What is Segmentation and How Do You Make it Work? May 11, 2018, | Posted by Erin

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One of the most powerful tools in the email marketer’s toolkit is list segmentation; it allows marketers to target specific groups of people within a list with a message tailored to their interest and engagement. But many brands don’t understand how list segmentation works, how it benefits marketing efforts, or how to put the simple strategy of separating groups within an email list to the best possible use to get the benefits it can confer. We at Site Impact have been in the industry for years now; we’ve explained before how “blasts”--emails sent out to an entire list, with a broad focus--are quickly becoming a thing of the past. Today we’re going to explain how segmentation works and why it’s a vital tool for any brand or email marketer.

The most basic definition for email segmentation is the division of email subscribers into smaller segments based on set criteria. A marketer creates segments within an email list to cater specifically to each different sub-list and that list’s demographic. These segmentations can be made based on a wide variety of categories: geographic location, age group, income level, interests, purchase history, and so on. At heart, the premise is very simple indeed: targeting smaller groups with offers and language that are more in keeping with their general interests is more likely to get a response than sending out a message to everyone. According to DMA, marketers using a segmented approach have seen up to a 760% increase in revenue from their campaigns--that is not just significant, but impossible to ignore.

The particular segmentations that are relevant for a brand are, of course, going to vary; for some industries and brands, generation/age is not as big of a distinguishing factor as geographical area or interests. Even trickier is the fact that the lines of segmentation may vary from one campaign to another: some campaigns may need to be segmented based on purchase history, while others may do better to use segmentation based on income level. It’s a good idea for any brand or email marketing professional to have multiple segmentations for any given email list, pre-prepared, so that when it comes time to develop a campaign the hard part is already done. By having multiple segments that you can call upon and separate out from the whole of the list, you can also save time when it comes to developing new campaigns. 

Making segmented lists work to their peak efficiency is a matter of understanding how those segmentations work and catering to those strengths. For example, by segmenting along interests, a brand can deploy campaigns that match interests to specific products. By segmenting based on income level, brands can target customers for an offer that is more suited to what they’re specifically looking for--and what they’re willing to spend. Instead of trying to make one large campaign that appeals to everyone on a list, marketers can approach the smaller subset of people who might be interested in a specific value proposition with a higher rate of success--which means that overall, the campaigns will generate higher revenue.

This powerful tool in email marketing is something that can take a lot of trial and error to master, however; it is just as bad to make a bad judgment in targeting to a list segment as it is to make a broad offer to try and appeal to everyone and miss the mark with a substantial chunk of the list. Contact Site Impact to hear how we use list segmentation to improve the email outreach efforts of every client we work with.