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What Is Audience Segmentation And Why Do You Need It?

In this article, we take a look at how audience segmentation works, why it is effective, and how to create your own segment. Additionally, we cover a few bulletproof segmentation strategies for your email list.

Understanding the nuts and bolts of email marketing can often be a challenging task. How do you know if you are sending the right email to the right person? How are you confident that your email will be opened, read and appreciated?

The simplest way to answer this would be to point to the obvious – Your email list.

That’s right, your list has the answer to these questions. While it may contain email addresses from people with similar interests, you often see that your emails hit a roadblock. It may be a lower engagement and less clicks… or more serious issues, like spam reporting or unsubscribes. 

Over time, email marketers have realized that two of the most important factors that cause such roadblocks are lack of personalization and non-targeted emails.

In order to improve in this area, you need to manipulate and split your email list into different subgroups, more commonly known as segments.

And in this article, we will explain everything you need to know about the process of audience segmentation. By the end of this post, you will understand what these segments are, how they work and why your business needs them.

What is audience segmentation

Audience segmentation, in the context of email marketing, refers to the process of splitting your main list into multiple smaller segments that contain email addresses that fit certain criteria.

You are probably wondering why such a thing might be important. So let me give you an example to make this clear:

Every list has active and inactive members. Those that love to read your emails and can’t wait to receive your next newsletter, and those who signed up for different reasons (perhaps a 10% discount code?). The latter stopped opening your emails a long time ago and you are wondering whether you should keep them on your list or not.

After some consideration, you decide to reach out to those inactive members and ask them if they are still interested in being part of your list. Such a campaign is known as a reactivation campaign and is a great practice for a clean and engaging email list.

So how do you know which subscribers you should target with this campaign? How can you create a small subgroup of all the members in your list that have not opened your emails in the last, say, 6 months?

This is exactly where segments come in. You can easily create a segment within your list, including email addresses that fit certain criteria (such as unopened emails for the last 6 months) and send them a more personalized email.

How does it work? – Segmentation criteria

Since this article is focused on email marketing, we will adjust our scope towards segmentation criteria (variables), instead of the general segmentation categories which are applicable to all marketing tools. 

Note: In case you want to get an idea of the different segmentation categories, feel free to read our segmentation guide.

Generally speaking, there are two types of criteria you’ll be working with. You can use them individually or in combination:

Subscriber based criteria

Subscriber based criteria include everything related to the subscriber, the way he discovered your list, the sign-up timeframe, etc. Segmentation criteria here include:

  • Demographics and Geolocation (such as the country your subscriber lives in or their gender) 
  • Preferred device used to read emails (mobile or desktop)
  • Opt-in method
  • Opt-in date (to target subscribers’ interaction with specific emails)
  • Date of signup (target users who subscribed during a specific timeframe)
  • Email address specifics (contents of an email address)

Activity based criteria

Activity based criteria include all the actions that subscribers take when coming across your emails. This type of segmentation criteria include:

  • Opened / Did not open an email
  • Clicked / Did not click through
  • Double opt-in / No double opt-in

Criteria based on a subscriber’s activity will help you determine the level of engagement and the importance of an email address within your list. This is the criteria you need to be looking at if, for example, you want to identify members that have not read your emails in the last 6 months.

We will explain how you can apply these criteria in the chapters below. For now, let’s explore what makes email segments so effective and how these can be worked out in even more detail.

Why is audience segmentation so effective?

Audience segmentation

Breaking your list down into smaller segments is a process that, over the long run, will be very beneficial for the growth of your business.

And that is because, when you reach out to your subscribers in a more personalized manner, your emails will act as a tool that builds a relationship between a (potential) customer and your brand.

Before I get you all excited, let me first address the skeptics that still doubt me. Let’s talk numbers here, since that’s the most important form of proof, right?

Open rates

In the context of email marketing, audience segmentation can drastically increase both your Open Rates and Click-through Rates (CTR). More specifically, according to MailChimp’s data, open rates increased by 14.31% while clicks were 100.95% higher than campaigns sent to non-segmented lists.

Unsubscribes

Users tend to unsubscribe more often when the emails they receive are not targeted and personalized to their needs. According to a recent study by Klaviyo, highly targeted email marketing campaigns (sent to specific segments) saw lower average unsubscribes.

