesses have a mix of data from a variety of sources - a mess of CSVs, newsletter signups, online accounts, buyers, contest entrants, and more.

Importing all of your data into an email marketing CRM is a great way to consolidate data, syncing all contacts, duplicate data, and purchase history, so you can get the full picture of who your buyers are and what they’re interested in.

Capture better data going forward

The tools you use to capture emails from your customers, like signup forms, allow you to determine what other data you'd like to collect. You may want to collect information like names, birthdays, location, social handles, or product preference to segment on in the future. What data you collect will depend on the segments you would like to build.

3. Create your segments and campaigns

Use your email marketing platforms’ segmentation features to section out customers that you want to engage as discussed above. Based on the segments you choose, craft specific messaging that will engage those customers depending on their demographics or behaviors.

4. Send, check results, iterate, repeat

You’ve done it, you’re ready to deploy your segmented campaign! You’re on your way to learning more about your audience, and increasing engagement and sales.

Test out a few different segmentation ideas, and then check your results across campaigns - your new, segmented campaigns and also campaigns you sent in the past to your whole list.

When you look at the results of your campaigns, decide what strategies you should keep and what needs to go. Which segments had the highest opens? The highest clicks?

You can also consider the different variables that can affect engagement like subject lines and the content of the email (mainly pictures? mostly text?). Take a deeper look into each of these attributes to figure out what’s really making your emails successful, and do more of it.

There’s a ton of opportunity here to continuously test and iterate - people and their preferences are always changing, so you should always be revisiting the way you market to them.

Get segmenting!

Thinking about all the ways you can slice and dice your list with segments can be overwhelming, but all you have to do is keep your eye on the prize. Remember that segmented emails have way higher engagement rates , and more importantly, significantly higher click-through rates. Getting smart about how you segment is a great way to increase email marketing ROI, so get started!

Want a deeper dive into the world of segmentation? From actioning to maintaining segments and everything in between, the 2019 Ultimate Guide to Segmentation has everything you need to design a powerful segmentation strategy. (Plus, an actionable checklist to keep you on track!). Check it out 👉🏼

Hive's Ultimate Guide to Email Segmentation