How to Segment Email Lists for More Opens, Click-Throughs and Conversions

Reports of email's death are greatly exaggerated. Every month a new email-killing product comes along, and every month my Gmail inbox continues to swell with product updates, company news and coupon codes.

Heck, those email-killers use email to teach me how their apps work.

Take social media: it was supposed to supplant email as a marketing channel long ago. But email is almost 40% more effective than Facebook and Twitter for acquiring new customers. Twitter still emails me when I gain a new follower.

What makes email marketing so powerful? Some say that the secret sauce is list segmentation—the practice of dividing your email list into groups based on characteristics like interests and demographics.

Segmenting your email list helps you speak more intelligently and directly with your customers, giving them information that they want at the opportune time. And when you do it right, the payoff can be huge: MailChimp found that when their users segmented email lists based on data like location and job title, open rates increased by almost 19%, and click-through rates by almost 22% compared to non-segmented sends.

In this guide you'll learn what email list segmentation is, when you should do it, and how you can put it into action to power up your email marketing.

What is List Segmentation?
What You Need: The Basics
How Will List Segmentation Help Me?
Leveraging Data for Effective List Segmentation
When Should I Segment My Email List?
How Can I Start Segmenting My Email List?

What is List Segmentation?

Bob Belcher owns Bob's Burgers. Every day he serves customers with drastically different food preferences: vegetarians and bacon lovers; regulars looking for "the usual" and first-timers who might be overwhelmed by a massive menu.

Wouldn't it be nice if Bob knew every customer's preferences, background, and tastes when they walked in the door so he could provide each person with a customized menu? Meat-free offerings for vegetarian customers, a "greatest hits" menu for new diners, free sides for his best patrons, etc.

In reality, this strategy would be hard for Bob to pull off in his restaurant—soon he'd be buried in a mess of menus. But in email marketing, personalizing your customer's experience is much easier, and just as effective.

Email blasts that go out to your entire list might help some people, but others will be left confused and in the dark.

Personalization is the purpose of list segmentation: you slice your email list into segments based on what you know about each user—like their buying habits, familiarity with your company, and professional background—then you send each segment of people personalized information.

List segmentation puts unique content in front of unique customers, and that makes everybody happy.

The segments can be as large (for example, people who signed up for your site less than a day ago) or as small (for example, people who bought a specific product after discovering your site on Pinterest) as you want. But generally, the smaller they get, the more likely it is that the information you send will resonate with the recipient.

If you get your segments right, your users will receive relevant emails packed with information that they actually want. That personalization leads to more conversions, more purchases, and happier customers.

What You Need: The Basics

List segmentation might sound daunting. But don't panic: it's an evolving strategy that builds upon itself, and most email marketing tools are set up to handle multiple segments.

It doesn't take much to get started with email list segmentation if you're willing to put some effort into the planning process. Here's what you'll need at a basic level:

User data that's tied to an email address - This data can be anything from someone's gender to their favorite soccer team. If your user data is sparse, no worries: you can collect information and build out user profiles as you go. Some email marketing apps will gather data for you, too, like the recipient's location and level of engagement.
An email-sending tool - Preferably one that plays nicely with list segmentation, like MailChimp, AWeber, or Intercom (we'll discuss these more later).
A way to organize your segments - In their purest form, segments are just email lists with acceptance criteria. Many email marketing apps will manage segment organization for you (some will even automatically sort your customers into segments), but you'll need a rough plan in place before assembling groups.

How Will List Segmentation Help Me?

List segmentation works because it provides an individualized experience via a mass medium. Email is unique because unlike other widespread communications—television, social media, radio—you can craft content for groups of users and deliver it in batches, instead of broadcasting generic content to everyone and hoping it appeals to a majority of your audience.

Targeted emails offer an ideal way to usher prospective customers through your sales cycle without a sky-high price tag or lengthy hands-on time. With the right segments, you can make it easy for customers to understand why they need your product, or what they should buy from you. Plus, accurate segmentation leads to improved click-through rates, conversions, and deliverability.

