How to Increase Your Revenue With Newsletter Segmentation

11 min read

Did you know that segmentation of your mailing list can increase profit by 7,000%? Internet retailer Totes Isotoner Corp. increased revenue in 2010-2011 with a fantastic newsletter by properly segmenting their subscribers. There’s more info at the end of the article, but first we want to tell you how to use email marketing segmentation to drive your own results.

Why sending email to the entire subscriber base is harmful

Let’s say you have collected an base of thousands of contacts. You have an inexpensive and effective channel for communicating with customers, but you need to make sure you are making the most of your subscribers.

First off, avoid spamming your entire list of contacts. This will cause even the most loyal customers to unsubscribe from your newsletter. You need to make sure that your are providing a service and not an annoyance to those subscribers; anything else is going to create a huge issue. It stops now!

Parameters to segment

While there is a difference in the segmentation methods for B2C and B2B bases, the principle is the same: your offers should be developed for a specific customer group with specific interests. Check out the following segmentation options to see which is right for your business:

For retail customers

Gender

For example, you sell electronics. Know your demographics. Tablets and technology appeal more to women, while PC hardware is purchased much more often by men.

Geographical segmentation

If you have multiple branches in different cities, it is important to ensure that there were appropriate contacts in the message body. If you see that people from New York increasingly interested in irons, and in Washington people fell in love with your ovens, then you should make different newsletters for each of these regions.

Interests

You can conduct a survey and find that users of group “A” need wallpaper for a child’s bedroom, and the user group “B” needs wallpaper for the living room. Use that info to create different letters for these groups.

Age

What if you sold cosmetics? Start sending the newsletter throughout your subscriber base saying you have cosmetics for different ages. It won’t immediate segment your email, but it will plant the seeds for that to take off.

Purchase history

Take all the info that you’ve gathered from prior customer orders, things like purchase frequency, purchase amounts, average purchase price, and so on. Segmenting newsletters based off purchase history can be used to encourage your customers: the more people buy, the bigger a discount you can offer to them. Purchase history can give a hint to what people will be likely to buy next time.

Readiness to purchase

According to HubSpot, 80% of users are not ready to buy after their first visit to a site. Therefore, there’s a commonly used tactic of “lead nurturing”: the user is offered different content at each stage of the sales funnel. For example, the first offer is to download a free e-book with useful tips for applying wallpaper to a wall, and then you can talk about the types of wallpaper adhesive. Once a prospective customer has opened all the previous newsletters, you might offer him a discount on the wallpaper.

For wholesale customers

The value of the company

There is an option to offer a corporate discount for specific companies. Let’s say you sell office supplies. The amount of the order a company will make depends on its number of employees. Separate the proposals for small and large companies and follow their growth.

The authority to make a decision

If you are doing corporate sales and get to the email list of different employees, know if a particular person is authorized to make the decision to purchase. Rank contacts according to their ability to make decisions. Send useful materials about the product to managers, and send discounted offers to the people in charge.

The financial performance of the company

This will tell you about the likelihood that a company will be buying your products. There’s no surefire method for dissecting this, but you can judge it by the volume of their previous purchases. Keep an eye on your segmentation so you don’t send exclusive offers for large volumes to smaller companies that they won’t be able to use or benefit from. You gain nothing from this and stand to irritate the customer as well.

Interests

If a company operates in a certain industry, be aware if they focus on a particular niche. For example, if your shop is all about bed linens for babies, there isn’t much sense in sending customers an offer for full-sized bed linens.

Segmentation by geography, purchase history, and readiness to purchase works with wholesale customers as well as with retail customers.

Plus, subscribers can be segmented by activity: how long ago they have opened your emails and how often they have clicked. All popular services (Mailchimp, UniSender, GetResponse) offer functionality that will let you track click-through. You can make a newsletter for active readers, and an alternative one for those who are looking for messages from you every 2 months. For those who never open them, send another newsletter to find out why they don’t, and include the polite suggestion that they unsubscribe. Clearing up your lists makes segmentation more effective.

How to set the segmentation

Segmentation should be part of your business process so you can quickly set up a campaign and choose the desired group of subscribers. Getting an email address and a signup for the newsletter is just the cornerstone. You need to collect as much information about the subscriber as possible, including the following:

1. Add an optional field to the form of subscription

Only minimal knowledge can be obtained by collecting addresses. Find out how old your potential customer is by asking when their birthday is. Just like that, you will have 2 options for segmentation.

1. Track purchases

How much did your customer buy? How much was their purchase and what is the average order? You can get this info from your analytics system, which will collect information on every purchase. In Ecwid, store information about customer activity is collected automatically. If you use Mailchimp, connect it to automate the creation of subscriber segments.

1. Conduct surveys

Send surveys to the loyal customers periodically and ask questions to open up communication about their interests.

1. Improve your analytics system

Every single move a customer makes on your site can be analyzed by analytics. To do this, use Google Analytics. It’s free! It’ll show you where your clients came from, what they did before a purchase, or what they were doing before they abandoned it. Segmentation by behavioral factors gives the highest results. To integrate analytics systems and email services, you will need to automate marketing.

We don’t have the time to cover it here, but there are plenty of resources to help you do that on the blog.

1. Analyze traffic channels.

Analyze your traffic channels and conversion from every channel. Drilling down into a particular resource can tell a lot about your new subscriber.

How segmentation boosts revenues

Now it is time to tell you more about that 7,000%. In 2010, the online retailer Totes Isotoner Corp. carefully looked at their analytics and saw that many visitors wandered around the site for a long time and left without a purchase. However, the loyalty of those visitors was enough to leave their email addresses in the subscription form.

Marketers of the company developed a trigger newsletter (automatic distribution when prepared letters are sent if the user did some action on the site). Segmentation of users was conducted by two parameters:

the number of viewed products
the number of viewed categories.

Once the number of viewed products reached a certain number, the client got an email with an offer pertaining to the category of goods they had just viewed. Emails with dynamic content were created (such messages can be set up to automatically substitute different pictures and texts), and they also set up a tracking system (fix the number of actions on the site).

It worked: a customer was looking through the 7-8 items and left the site without buying, then they got a newsletter featuring the goods they just checked out. This helped motivate the customer to make the purchases they were eyeing.

As a result, the yearly revenue from email marketing increased by 7,000%.

Conclusions

Never start spamming your whole list.
The initial segmentation can be enough to use the information that a subscriber leaves when signing up. Then with the help of creativity and attention to analytics you can improve your segmentation.
Use web analytics for your site. Many of them are free, but the information that they give is priceless.