Segmenting helps boost your email program's response rate because you are better able to tailor offers to match subscribers' needs, wants and interests. This article explains how to do it even if you think you have no information about your audiences.

In case you didn’t get the memo, batch-and-blast email marketing is out. Sending out a single email message to every address in your database whenever you wanted is so 20th Century now!

Advances in email list-management software, plus changes in subscriber expectations driven by spam and more sophisticated email users, have altered the marketing landscape to the point where you need to work harder than ever to make sure every message you send is relevant and useful to your subscribers.

Email’s great advantage is that it is as close to a one-to-one communication medium as you can get. You get there by developing an email message that you can tailor to many different segments of your database, using all sorts of factors that affect buying behavior.

This procedure, called segmenting, allows you in effect to create a series of highly focused mailing lists without have to re-enter the data every time or without requiring subscribers to sign up for many different mailing lists in order to get the email they really want.

The beauty of segmenting is that you can apply this approach to your entire sales spectrum, from lead generation via email to response-generated emails based on an individual’s Web behavior to list management and deliverability.

Why You Should Segment Your List

Sure, batch-and-blast is easy. However, segmenting can help you boost the overall performance of your email marketing program because it can improve both revenue and list quality:

• Revenue: Subscribers are more likely to open and act on mailings that more closely reflect their needs and interests. Jupiter Research studies have shown that you will see a greater return on your investment when you target your mailings. A campaign that uses segmenting based on past behavior, such as opens, clicks or conversions, can bring in nine to ten times more revenue than one in which the entire list receives the same message.
• List Quality: Segmenting can help you keep your mailing list fresh and engaged. For example, target subscribers who haven’t opened or clicked in your emails for a while and try to re-engage them.

Also, get new subscribers – the ones most likely to open and click – by targeting them with a welcome message, special offers to capitalize on their enthusiasm and other incentives to get them into the fold.

This can help your deliverability, because when your messages are more targeted and relevant, they will stand out in an overflowing inbox.

Ultimately, your subscribers will be more likely to open and act on your emails and less likely to delete them or report them as spam when they’re relevant and expected.

How Segmenting Works

You need two ingredients in order to segment effectively: some relevant data and list-management software that can create those sublists.

Typically, you can get good, actionable data by using information subscribers hand over to you when they sign up for your emails or register as a customer at your Web site, as well as information they generate by how they act on your email messages or behave at your Web site.

Email Data:

• Age
• City or location
• Interests
• Motivation (how soon do they expect to buy?)
• Other mailings lists of yours that they also sign up for
• Opens
• Clicks on links to landing or forward-to-a-friend pages, contact information

Caveat: Don’t ask for too much information at registration. You probably haven’t established the kind of trusted relationship with your prospective subscriber, even with your real-world customers, that would make them feel comfortable handing over demographic data such as household income.

You can, however, create a list segment and send a targeted email inviting them to come back to your Web site and fill out a survey or preference page, which can collect the more useful data you need to sharpen your messaging even further.

You can also use traffic data your subscribers generate when they visit your Web site, especially if you use list-management software with integrated Web analytics, like the newest Lyris ListManager 9.3 with ClickTracks Web Analytics:

• Which pages they clicked on, in which order, and how long they stayed on each page
• Which products they clicked on without acting on
• Products they clicked on and added to their shopping carts
• Whether they abandoned their carts
• Whether they are first-time buyers or repeat customers
• How much they spent
• Which keywords they used to find your site

Even if you don’t collect much data from your subscribers through surveys and preference pages, you still have plenty of information based on their email history, such as how long they’ve been on your list and how often they open or respond to your mailings.

Real-World Example: Eliminating Non-responders

Let’s say you want to trim the deadwood from your mailing list to stop wasting money on emails that are being deleted unopened or are piling up in abandoned mailboxes. Segmenting can help you quickly identify your non-responders and either get them back as active customers or give you a reason to drop them from your list.

To do this, send an email to anyone who hasn’t opened your emails for six months or longer and invite them either to update their preferences or unsubscribe. Anyone who doesn’t respond within a set time would be dropped.

ListManager gives you other options to base a segment on, such as those that haven’t clicked on or converted from your email messages in the same amount of time, although applying either of those could take too many names out of your database all at once.

However, assuming the address is still valid, you don’t want to simply toss it away, because you probably had to spend something to acquire it and you’d like one last chance to recoup your cost with a sale or other display of interest.

Follow these steps to create a “We want you back!” segment using subscribers’ lack of response:

1. Go into the “Segments” area of the ListManager interface and choose the “Action” option, which divvies up subscribers according to whether they opened your message, clicked on links in it, visited your landing page or converted (purchased a product, downloaded a white paper, subscribed to a newsletter, etc.)

2. Specify the cutoff date or time period and direct ListManager to create a segment of all addresses added on or before that date.

3. Choose “Save” to retain the segment.

4. Create your mailing as you would your regular email messages. In it, acknowledge the lack of response and either wave a tempting offer under their noses, invite them to update their preferences or their primary email address, or provide unsubscribe instructions so that they can opt out.

5. Be sure to select the list segment you just created so that you don’t send the message to your whole list.

6. Hit "Send." You did it!

Once you send this mailing, watch all the incoming mailboxes associated with your email program and track opens, clicks on the offer link and clicks on the unsubscribe link.

If you get a low response – say, less than 20% open rate and less than 5% click rate on any link in the message – you might consider removing any non-responding addresses from your database at this point. Do this especially if you receive a markedly higher number of spam complaints forwarded from ISPs. You don’t want to do anything to jeopardize your sender reputation.

If you generate more positive responses, try the mailing one more time. Create a second list segment of all those who didn’t respond and send one more mailing, then drop any anyone who doesn’t respond in, say, a week or so.

Two notes on this process:

1. This is a handy step to take to keep your mailing list up to date, because it protects your sender reputation. Your reputation is the No. 1 factor many ISPs use to decide whether to route your email through to the inbox, to block it completely or to detour it to the junk folder. If you email too often to abandoned mailboxes, ISPs will notice and suspect you of being a spammer.
2. This process works only with HTML email, because you can’t track opens with text-only email. Instead of using the open rate as your basis for creating the list, choose click/did not click instead.

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