1. Increase Open Rates

It doesn't matter how compelling the content inside is: if people don't open your emails, they won't be buying what you're selling. Using list segmentation you can send tailored subject lines to specific groups, better enticing them to click.

Proof: Women's fashion site SwayChic segmented their email lists based on buying habits and high-engagement hours during the day, and they managed to increase open rates by 40%.

2. Increase Click-Through Rates

You can spend weeks A/B testing calls-to-action and email designs. But without relevant content, your email click-through rates will plummet faster than a skydiving elephant. List segmentation helps you send customers content that they actually want to see, click on, and interact with by organizing them into interest groups.

Proof: HubSpot used list segmentation as part of their marketing strategy to hit a 16.4% email click-through rate—that's 583% better than the 2.4% standard around the email marketing industry.

3. Increase Conversions

Don't make your customer think. When you hit the sweet spot with personalized content, a strong call-to-action, and a motivated customer, it should be a no-brainer next-step to hit "buy." List segmentation helps you put the right content in front of the right customers, removing as much resistance as possible.

Proof: Isotoner—famous for their gloves and slippers—increased their email marketing revenue by 7,000% by segmenting their list based on which products customers were looking at when they visited the site.

4. Decrease Unsubscribes

When someone unsubscribes from your mailing list, they're cutting off your direct line to their inbox. They're also opting out of a valuable marketing channel. So yeah, try to avoid that.

Think about why you unsubscribe from emails: for me, it's either that someone's flooding my inbox, or that the messages aren't relevant to me. List segmentation can help with both of those problems—it helps you control how often someone gets your emails, and what's in those emails, based on how they interact with your content.

Proof: Constant Contact polled people on why they unsubscribe from emails: 56% said because the content isn't relevant, 51% said because it wasn't what they expected.

To be balanced, though, MailChimp found that segmenting email lists actually increased unsubscribes. It usually wasn't by much—from anywhere between 0.071% and 0.986%—but the data was clear. Here's what the email giant had to say about the surprising results:

"We’re baffled as to why more people would unsubscribe from seemingly more relevant campaigns. We have some theories: Maybe the segmented campaigns were sent in addition to normal batch-and-blast campaigns, which resulted in annoying duplicate messages, or maybe the content was just too specific."

5. Avoid Spam Filters

An email never delivered is just as worthless as one never sent. And it's surprisingly easy to land in a junk folder: Email intelligence company Return Path estimated that 7.56% of emails in the U.S. hit spam filters. Legitimate companies face email deliverability issues every day—we're not just talking about Nigerian princes here.

Many senders hit spam filters because they send irrelevant content too often and to unengaged recipients. Using list segmentation, you can send personalized content that's less likely to annoy customers.

Proof: The team at OpenMoves segmented one client's email list into two groups: people who had and had not clicked on a campaign. They sent an email to the clickers, and nothing to the non-clickers. The results: deliverability improved from 90% to 95% instantly, helping them avoid spam blacklists.

6. Increase General Customer Happiness

Nobody likes generic emails; they're lazy, unhelpful, and a waste of inbox space. So by segmenting your email sends, you're saving your customer time and helping them discover products they'll love. And remember: a happy customer is a return customer.

Proof: The smile on your customer's face :-D

Leveraging Data for Effective List Segmentation

There are no hard-and-fast rules about what information you can and can't use for list segmentation. Really, any data that ties back to a specific email address could be a segment. Every company knows different things about their users based on the products that they offer—for example, at Zapier we know if someone manages their to-do list with Trello versus Google Tasks—but here are a few segment ideas to get you started.

Demographic Data

A customized email from MLB.com shows products from my favorite baseball team.

Demographic data includes any quantifiable characteristics of a person: age, gender, hometown, job, salary, and so on. These are your base-level segments—they help you group users together without getting granular over interests and past purchasing patterns.

