In the dynamic realm of Direct-to-Consumer (DTC) e-commerce, email marketing emerges as a potent tool, and segmentation is its secret weapon. “Tailoring your messaging to specific customer segments ensures personalized, relevant content that resonates, driving engagement, conversions, and ultimately, fostering a lasting connection with your audience. Dive into our latest blog to unlock the transformative power of segmentation and elevate your DTC store’s email marketing strategy to new heights.”
Email Segmentation in an era of a constant clutter and communication across media devices, channels and platforms is likely an antidote to chaotic communication.
This article delves into the importance of email segmentation and how it can help your store drive more engagement, efficiency and results in terms of a better contribution margin or profitability.
The old practice of batch and blast sends to your entire email subscriber list comes with more penalties than benefits and hence most successful DTC brands recognize that personalized communication to clearly identified personas or segments based on online behavior (purchase history, website browse behavior), psychographics (interests, values, lifestyle) and demographics (age, gender, location).
Learn more on why the best email platform wins for DTC everytime here.
The goal of email segmentation is to develop audience-led content.
What are the advantages of email segmentation?
i. Increased email deliverability
ii. Reduced unsubscribe rates
iii. Increased engagement rates – open rates and click rates
iv. Increased conversion rates
v. Improved brand health reports
How do you build a data driven email segmentation strategy?
The ability to collect zero- and first-party customer data – information sourced directly through someone’s online behavior that they’ve consented to share. Leveraging an ESP or better still a CDP like Klaviyo – housing data collection and activation tools under one roof is also imperative.
Once you have such a platform in place, here’s how to start using it to build out your email segmentation strategy:
i. Collect subscriber and customer data
Without data, you have no segments. Here, are some examples of targeting behavioral data:
a. Past purchase history or frequency: segment one-time customers from highly active ones.
b. Website visit activity: Delineate frequent visitors from people new to your website.
c. Email engagement frequency: Track email clicks as an indicator of readiness to purchase.
d. Customer Reviews: Group customers willing to leave reviews.
e. Customer lifetime value (CLTV): Separate customers who spend the most – which may not be the same as purchase history. You could segment your CLTV by the below attributes:
– By Acquisition source: Track where customers are coming from to land on your website.
– Last viewed products: Separate last viewed products by website visitors also segregate by product vertical
– Abandoned cart value: Separate high-value carts from lower ones
ii. Identity quantitative and qualitative criteria before implementing segments!
It is important to define your segments basis meaningful attributes. As you gather data, you’ll start to notice patterns, which will add context when you’re answering questions like:
– Identify attributes that define a high-value customer vs. a lower-value customer?
– How many times does a customer need to buy to be considered loyal?
– What is the price discrepancy between a high-value abandoned cart vs. a low one?
Paw.com, for example, segments their email list based on qualitative factors like pet breed, age, size, and even quirks like anxiety during fireworks. The brand attributes 30% of its YOY growth to emails, assisted by Klaviyo’s email segmentation tools.
iii. Scaling Segmentation for your email marketing initiatives
Once you have gathered substantial subscribers and have begun to segment them basis specific meaningful criteria – you will want to scale your segments manually. As your list grows, you won’t want to create segments manually. This is where technology can step in, allowing you to set the criteria that determines when people join a segment.
Klaviyo’s segmentation features, are dynamic, meaning they grow as subscribers meet specific criteria or are removed and shrink in size when the specific criteria defined is not met.
Optimize segments based on email performance: begin to optimize your segments based on the below criteria of metrics:
-Click rate
-Conversion rate
-Revenue per recipient
-Deliverability rate
-Unsubscribe rate
Learn the role of email marketing in driving customer loyalty and retention here.
Leveraging Email Segmentation to Sell More: 7 Ideas
1. First time visitors: new visitors need to be nurtured and ultimately won over in order they are convinced to give your product or service a try. This is only possible by launching a series of storytelling emails, testimonials and UGC centric review emails. One could also provide product samples to launch trials and provide an introductory discount to your best sellers.
2. Past Purchasers: Your customers past purchase behavior includes what they bought, how much they spent, and the frequency of their purchase. You can divide past purchasers into 3 categories:
a. Customers who have made at least one purchase: If they signed up from a promotional offer, they may be interested in discounts. If they signed up for a newsletter before buying, they may be more interested in educational or brand content. Segment this group.
b. Highly active customers: Offer perks like exclusive sales, free shipping offers, and early access to new products.
3. Customer Review Centric Emails: segment customers with both positive 4-5-star reviews, those with between 2-3 star reviews and those with negative reviews. Launch surveys leveraging negative reviews and request feedback to drive innovation and plug gaps in the customer journey. With positive reviews, launch surveys further to explore new product extensions and categories your most loyal customers might be interested in – then launch them into a subscription or loyalty program.
Warm up to your customers who send a positive review by sending a note of appreciation, with an offer if they’ve left multiple positive reviews. On the other hand, you can also send apologetic messages to people who left negative reviews with how you look to resolve the issue permanently or provide for alternative solutions.
4. Segmenting customers based on CLTV: Also known as CLTV, customer lifetime value is how much a customer has spent with your brand thus far. (Note that with Klaviyo, you may also segment based on a future revenue estimate called predicted CLTV, which makes reasonable predictions on customer behavior using previous patterns. Try segmenting your customers into the following categories based on CLTV:
–VIP (all-time high CLTV): early access to new products
–Big spenders: exclusive product drops just for them
–Frequent purchasers: early access to sales
–Unengaged VIPs: deeper discounts on sales
This type of campaign could work well for frequent purchasers you’d like to re-engage with by offering unique product drops, limited time discounts or bundled offers based on the segments AOV.
5. By Channel Source of Acquisition: where you acquired your customers from matters in future communication and flows that you would launch for every specific segment.
For example, customers who subscribe to your list through a referral might trust you more as a brand, since you were recommended by someone they know. You may want to send this segment more pointed messages to purchase, as they might be more ready to buy than someone who subscribed to your list via a link on social media.
6. Products Last Viewed : By segmenting last viewed products for your browse abandonment email flow – one can automatically connect to website or online store visitors who leave without adding any products to their cart or making a purchase.
Start by choosing 3-4 top best sellers to upsell to this segment.
7. Abandoned Cart Segment: For abandoned cart emails, send compelling messaging without a coupon for customers with low-value carts. For customers who left higher-value carts behind, you can provide a deeper discount after working backwards on the margins.
Email segmentation goes a long way to earn the trust of your subscribers. As you learn more about what your target audience wants, you’ll build out more segments personalized to each of your core ideal customer profile.
Learn more on 16 email marketing flows you need to implement asap here.
Smarte Digital Inc. is an ecommerce retention marketing partner for modern DTC brands. We offer exclusive pricing offers for our ecommerce strategy consulting services and our lifecycle marketing services such as email marketing, SMS marketing services for Q1 2024.
We are also offering a free martech stack audit for Q1 2024. To identify gaps in your tech stack and optimize your martech stack, lets chat. Strengthen your foundational retention strategy now for growth, book a free 30 min discovery call with us at https://smartedigital/contact-us.
