Audience segmentation is one of the most effective ways for you to increase your ecommerce store’s sales if you have the know-how to incorporate it into your marketing strategy.
Segmented email campaigns have the potential to increase revenue up to 760% compared to campaigns that aren’t segmented.
Email has been shown to have a higher ROI than other digital marketing tactics, including paid or organic social media.
So, why are some ecommerce store owners questioning if email is the way of the past? Because they’re using it like it’s still 2002.
The secret to generating sales through email is segmentation.
Your customer base expects personalized messaging and marketing efforts.
If you’re sending the same email to your entire list because you don’t understand the power of audience segmentation, or just don’t know where to start, keep reading.
Getting Started With Customer Segmentation
When developing an audience segmentation strategy, you first have to choose an email service provider (ESP) that has the capability to collect data and build segments, if you haven't done that already.
Your ESP needs to integrate with your store to collect customer data, maintain a strong sender reputation, and ideally, have robust automation features that will help save you time once you have your strategy nailed down.
Before you dive into segmenting your list though, make sure you know email best practices to follow to round out your email marketing strategy.
Ecommerce Email Service Providers
There are lots of email marketing platforms available to fit any goal and/or budget. Below are a few that email marketers often recommend.
You’ll also want to understand how your email service provider organizes your subscribers.
Some of the providers are list-based and some are tag-based. Be aware that if your ESP is list-based, one subscriber signed up to three lists is going to be charged as three users, for example.
Finally, go in and practice building test segments for your target market to learn how to manipulate the data.
It can get confusing, and different ESPs have different setups, so it’s important that you fully understand how to use your provider’s logic before sending your first segmented campaign.
Another thing you need before developing a segmentation strategy is a firm understanding of your key metrics. Without this, you won’t be able to measure how effective your campaigns are.
Types Of Market Segmentation
With all the data and AI available today there is an infinite number of ways to use email segmentation.
You can segment your audience through:
- Demographic data
- Psychographic data
- Behavioral data
We’ll walk through these audience segmentation examples and cover each type of market segment to get a better idea of what the best email marketing strategy is for you.
Once you learn how to set it up, you can start testing different segmentation combinations.
For instance, you can set up an email campaign that is only sent to 45 to 60-year-olds living in Chicago that have visited your website in the past 30 days ahead of a major snowstorm.
Your customers will love you for it.
If you’ve never used email segmentation, segmenting your email by demographic data is one of the most straightforward ways to get started.
If your ecommerce store has a large catalog, it’s vital that you collect demographic information when they sign up so you send them what they’re interested in from the beginning.
You can try to collect it later through a survey or make a best guess based on behaviors, but it takes longer and isn’t as reliable.
A twenty-something first-time homebuyer has very different needs than a three-time grandma who is looking to buy serveware for hosting family. If you operate a home goods store though, both are lucrative customers to have.
You’ll want to consider major life events your customers may be experiencing and how they relate to your products.
Segmenting your email campaigns by age will allow you to develop marketing messages and offers that speak directly to each demographic.
While many things aren’t gender-specific, this segmentation can be helpful for items where sizing matters.
Footwear, for instance, would be an industry that benefits from knowing if a potential customer is looking at men’s or women’s shoes.
If you have an overstock of men’s size 10 and up hiking boots, and you're running a promotion for them, you don’t need to send that email to customers looking for women’s footwear.
Relationships are often an overlooked demographic segment that could generate additional revenue for your store, especially around traditional gifting times.
You’ve probably heard that women are responsible for as high as 80% of purchasing decisions.
Even if your target audience is men, I bet you have female subscribers that have bought a gift or are considering buying one for a man in her life. Don’t discount testing an email segment that is marketed to them.
Take a look at the below email from Bowhunters Superstore as an example. I don’t fit in their target market, but they have created a segment of their list that includes gift buyers.
Geographic segmentation is another easy way to segment your target audience when it comes to email marketing.
For stores that sell location-dependent goods, like surfboards or snow skis, segmenting by geography will be a must for you.
There are two ways your email service provider might collect geographic data about your audience.
The first is through collecting billing addresses after customers make a purchase and the second is through collecting customer IP addresses, which can be identified when they complete a sign-up form or open an email.
4. Seasonal patterns
Some regions have all seasons while others have more moderate climates with less change between seasons. If you have international customers, this becomes even more important.
Many seasonal products branch out to other parts of the world to create sales for their product year-round.
Through geographic segmentation, you can focus on the subscribers that your product is most useful to at that moment.
This email from Wayfair landed in my inbox about a month ago. It’s November in the Midwest, I’m not thinking about lawn games.
It’s going to make me less likely to open future communications because they didn’t personalize and make it relevant to the consumer.
5. Local activities and events
Hosting a pop-up? Using experiential marketing? Selling tie-dye shirts and there is a major music festival coming up in a customer's area?
Using a subscriber’s location opens up another level of connection.
This might take a little bit of research on your part, but if you sell a niche product, it could have a high ROI.
