Why List Segmentation Matters in Email Marketing

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You may think you know your email list pretty well, but if you haven’t used data to enrich your customer insights, you’re just looking at the tip of the iceberg. One great data-driven way to maximize your marketing efforts and boost ROI is list segmentation. Hubspot found that email marketers who segmented their lists had markedly higher click-through rates than those who did not:

There are No One-Size-Fits-All Customers

Chances are good that within your list, you have multiple buyer personas. And even within these personas, individual buyers are at various points in the sales cycle at any given time. Blasting the same message to all these buyers is a little like asking them all to wear the same size shirt. The message (and the shirt) just won’t fit.

The truth is customers won’t engage with a message that doesn’t speak to them. They want relevance. Seriously. In a recent HubSpot survey, more than one-third of respondents specifically referenced the word “relevance” when asked why they chose to subscribe to emails from some companies.

So how can an email marketer deliver this relevance? It’s time to segment your list and send messages that speak to each individual buyer. When you do, you won’t just be pleasing your customers; you’ll be boosting your business.

Personalization Drives Revenue

With segmentation, better customer engagement means better conversion rates. Jupiter Researchhas found relevant emails drive 18 times more revenue than broadcast emails.

But that’s not to say personalization is always easy. The simplicity of batch-and-blast email campaigns can be deceptively attractive.

Devin Kimura, CEO at Artbeads.com, speaks of his company becoming “addicted” to the quick revenue batch-and-blast brings. “When you have to pay those bills, you run a big batch-and-blast promotion with a site-wide coupon that can bring a lot of money in the door. Then you have to replenish that inventory you just sold, so you have to run another discount campaign. Then your customers start to get hooked on the discounts coming…It’s a very damaging cycle,” Kimura says.

To avoid this, Artbeads.com decided to test a different strategy: focus on a few select customers with the potential to bring in significant incremental revenue. Kimura and his team isolated current email subscribers who’d made only one large purchase in the last 18 months. The company then sent these customers a personal message directly from Kimura thanking them for their purchase along with a single call-to-action (a 20 percent off coupon and a link to Artbeads.com). The email made it clear that this was a special offer available only to a handful of valued clients.

As the results started to come in, the team couldn’t believe the response:

  • Open rate: 20.25%
  • Click-through rate: 4.36%
  • Conversion rate (defined as “purchase”): 0.71%

The team was particularly excited with this last stat. Typical batch-and-blast emails would net conversion rates of just 0.04 to 0.23%. The targeted campaign represented an astonishing 208% increase over the company’s usual results.

Once you start segmenting, batch-and-blast doesn’t seem so addictive. “It’s very easy to demonstrate ROI on a program like that,” Kimura says. “It just opened my eyes to the different possibilities with what we are doing.”

Segmentation Can Improve Your Sender Reputation

The benefits don’t stop with short-term revenue. Segmentation can also drive an important, long-term asset: sender reputation.

Subscriber complaint rates are a major factor in harming your reputation. As we explained in this blog post, one of the best ways to reduce your complaint rate is to ensure everyone on your listwants to receive your emails.

According to the Lyris Annual Email Optimizer Report, marketers who segment their email lists experience 28 percent lower unsubscribe rates, 24 percent better deliverability and 15 percent fewer spam complaints, which all lead to better sender reputation.

As Pamela Vaughan explains in a recent HubSpot post, if you consistently segment your list and send the right messages to the right people at the right times, your subscribers will “start to realize that every time they get an email from you, they know the content will be interesting to them–because it always has been. In other words, you’ll reap the benefits of a great sender reputation among your audience.”

Ultimately, data combined with segmentation lets email marketers send customers truly relevant messages—and that means better results for everyone involved.

Article From: towerdata.com

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