How Email Segmentation Could Boost Your Retention

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How smart is your email strategy for your digital business?

As we’ve said before, getting people on your list is one thing, but it’s even more important what you do with them next.

Whether you’re a SaaS, an ecommerce business, or a seller of digital products and services, one thing every business wants is to successfully retain customers. After all, it tends to be cheaper and more cost effective to keep your current customers than to find new ones.

Email marketing works. In fact, the graph from Neil Patel below shows it far outdoing other methods in terms of ROI…

email-marketing-works

… but the key is that you have to have good strategy behind it to see results.

Email segmentation is important if you want to smart about your business email strategy. It’s also a good way to boost your chances of retaining those customers…

Why Are “Blanket” Emails A Bad Idea?

You hear the word “relevance” discussed regularly when it comes to any form of marketing. We want to publish “relevant” content, present “relevant” offers and target the right audience with those things.

Email is no different. If I purchase makeup from your online store, how likely is it that I’ll also be interested in men’s socks? Yet many online sellers work off the basis of blanket emailing everything they have to say to every person on their list.

By my second or third men’s sock sale email, I’ve been trained to believe that your emails are not relevant to me and I’ve stopped opening them. If I don’t open any of your emails, you may start to slip from my mind as being a business relevant to my needs, then how likely will I be to come back and shop again?

What emails should you send out for retention? Grab our free guide here.

Why Segmentation Works

We’ve covered segmentation previously so we won’t labor over the point, but in a nutshell, segmentation works because it allows you to be more targeted with your messaging so that relevant messages are put in front of the right people.

These statistics from Mailchimp show how segmented email campaigns do better than those which aren’t:

Mailchimp-segmentation-results

As Neil Patel puts it, email segmentation helps you to find untapped potential in your list and take advantage of it.

segmentation-potential

 

Source: Neil Patel

Avoid Spam Folders

The whole purpose of email marketing gets defeated if your emails end up on a quick trip to the spam folder. One way to avoid this is to do your best to get good open and action rates on your emails.

Email service providers note whether or not your emails are getting opened, links are getting clicked, or actions such as replying or flagging as important are taken. If you’re sending irrelevant, blanket emails which are ignored or deleted, expect to end up in spam boxes and have your task of retaining customers made even more difficult.

How To Segment

A major benefit of segmenting is that it allows you to respond appropriately to customer behavior and serve up relevant information to them. Previously, we looked at some basic tagging in Infusionsoft to help you create segments, but let’s look at a few slightly more advanced segmentation ideas:

Demographics

This is a basic way to create a segment, but look at what you can do with it. Simply knowing age, gender or job role can allow you to adjust your messaging for maximum engagement, even if it is essentially the same thing you are promoting.

Email Marketing On Acid provide a great example of this from Fit For Me.The message is exactly the same as they are sharing the same promotion, but the image on the left could be sent out to younger subscribers, while the one on the right is sent out to an older age group. This way they have elements that any of their subscribers can relate to.

email-demographic

Product Category Preferences

How does a 7000% increase in email marketing revenue sound? In this example from EmailMonday, Totes Isotoner Group noticed that many shoppers were only visiting a single product category: umbrellas, gloves, or boots.

When they segmented those consumers and sent targeted email offers based on that category, they saw more browsers becoming buyers and achieved that impressive 7000% statistic. See how relevance works? The company will also be more likely to keep those customers because they understand their preferences.

Your Best Customers

However you define “best customers”, creating a segment for them is a good idea. This way you can not only send them special offers, but encourage them to engage with your business.

For example, you may want to survey them and get their input on new products they’d like or any ideas they’d like to see implemented. You could also use this segment as a means to encourage referrals of new business, perhaps rewarding them for doing so.

The idea is that you want to keep nurturing those top customers. Make them feel special and you will be more likely to hang on to them.

Abandoned Tasks

This is a good one for any SaaS out there. Churn is always of high concern, so you want to make a move early to prevent it. Say your client abandons a task part way through in your software, it could be because they were busy with something else and decided to leave, but it could also be because they got confused or something went wrong.

If you can set up a system so that the abandoned task triggers a tag rule, you can send an email seeking to find out why they abandoned the task. You then have an opportunity to help the customer succeed and potentially intervene before they leave.

Survey Results

If you’re starting close to scratch and need a way to quickly understand what customer preferences are, surveys or quizzes can be a great way to do it. In fact, as Marketo shows, the evidence is in that people love taking quizzes.

For maximum effectiveness, you need to be quite thoughtful with the questions that you ask, so that you can generate useful results of preferences, ability or personality. You can then segment your customers based on the answers they gave you.

Look at Tru&Co for a perfect example. The online lingerie retailers offer a 10% discount to those who complete their quiz and use it as a means to recommend products which will suit the preferences of the customer. This is also a great way for them to send targeted email offers which make sense to the customer.

tru-and-co

Geographic Location

It goes without saying that sometimes an offer may be better suited to those in a certain geographic location more than others, but Email On Acid demonstrates how you could take this a step further…

If you know where someone is located, what else do you know about them? That’s right, you can understand the kinds of weather patterns they deal with and make offers accordingly (especially if you are an ecommerce seller).

Skymosity is a company set up to track weather patterns and help you to segment customers accordingly. To share the example given by Email On Acid, athletic company Brooks used this data to create multiple campaigns based upon weather conditions and temperature range. This is a powerful way to remain relevant!

brooks_weather_segmentation

What emails should you send out for retention? Grab our free guide here.

Final Thoughts

How does email segmentation boost retention? Simply by allowing you to remain relevant in the eyes of the customer, keeping you on their minds and ensuring that your emails get opened.

Segmentation is a powerful way to encourage engagement, promote repeat business and therefore retention of your customers.

There are literally dozens of different ways you can segment your audience, but look to try some more advanced methods if you really want to increase your chances of keeping the customer.
If you can deliver high customer value and increased email engagement, then your retention figures should look good.