But that doesn't mean demographic segmentation is ineffective. Just by segmenting their list into male and female customers, clothing brand Johnny Cupcakes saw a 42% jump in clickthrough rate, 123% more conversions, and a 141% increase in revenue for each email campaign. All that, using only two segments.

Try using these demographic groups to form an infrastructure for your list segmentation:

Gender - Gap sells clothing for men and women, but they won't get me to bite if their emails are pushing sun dresses (my legs are a little hairy for that). Men and women shop differently, and your email marketing should reflect that.
Where they live - When there's a new, popular restaurant in Portland, Maine, Yelp sends me an email about it. That's because Yelp knows that I live in Portland, and that I've rated restaurants around town. Segmenting your list by location helps you guess what a customer might be interested in, which creates value for the customer.
Job title - Jack the intern might use your app as a "team member" for a one-off project. Jill the CTO might buy annual access for her entire team as the "account admin". You wouldn't give Jack and Jill the same sales pitch in person, so why should they get the same emails?
Their chosen persona - The easiest way to understand your users: just ask. I told MLB.com that my favorite baseball team is the Minnesota Twins, so they send discount codes for Twins merchendise. They might get me to buy a new Twins jersey, but I'd never glance at a rival team's products. Segmenting by persona—like a favorite team, a job function, or a personal goal—helps your emails stay out of the trash bin.

Behavioral Data

Amazon's recommendation emails are an extreme example of using behavioral data to sell products, but you don't need a complex algorithm to take advantage of purchasing habits in your email marketing.

Once you understand who's using or buying your product, try to figure out why and how. Are people sending it as a gift? Do they only use one section or feature on your site? Are they just interested in a single product line? You can use that data to send your customers relevant emails based on behavior. Try using these segments to target people based on their interests:

What they do with your product - Knowing which features of your site someone uses most often gives you insight into their interests. At Zapier, we know who uses Evernote and who doesn't—we wouldn't send a lengthy email about our favorite Evernote Zaps to non-Evernote users, because it would be worthless to them. We want to send people tips about the apps they use with Zapier to maximize engagement.
What they buy - This is the classic Amazon strategy: watch what your customers buy, and pitch them on similar products. The tough part here is determining which products are similar: Amazon might calculate that 63% of people who bought a breadbox also bought a toaster. So if someone buys a breadbox, Amazon tries to sell them a toaster, too. Segmenting by purchase habits doesn't require a complex algorithm, though: if a user purchased dark chocolate in the past, send them more email offers about dark chocolate.
Free and paid users - Freemium services should always maintain separate segments for paying customers and users on the free plan. Non-paying users are free-game for email-based upgrade pitches. But once someone provides their credit card info, they don't want sales-focused emails—it's better to keep them engaged with your product so they stay in that paying customer group.
When they last clicked on an email - Click frequency tells you who your most-engaged customers are, but it also tells you who doesn't want to be bothered. Using list segmentation, you can experiment with low engagement in a couple ways: by sending more emails to get the user involved, or fewer to avoid being annoying. Shopping site Fab actually opts users out of emails automatically if they haven't been interacting with the site—that's drastic, but it keeps their open rates up.
When and how often they buy - Sorting customers based on when, not just what, they buy can help you determine a timeline for your email campaigns—you can create segments based on seasonal purchases, or specific data like the peak time of day for click-throughs on Wednesday . If I bought my mother-in-law a candle for Christmas three years running, Yankee Candle better be stuffing my inbox when December rolls around.

Customer Sign-Up Date

LinkedIn uses transactional emails to onboard new LinkedIn Premium users, highlighting exclusive features that come along with a paid plan.

Each one of your customers is at a different point in your sales cycle—some are long-time users, others have no idea what you do. You need to communicate with these people differently. If you're explaining solar eclipses to a third grader and a graduate student at Harvard, would they get the same speech? Probably not.

