The Power of Segmentation and Targeting for Effective Ecommerce Marketing

One of the most appealing characteristics of email marketing has always been its scalability. You can broadcast your message in a single email with the click of a send button, no matter how large your subscriber list grows. But this charm has also been a curse, with disengaged customers finding the email contents too general to interest them, resulting in lower open and click-through rates. That’s why digital marketing experts unanimously agree that segmentation and targeting are critical for successful marketing campaigns.

Segmentation and targeting is your key to create content that is timely, relevant and helpful for each of your ideal customer profiles or personas—the sort of content that shows them you really understand their motivations and challenges, and is therefore significantly more likely to result in a sale. How much more likely?

• Personalising a marketing email results in a 55% increase in open rates.
• 28% of businesses reported lower unsubscribe rates with email segmentation.
• 24% of businesses increased sales following list segmentation.
• 58% of all revenue is generated by segmented, targeted emails.

In this blog post, I’ll focus on how you can tailor your message with email segmentation, but you can (and should!) apply the same principles to your social media marketing and offline campaigns, tailoring your message to suit the dominant audience on each platform.

How to Set Up Your Email Segmentation

If you’re using one of the leading email marketing platforms, you’ve probably already seen (and maybe even used) the inbuilt automatic segmentation options. These segments are usually built upon the browsing history and email response activity of the subscriber, and may make an educated guess as to each subscriber’s geographic location, gender or sales funnel stage.

You can also add options at signup, so customers can add themselves to specific interest lists or choose email preferences. Or create your own custom groups based on external data, such as a list of prospects who personally handed you their business cards at a function or event, or the highest value customers who are the biggest spenders in your ecommerce store.

However you choose to segment your list, it needs to make sense in terms of your ideal customer profiles and the specific problem you’re trying to solve for each of them. Then, when you send your campaigns, you’ll be able to customise your messaging and call to action for each group. But don’t let that scare you off creating several different market segments, because you’ll be automating many of your messages, and you’ll find you can reuse a fair bit of your content between different groups.

How to Segment Your Email List

There are very few constraints on how you implement segmentation, so it’s a matter of looking at your options and choosing what you think you will work best for your subscriber base. As with any marketing activity, it’s a matter of testing your campaign performance and tweaking it to see what you can do better. We’ll focus on the more common options that should be easy to implement based on information you already have about your subscribers.

Stage of Sales Funnel or Customer Journey

Your subscribers are looking for different information at different stages of your relationship, and segmenting your list lets you provide what they need:

• When they first encounter your brand, they want to learn about what you can offer.
• When they’ve added objects to their shopping cart but not completed the purchase, they want to be reassured that they’re selecting the right product and the right store.
• When they’ve made one purchase, they want to know how to get the most out of their purchase, and they are open to hearing about other products they may like.
• When they’ve placed several orders with you, they want to know what’s new and interesting in your store, where you’re headed, and what’s in it for them.

Product Lines of Interest

By tracking the items your store visitors are viewing, adding to their shopping cart, or purchasing, you can make educated guesses about other products they may like, special deals they’ll respond to, and article topics that may interest them. For example, if you run an online pet shop, you can segment your list by the type of pet they own, so you’re not sending cat food specials to dog owners.

Geographical Location and Demographic

Segmenting by location lets you build targeted communications around local events and news, regional holidays, and even weather changes. It can also help you make educated guesses about your subscriber’s lifestyle, income, mode of transport, etc., but segments created on this information are often less useful than ones based on customer behaviour. The same goes for segmenting by demographic—it’s usually a shorthand way to describe your subscribers’ interests, and the longhand approach is usually more effective.

Level of Engagement

Past behaviour is one of the most powerful predictors of future behaviour, so what you already know about a subscriber’s response will help you determine what they’re likely to respond to in future:

• Send additional interesting content to customers who have read your blog posts or downloaded your free ebook.
• If you’re running a survey, send it to the customers who have previously responded to calls for feedback in transactional emails.
• Tweak the frequency of messaging to subscribers who open and click-through every email you send, so they spend more time on your site.
• Create rescue campaigns, offering a special deal to entice less engaged subscribers to open your email and click through to your ecommerce store.
• Brand advocates

Create a segment for customers who provide positive word-of-mouth about your brand, and use it to reward them for their loyalty. These are the people who are most likely to share your messaging with their friends and contacts, so give them something worth sharing, like exclusive content or deals that are available only to new customers.

So, if you want to maximise your return on email marketing, start leveraging features in your automated marketing software and the information you already have about your subscribers to segment your list and create truly targeted email campaigns for your ideal customers.

Neto is a leading ecommerce platform designed to help your business grow across multiple channels. With inbuilt analytics, mobile-responsive themes, fully flexible navigation, customisable shopping carts, and a wide range of add-on integrations to digital marketing platforms, and inbuilt analytics to help you track your campaign success. We’ve also got ideas about how you can identify and connect with your ideal customers to reap the rewards of segmentation and targeting.