Email Segmentation… Should I Really Care?
If you ask the average email marketing professional, or CRM manager, they will likely tell you that some level of audience segmentation is important for long-term email success.
However, the average founder of large eCommerce brands and other business leaders who are less into the details of each platform are often of the opinion that segmentation = a smaller audience = less revenue.
So - what’s the truth of the matter? Should you really be segmenting your email campaigns? And if so, what does this look like?
So - let’s first break down why we segment. We essentially segment email campaign audiences to:
Ensure that your emails don’t get blocked by inbox providers (they don’t like it when you send to people who don’t want to hear from you or if you’re not keeping your list clean, eg if you’re sending to a lot of old / broken email addresses)
Create a good audience experience - ideally, we don’t really want to be sending messages to people that are irrelevant to them.
You could argue a third point - to maximise the ROI that your email marketing is providing you, but, for many large brands, email ROI can be up to 200x, so in reality, even if it’s sitting at 20x, it’s doing pretty well compared to probably all other marketing channels, regardless of whether you segment your audience or not!
1. Preventing Being Blocked
OK - so probably the biggest reason is to prevent your emails from being blocked from inbox providers.
Segmentation isn’t on any large business owner’s agenda until their emails get blocked and suddenly they lose out on a stack of expected revenue because their emails couldn’t be delivered to half of their audience.
But, how likely is this, and how can you minimise the chance of this happening while still maximising your email revenue?
How Likely is it I’ll Get Blocked?
As of the time of writing this article, I can say that I have seen some of the world’s largest brands be blocked by inbox providers. I can also say that at least 30% of the brands I’ve worked with have been blocked by at least one inbox provider in the time I worked with them.
What Happens If I Get Blocked?
How Long Will I Be Blocked For?
Blocks mean that your emails will not be received by any of your subscribers that use that inbox, until that inbox removes the block. This could take hours to months, but is often at least weeks, and there isn’t a whole lot you can do to speed up the process. But that’s for another post.
What Impact Will This Have on my Revenue?
The impact of a block will depend on the percentage of your overall audience that uses that inbox. If only a small percentage of your audience uses it, no big deal, but if it’s 50% of your audience, that’s potentially a 50% decline in email revenue for a month with little-nothing you can do to improve it.
How do I Prevent Being Blocked while Maximising my Email Revenue?
This is the question! There is an infinite number of ways we could look at this question and come up with different strategies, however, my playbook is as follows:
Segmentation Basics for Deliverability Health:
While you’re just getting started on your segmentation journey, I’d suggest excluding from your email sends:
Anyone who hasn’t engaged in your emails in 2 or more years
Anyone who has soft bounced 4+ times in the last 90 days
Anyone who has hard bounced at least 1 time EVER (these are automatically suppressed for you in Klaviyo anyway)
Anyone who has ever marked you as spam (these are automatically suppressed in Klaviyo unless someone re-subscribes)
If you can remove these people, and keep your spam complaint rate overall to under 0.01%, this is a great start. A high spam complaint rate is one of the fastest and easiest ways to get blocked.
It’s worth noting, however, that inbox providers do often not share the whole truth when it comes to things like spam complaints, so the real number is often much higher than what’s reported.
In particular, you want to keep your spam complaint rate for Bigpond, Telstra, Microsoft, Outlook and Live inboxes to under 0.01% as these inboxes seem to currently be the most likely to block legitimite senders.
2. Creating a Good Customer Experience
Some brands will care more about this second point than others, but in the long term, this will impact your overall business performance.
Again, there are a hundred different ways that you could look at this but a few examples to get you thinking:
Does it make sense to email people who have just made a purchase at full price that you have a huge sale that’s just dropped?
Does it make sense to email people who have only ever purchased adult clothing sizes and have never viewed a kid’s product or collection, or placed an order for a kid’s product, an email about a new kid’s clothing brand that you’ve added to your site?
Is it risky to send people who have lost their father / mother or have a rocky relationship with their father / mother / son / daughter emails about Fathers Day or Mothers Day?
Do you want to be emailing subscribers who have recently given you a bad review, or have an open support ticket?
How far you go with thinking through your segmentation strategy from a customer experience perspective is up to you, but where I suggest starting is my earlier segmentation tips in this post, plus any additional exclusion segments as makes sense from the above. This gives you a healthy starting point to level up from over time as you learn what works for your audience.
3. Segmentation to Maximise ROI
I know I said that this one is a fairly irrelevant point when for most brands, email is the most effective marketing channel they have anyway, however segmentation can have extreme impacts to ROI. I would not be shocked to see the ROI of a campaign double by using effective segmentation, so it’s a great thing to really start thinking through once you’ve got the basics working for email marketing and are looking for ways to really drive up revenue from your audience.
I’d love to hear what you think! How do you tackle segmentation for your brand, and what impact has this had on results?