Segmenting your list by how long someone has been a member of your site can help you gauge how familiar they are with your brand, what they already know, and what they still need to learn.

Onboarding new users - Knowing when someone signed up for your site lets you start an onboarding process, or a walkthrough of how to use your app. Apps like Pinterest use onboarding emails to encourage new users to set up their profile and start pinning. This engages new users and gets them hooked while their interest is piqued.
Rewarding your best customers - Ok, segmenting by how long someone has been a customer is usually more beneficial for app companies. But ecommerce sites can use these insights to thank long-time customers, or delight new ones. Simply sending a coupon code for someone's first purchase—or to celebrate the anniversary of their first purchase—can go a long way in retaining that customer.

Customer Email Client Data

Untappd sends simple, mobile optimized emails that users can easily interact with on their smartphones. Instructables: not so much.

More than 65% of emails are opened on smartphones first. The email marketing landscape is changing, and it's important to build campaigns around each customer's reading preferences.

To improve a customer's experience with your content, account for how and when they're opening your emails. Using list segmentation, you can create groups based on browsing devices and how often your customers use email.

If they're browsing on mobile or desktop - Mobile phones and laptops provide two vastly different email-reading experiences. And while many brands have moved towards mobile apps and responsive websites, a survey from MarketingSherpa estimates that 49% of email marketers still don't segment their lists based on device habits. Consider sending mobile-focused customers a tweaked HTML version that's optimized for the smaller screen—you could even experiment with plain-text templates, which render natively based on device.
When they say they want to receive emails - Instead of trying to pick the perfect send time out of thin air, just let your customers tell you when and how often they want to receive your emails. Ros Hodgekiss, community manager at Campaign Monitor, suggests asking your customers about their email preferences, and creating groups from there. "You can have your subscribers submit their email frequency preferences—either on subscribe, or later, via an email preference center or something similar. Once you have sufficient data, you can segment accordingly."

When Should I Segment My Email List?

Fab can automate which deals hit your inbox based on your browsing habits. They use that data to build an ever-evolving profile of each customer.

The short answer is: almost always. There are very few cases when you'll want to send out a mass email to all of your customers—maybe to announce an acquisition, a site-wide sale, or a change that affects all of your users.

And it's never too late to start segmenting. You can learn about your users and sort them into segments at any time. Your goal is to build a more complete profile of each user on an ongoing basis, factoring in new purchases, activity, and provided information.

Yeah, some things like persona and gender are easier to collect when someone signs up, but sometimes you can infer those factors based on other actions—if someone consistently clicks on necklaces in the emails they get from shopping site Fab, and 95% of Fab's necklaces are purchased by females, it's safe to assume that the clicker is female.

That said, your email list segments are always a work in progress. Let your segments evolve as you gather more data about your visitors, and focus on what converts them into customers. You can divide any segment into smaller ones to test specific sales strategies, or collapse related segments into a single unit if your unique versions are getting out of hand.

How Can I Start Segmenting My Email List?

Effective list segmentation can be a major win for your email marketing, but getting started is a daunting task. What used to be a single-list operation can quickly erode into a tangled mess of email campaigns if you don't have direction.

If you aren't sure where to begin, think through these six steps and try to plan out a flow that would work for your segmented email marketing campaigns.

1. Define Your Data Points

First thing's first: you can't build segments without data. The data that matters most to your company is going to depend on what kind of product you sell—for example, Target is more interested in whether or not you have children than Dropbox would be.

So before you start segmenting, decide what customer data will help you sell more efficiently, how you're going to organize that data, and how you're going to collect the data that you don't have.

At Zapier, we ask new users about their professional background—marketing, business owner, project manager, developer, and so on—and use that information to give them more relevant Zap recommendations. And since we integrate more than 350 apps, we find that our customers appreciate a nudge in the right direction.

But your main goal here is to get people to the activation stage of your sales funnel—whether that means getting them to buy something or use a specific feature. So to make the most of your email marketing, focus on optimizing your data-gathering processes so it fits your conversion goals.

