In today’s mobile climate, it may seem like email marketing has fallen to the wayside with early 2000’s favorites like banner ads and pop-ups in favor of trendier options like social media and branded content. In reality, that couldn’t be further from the truth. Email marketing is still one of the most direct ways to reach consumers and boasts an average ROI of $3,800%. That’s nothing to scoff at, and its success can be largely attributed to its astounding reach.
Across all industries, the average email marketing campaign has around a 20% open rate. In other words, your campaign generally reaches one in five consumers who sign up. Compare that to the average Facebook Page’s notoriously shrinking organic reach, which could be as low as 2% depending on the number of fans.
Though 20% is a great benchmark for a newsletter, there are always ways to improve. Largely, marketers have found great success with audience segmentation, the practice of splitting your main list into smaller, more customized segments. This method is all about how you use it and who you target, but even the simplest campaigns see enormous returns. Here’s why marketers have made audience segmentation a real priority.
Audience Segmentation Has Proven Success
Audience segmentation isn’t just good in theory. It drives very real results, and there’s plenty of research out there that proves it. In 2015, a DMA report revealed that segmented and targeted emails generated about 58% of all revenue. Five years later, marketers reported that segmented campaigns led to as much as a 760% increase in revenue, which is certainly nothing to balk at.
Overall, most prominent research has shown that segmented campaigns perform better across the board than non-segmented campaigns. For example, a 2017 Mailchimp study of 11,000 segmented campaigns that were sent to nearly 9 million users found that these campaigns had a 14.31% higher open rate and a 100.95% higher click rate than their non-segmented counterparts. This isn’t actually surprising when you consider the psychology behind it.
Not Every Subscriber Is The Same
Let’s be real: almost no business caters to one specific type of customer. It doesn’t matter if you’re B2C or B2B. It doesn’t even matter if you only sell one product. People are different, and people have different wants, needs, and perspectives. This is one of the reasons why audience segmentation is so successful.
For example, if you’re running a cloud storage company, you may very well have a booming B2B technology business that sells storage space to enterprise companies. You may also sell cloud storage to the average student, who needs the space for their hobby as a YouTube vlogger. Neither of these consumers is more important than the other, but they do have wildly different buying habits.
A campaign that converts an enterprise business, which is probably hyper-focused on security, would almost certainly fail with a student, who may just be looking for the best deal. Instead of a one-size-fits-all solution, a segmented campaign that focuses on audience persona allows you to market to both types of consumers and simultaneously fulfill both needs.
Audience Segmentation Lets You Grab Consumers In At Every Stage Of The Sales Funnel
Just because someone subscribes to your email list doesn’t mean they’re ready to make a purchase. In truth, your email database is filled with subscribers at all stages within the sales funnel. Some may be loyal customers. Others may have made a single purchase. Some may be new subscribers with a little bit of interest, while others may have gotten far enough to abandon their cart. These consumers need different types of information to seal the deal. Enter audience segmentation.
For example, research has shown that emails targeting subscribers who’ve abandoned their cart have an average open rate of 43.3%. That’s far more than the typical campaign because the message is distinctly catered. Similarly, it doesn’t make sense to send a new subscriber, who’s yet to make a purchase and needs a nudge, the same email as a loyal customer, who makes regular purchases and probably just needs to hear about a new product line to convert. Emails that are segmented by the audience’s length of subscription or past purchase behavior can help reach consumers regardless of where they are in their unique buying journey.
Segmented Lists Increase Email Reputation
Unsubscribes and spam reports are killers when it comes to email marketing. Too many negative actions can get your email address relegated into the dark depths of Gmail’s spam filter, where they’re left forever unread. Fortunately, the main cause of spam reports and unsubscribes is a lack of personalization and segmentation. That’s an easy fix.
Segmented emails are naturally engaging, and there’s no confusing them for irrelevant spam. People want to read them because the emails are created with them specifically in mind. On average, Mailchimp’s 2017 study found that segmented campaigns had 3.9% fewer abuse reports and 9.37% less unsubscribes than non-segmented campaigns. When you segmented an audience by interest, abuse reports and unsubscribes were 17.78% and 25.65% lower, respectively.
The Bottom Line
Audience segmentation isn’t just an option like running an A/B test for a subject line or auto-filling a consumer’s name. It’s a priority, but that’s not to say it’s easy. Though anyone can split a list by age and location, it’s a little bit harder to nail down a buyer persona or understand where people are within the sales funnel. This takes some trial and error, a great marketing team, and maybe even a couple of specialized tools, but the effort is worth the enormous rewards.
President – Elevation Marketing
Scott is a balanced risk-taker with nearly three decades of experience starting and growing advertising and marketing agencies. His business acumen is matched with a drive to build creative teams that thrive in open, collaborative work environments. He remains dedicated to helping his talented teams develop unique and effective integrated marketing programs that help employees realize their full potential while serving up impressive business wins for clients.