Spam reports

In a study conducted by Litmus in 2017, it was found that the biggest reason for people marking their email as spam was, in fact, that the emails they received were irrelevant.

report spam

Now, what is interesting about this study is that it was focused on people that had previously signed up to the list they received emails from.

What that means, in short, is that the irrelevant emails were labeled as such, due to their non-targeted and non-personalised structure. Had they received emails that were focused on their needs and wishes, they would have remained loyal subscribers.

Engagement level

In most cases, email marketing is focused on increasing engagement with the brand and creating conversions. And most of us know that the two terms and interconnected. 

Low engagement means fewer sales.

On the contrary, a higher level of engagement leads to an increased number of sales.

As such, it is important to use every method available to increase engagement with potential customers. Thankfully, audience segmentation is the foundation upon which engagement is built.

The way you reach out to your subscribers to ask a question or share a story has a direct effect on whether they will take action. And as we saw above, studies have already observed a 100% increase in subscribers’ CTRs when approached in a targeted manner.

What does this all mean?

Clearly, it emphasizes the importance of learning how to split our list into segments. So keep reading, because we are going to break the process down into easy steps, to help you do it on your own.

Creating your own segment with Mailigen

Creating segments within your list on Mailigen is a pretty straightforward process that only requires you to follow a few steps and have a clear idea of the segmentation criteria that will define the list.

If you do not have a Mailigen account, you can easily sign-up for a 30-day free trial and import your email list to get started.

Step 1: Click on Lists and select Segments to open the Segment panel. 

segment

Step 2: On this tab, you will be able to see all your existing segments. Since we are creating a new segment, let’s click on Create New Segment.

segment

Step 3: Once you find yourself in this panel, there are several actions you can take to create your Segment.

audience segmentation
  • Start by giving a name to your Segment (1)
  • Choose one or multiple Lists which you want to use to create your segment (2). You can simply check the boxes of the lists you’d like to work on.
  • Another option is to create a segment based on Email Campaigns (3). Once again, you will be able to select your campaigns, simply by checking their boxes.

Step 4: In this example, we will create a Segment from an existing list. After choosing our list of preference we click on Continue (4).

Step 5: In order to create a segment, you need to filter your subscribers through a number of criteria that you will select. This is accomplished through the Segment Filter Window. There are two types of filters you can use and we already went through them above — Subscriber based criteria and Activity based criteria.

audience segmentation
  • Subscriber based filters (1), include field values such as Opt-in date, email address, date of signup etc.

    Here you have the option to add more than one condition to make the segment even more specific.

    If you do so, keep in mind that you can select whether subscribers fit ALL criteria (all conditions created) or ANY criteria (one or more conditions created).

    To give a quick example, if you are running a giveaway during the whole month of July and have people signing up to your list to participate, you can create a segment for all subscribers that sign-up to your list throughout the month of July.

    As there is a different motivation for those subscribers to sign-up, you can use this list to send a reactivation campaign or an offer later on.
  • Activity based filters (2) essentially stand for past actions a subscriber has taken, such as opening an email, clicking through or opting-in.

    Once again, as an example, if you send out an email with a call to action (CTA) that offers a discount code for a customer’s next purchase, you can create a segment of all users that opened the email but did not click through. You can then reach out and ask them why they did not use the discount code you provided.

Step 6: Once your conditions are set, click on Create and your segment will be created. You can now use it for your future campaigns.

Create a segment based on feedback from subscribers

If you want to create a more specific segment for which there are no segmentation options within your tool, you can ask your whole list for feedback, either by sending them a question of your own or by sending out a survey.

Here is what I mean by that. Imagine you have a clothing brand and you want to plan a marketing campaign that will offer a discount code to all redheads on your email list, for redhead day (5th of November).

Step 1: Ask your readers for feedback. Offer a questionnaire or simply ask them to reply to a simple question like “what is the color of your hair?”

Step 2: Go through the replies you receive and discover the redheads through their feedback. If you have a large email list, this process might take a lot of time.

Step 3: Create a new segment, choose your main list and find all the redheads that replied to your email.

And voila! You now know an alternative way of audience segmentation.

In case you don’t have time to wait for subscribers’ feedback or you currently have a very small mailing list, you can also build a landing page that will attract red-head readers.

Export your Segment

After your segment is created, you have the option of exporting it to a Microsoft Excel Spreadsheet.