Answer these three questions:

What data are we already collecting? - These are your lowest-barrier-to-entry segments.
What data can we start collecting? - These are data points that you have the ability to track, but haven't organized into usable information.
What data do we need to ask for? - This is data that you need to request from your users directly, or that you need to engineer a way to collect.

You likely won't have all the data points you want, and your current data-gathering framework won't always support the tests you want to run. That's when you need to pull in development resources, or invest in a third-party tool (we'll touch on those below).

2. Create Personas for Your Customers

Great Chinese General Sun Tzu's military wisdom was highlighted by three words, "Know your enemy." That's fine and good for wartime tactics, but on the battlefield of email marketing, try adopting a different mantra: know your customers.

Every company should know who their best customers are—mothers, college students, beer snobs, audiophiles, lobster fishermen, whatever. But not every company goes in-depth to create personas for those customers.

Customer personas provide bedrock for your list segmentation, because they help you define which segments need which message. To build a helpful customer persona, try to answer these questions from HubSpot:

What demographic information do you know about this customer?
What are the pain points for this customer?
What do they want to accomplish (and how can I help them accomplish it)?
What does a day in their life look like?

If I wrote up a persona for someone who shops on high-end fashion and lifestyle site Gilt.com, it might look something like this:

Nick is hitting his professional stride: at 30, he's a senior marketing manager at a Fortune 500 company in New York City, and he's finally pulling in enough money to enjoy some of the finer things. He likes to dress well, but that doesn't mean he's willing to blow a day's pay on new shoes—frugal habits die hard. Nick spends a lot of time working, but on the weekends he likes to play basketball and catch a movie with his friends; shopping isn't his idea of the perfect Saturday.

This persona tells us demographic information about Nick (30-year-old living in NYC), his career and seniority level (senior marketing manager at a large company), his motivation (dress well without breaking the bank), and his pain points (doesn't want to shop around or pay marked-up prices).

We can see that Nick spends a lot of time working, so you might put him in a segment focused on office attire sales—suits, ties, belts—and mix in some high-top sneakers to appeal to his love of basketball.

3. Choose Your Segments

Now that you have your data and understand who you're talking to, choose some email list segments to experiment with. We covered some ideas that work for other companies in the "Leveraging Data for Effective List Segmentation" section above, but feel free to get creative with your groups based on the unique knowledge that you have about your customers.

For example, at Zapier we know which apps small business owners tend to use, like Google Docs, Gravity Forms, and Evernote. We could create an email list segment that contains small business owners, and send them tips on how to automate Gravity Forms and Google Docs.

4. Create Your Content

Once you decide on how to segment your email lists, you need to write and design content that's targeted towards each group. Finding the right voice takes experimentation, and we could spend many blog posts covering copy strategies. So instead of doubling the length of this chapter, check out these excellent guides to creating appealing email content:

Vero: "The Ultimate Lifecycle Email Marketing Guide"
Constant Contact: "Improve Your Open Rates with These 12 Subject Line Tweaks"
Customer.io: "How to write emails people actually want to read"
MailChimp: "Write Effective Subject Lines"
Copyblogger: "37 Tips for Writing Emails that Get Opened, Read, and Clicked"

5. Employ an Email Marketing Tools' Segmentation Feature

You have data and a plan to use it. Now comes the fun part: sending your emails out into the world. For that, you're going to want an email marketing app that can handle list segmentation and make multiple sends a breeze.

Here's a brief look at some of the more popular marketing apps out there, and the list segmentation features that each one offers.

MailChimp

MailChimp makes sending email newsletters painless. And they apply the same philosophy to list segmentation: MailChimp lets you segment lists by location, engagement, sign-up date, and more using a straightforward interface. You can also save segments and automatically add users to those segments if they meet your chosen criteria.

To learn more about MailChimp's list segmentation features, read their documentation.