In normal years, holiday events would be in full swing across North America, and Value Village has probably used similar campaigns in the past to take advantage of that.
Too bad they forgot to change their angle this year, though, and missed the mark.
6. Optimized for timezone
The time an email hits your audience’s inbox matters.
There has been a ton of research on optimizing the timing of email, but it’s something you’re going to want to test with your audience as it varies.
Once you know that the best time is Saturday at 9:00 p.m for your specific list, you can segment by timezone so that each subscriber gets your email when it’s most likely to get results.
Segmenting by psychographic data is a more advanced marketing tactic. The information is harder to obtain, but it’s worth the effort.
You can gather psychographic data through surveys or feedback requests. You could also look for patterns that tell a story and test your theory until you see the return you’re looking for.
Segmenting your subscribers by psychographic data is important when you are building a brand.
It helps you develop messaging and form a relationship with your current and potential customers.
7. Personality traits
There’s been a huge surge in people purchasing clothing and personal items depicting their personality.
If you sell personality-driven items, narrowing down on what appeals to different segments has the potential to improve your revenue dramatically.
For instance, if you sell animal print socks, you’re going to benefit from knowing if your subscriber is a dog or a cat person
8. Values, attitudes, and motivations
Possibly the most advantageous way to use psychographic segmentation is by testing what motivates your target audience to take the next step.
Are they driven by data or emotion?
A portion of your subscribers will be bargain shoppers that never buy without a sale while another portion is there for your mission and is going to be motivated to make a purchase when you remind them of your shared values.
If you are only sending sales emails, it’s time to go deeper by sharing your story or providing product education to the subscribers on your list who aren’t converting on sales offers alone.
Carter’s target audience is parents of young children. They send a lot of sales emails, but on occasion, they’d test sending out a content-based email.
This email in particular was a homerun at identifying a motivation. If you’ve ever potty-trained a toddler, you know that tricks that could help you get through the process are going to catch your attention.
Whether you sell cosmetics or home security systems, you’ll get more sales if you understand the lifestyle variances of your audience.
You could break your audience into an ideal customer segment that includes leads that fit into the lifestyle your current marketing speaks to, and an available customer segment that you plan to expand your marketing to.
Take smart home devices as an example. At first, the marketing focused on tech-aware customers that would be early adopters, but they have since moved their marketing to more typical homeowners to reach a larger audience.
Behavioral segmentation is one of the quickest ways to generate more revenue with your email marketing, which makes it a favorite among ecommerce store owners.
By using data on engagement, you can implement email campaigns that help push your potential and current customers to the next step.
You’ll be able to focus your email marketing efforts on the audience that is closest to making a purchase instead of using the spray-and-pray method and wondering why your emails aren’t getting opens or click-throughs.
10. Email engagement behaviors
A customer opening your emails and clicking through to your website is a good indication of interest in your products.
People aren’t taking the time to read your emails if they have no desire to buy.
The beauty of behavioral segmentation is that you can then send these email subscribers additional information to keep them engaging, and hopefully buying.
Another perk of having a segment of your most engaged subscribers is that it builds your sender reputation. Every time you communicate with them and they open, click a link or reply, it tells their email provider that what you send is important and should go to the inbox, not spam.
Don’t neglect your engaged email subscribers even if they aren’t your highest purchasers.
11. Purchasing behaviors
Someone who has never purchased, someone who purchased once four months ago, and someone who has purchased five times in the last year all have a different value to your store, but if you are sending them the same campaign then you aren’t treating them as if they do.
A person who has never purchased may need more nurturing whereas someone who is a repeat customer may just need the right offer to hit their inbox.
Segmenting by purchasing behavior allows you to meet your customers where they are and walk them through the buying process.
You can also segment by subscribers who have spent a certain amount of money with your store to target and reward your most valuable customers.
12. Website behaviors
You can also target people by which pages they visit (tells you what they are interested in), how often they visit (tells you how interested they are), and when the last time they visited was (tells you how urgent that interest might be).
For example, you’re having a flash sale on luggage sets, you can segment the customers that have been on your site since the sale has started and who looked at a certain luggage set page.
You may decide to send that segment an additional incentive to act now, and they are primed to take that offer because you are personalizing it to their interest.
Vistaprint did just that with the above email. They have a wide array of products and do a good job of segmenting their audience based on what they’ve engaged with on their website.
Next Steps for Creating Your Email Marketing Campaigns
To get the best results from audience segmentation, you need to consider your goals and use multiple audience properties to create the email segments that fit your subscribers’ needs.
Once you identify the customer segments that perform well, and that you want to continue to use, you can create a buyer persona for those subscribers and automatically add future subscribers to the segment.
You can continue to create new buyer personas to improve your user experience and increase revenue as you scale.
Keep in mind the larger your audience, the more audience segments you will need to develop to keep your email marketing personalized to its receiver.
Email marketing requires regular monitoring and testing, but given it’s ROI, it’s worth the effort. Find out what's trending in what consumers are looking for from businesses they patronize in this article.
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