Here is what you need to do to export your segment’s contents:

Step 1: Select the Segments option from the Lists Menu. This will display all of your current segments.

audience segmentation

Step 2: Click on the segment you just created.

new segment

Step 3: Click Export Segment Link. You will download the segmented list as a Microsoft Excel (xls) sheet.

segment

Bulletproof segmentation strategies for your list

Now that you have a better idea of what audience segmentation is, we will share will you 5 segmentation strategies that we and other businesses have used to improve their results. You can refer to them to get ideas or use them adjusted to your individual goals.

1. Audience segmentation based on geolocation

Geolocation is one of the subscriber based criteria (mentioned above) which you can use to create a detailed segment with users that reside in a certain geographic area. This strategy is very helpful for businesses where location has an influence over the purchasing decisions of their subscribers.

For example, Litmus applied geolocation filters to build targeted segments for their Email Design Conference, which took place in three different locations.

Each email included useful details for the specific location most relevant to their readers.

litmus-hotel-room

The campaigns that were sent to these segmented groups resulted in an impressive 46% increase in open rates, compared to general conference announcements.

You can also use geographic data for different email marketing campaigns:

  • Promoting regional offers – Send targeted emails for special offers in specific store locations.
  • Email timing based on specific time zones – Send your emails at the time that worldwide customers are most likely to read them
  • Customized directions – Send personalized emails that include directions to an event or store’s location based on the location of your reader.
  • Add personalization elements – Use a location tag in your subject line or body of your text to offer a more personalized experience to your subscribers
  • Special offers – If you run a business at multiple locations, you can send subscribers an offer that is only valid for the store they will most likely visit.

2. Audience segmentation based on funnel position

One of the best ways to create segments for your audience is by understanding where they are positioned in the sales funnel. 

A person who is positioned at the top of the funnel should get a completely different email compared to someone who is at the bottom, ready to buy your product.

For example, new subscribers that only recently discovered your brand should get emails that are more general, giving information about the niche you are serving and the range of products/services you offer. A great way to do this is by creating a Welcome email drip campaign for all new signups.

After these new subscribers have been part of your list for a while, they will have probably given you enough data to create more targetted emails by placing them in other segments. 

Another example is abandoned cart emails. Such behaviors indicate that a subscriber is at the bottom of the funnel; he/she is willing to complete a purchase but stopped abruptly during checkout.

In such instances, it might be a good idea to send follow-up emails in order to remind them about their incomplete order and listing the products they were ready to buy.

order follow-up

Grafomap does a great job reminding their customers about their order.

If you’d like to learn more about the sales funnel and how you can segment based on purchase behavior you should check out our post on behavioral segmentation.

3. Audience segmentation based on a specific timeframe

A great strategy that helps you segment your readers based on their sign-up motivation is to group them based on the timeframe they joined your list.

And here is where motivation comes in to play.

Imagine you own a travel blog and you are running a giveaway during the whole month of July. The big winner gets 2 tickets to Malibu with all expenses paid. Sounds like a dream right?

Well, it sounds the same for probably everyone who will sign up to your list during the month of July. As such, the educational value and inherent offer of your blog will not be the primary reason for which new sign-ups come rolling in, a dozen at a time.

Their motivation is to go to Malibu. They couldn’t care less about your blog post on “African wildlife survival tips”. After your giveaway is concluded, chances are that they will unsubscribe or even mark your emails as spam.

For that reason, and to prevent future problems with your list, it is best to create a separate segment including every person that joined your list during the month of July.

After the contest, you can send them a carefully structured email to ask them if they are still interested in what you have to offer them.

The people that ignore your email, will probably ignore all the following emails as well. This gives you the opportunity to remove them from your main list and keep only those that have made an effort to open and reply to your email.

A great example of such an email, which is also known as a re-engagement email, comes from Animoto:

audience re-engagement email

Conclusion

If you made it this far you now know how audience segmentation works and what the variables are that you can apply to make each segment unique.

Whether you are new to email marketing or you already have some experience, audience segmentation is an important process that you should start as early as possible. Doing so will allow you to grow a strong relationship with your readers and have them feel like you truly “get them”.

Here is what you need to remember regarding audience segmentation:

  • Audience segmentation is the process of creating smaller sub-groups within your main email list, based on certain segmentation criteria that you can manipulate according to your goals.
  • You can segment your list based on subscriber-based criteria and activity based criteria.
  • Targeted emails (which derive through segmentation) tend to perform better than emails sent to your whole list.

What Is Audience Segmentation And Why Do You Need It?
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