Customer.io

Customer.io calls their list segmentation features "Segment Triggered Emails," and they work a little differently than standard list groupings. Users trigger these emails once, whenever they enter a segment—like reaching the 3rd day of a trial period, or enabling a feature on your site. These tools are great for crafting campaigns like welcome emails and onboarding scenarios.

To learn more about Customer.io's list segmentation features, read their documentation.

AWeber

AWeber offers one of the most robust sets of list segmentation tools on the market. You can carve up your AWeber email lists by who opened certain emails, which pages people visit on your site, who's clicking on links in your emails, and other information that you collect with their custom forms.

To learn more about AWeber's list segmentation features, read their documentation.

Intercom

Intercom's list segmentation capabilities are built on three different features: filters, segments, and tags. Filters let you sort through your email list for users who meet specific criteria, like when they signed up and how active they are on your site. Segments are created from filtered lists, and Intercom will automatically add new customers to these segments if they match its rules. Tags work like segments, but there's no automation involved—in other words, they're totally custom segments.

To learn more about Intercom's list segmentation features, read their documentation.

Vero

Vero focuses more on behavior-based transactional emails—like triggering a message when a user visits a specific page—than newsletters. But segments come into play here, too: Vero treats segments like individual lists, and they're built based on user behavior, past emails, and distinct events.

To learn more about Vero's list segmentation features, read their documentation.

Custom App

Sometimes it's easier to build a custom solution that fits your needs. That's what Zapier did with Django Drip, a Django-based email sending service that lets us dispatch messages based on very customized segments.

With Django Drip, we have the ability to build solutions for gaps in our email campaigns, while keeping our user data in-house.

More Apps That Offer List Segmentation

Those aren't the only apps that make list segmentation a breeze. Here are some quick links to other services (in alphabetical order) that let you segment lists:

ActiveCampaign - List Segments
Benchmark - Segments
Campaign Monitor - Segments
Constant Contact - Segment Contacts
Emma - List Segmentation and Dynamic Segments
FreshMail - Segment a subscriber list
GetResponse - Advanced Segmentation
Hatchbuck - Tags
HubSpot - Segmenting Tools
iContact - Segments
MailUp - Groups
Mailgen - Email List Segments
Pardot - List Segmentation
VerticalResponse - Segments
Vision6 - Segment your Sends

6. Measure, Adjust, Repeat

Now that your emails are out in the world, you get to collect another kind of data. Make sure you're tracking how people interact with your emails: measure what they open, what they click on, and what kinds of content get them engaged.

And once you crunch the numbers, use that knowledge to improve future campaigns. If open rates skyrocketed after lunch, try sending more emails around 2 p.m. If you saw better click-through rates on emails with images, apply more visuals to your messages.

You can speed up the learning process with A/B testing—these experiments go hand-in-hand with email marketing because it's so easy to split any list into "A" and "B" groups.

Continue making small, iterative changes, testing them against your current email campaigns, and applying your takeaways to your other segments.

Conclusion

Each of your customers has a unique background, set of interests, and level of experience with your brand. So don't send all of them the same emails—with list segmentation, it's easy to personalize your message based on the recipient's interests, demographic information, and purchase history.

With a strategy and the right tools, you can customize each user's exposure to your email marketing flow, and maximize the impact of every opened message. When you provide more relevant content, everybody wins.

Segmenting your email lists will help your emails reach the best people, but it'll also give you a bit more work. To offset that—and to make the rest of your email marketing strategy viable—you'll want to automate as much of your email marketing as possible. In the next chapter, we'll look at the ways you can use Zapier to automatically add new subscribers to your lists, move existing subscribers between lists, and more.

Go to Chapter 5!

Image credits: Mailboxes photo courtesy of Beate Meier. Email filter graphic created using icons from Edward Boatman, José Campos, Agus Purwanto and Megan Sheehan of the Noun Project. Smile GIF courtesy Giphy

What is List Segmentation?

What You Need: The Basics