Increase email response with market segmentation

6 min read
Ashliegh Gehl

Email automation is an efficient practice. It allows companies to schedule promotional emails in advance, delivering timely content to a large number of customers at once. It also provides immediate insight into what information and offers appeal to customers and what don’t. Where companies go wrong is in thinking that email marketing is a one-size-fits-all strategy. Market segmentation can enhance your email game with personalized messages.

Related: Beginner’s email marketing guide for small business

What is market segmentation?

In a nutshell, market segmentation is the practice of dividing a customer or client list into smaller groups with shared commonalities and/or characteristics. The goal? To send these groups personalized emails.

Market Segmentation Fedoras
Segmentation allows businesses to send emails that are tailored to the recipient.
Photo: JOSHUA COLEMAN on Unsplash

It’s the exact opposite of a one-size-fits-all approach.

It’s specific, strategic and it’s tailored to your customers. They’re unique, and your creative marketing materials can — and should — appeal to their particular interests.

Why relevance matters

When emails are not relevant to the recipient, they’re not opened. When they’re not opened, all of the time and effort spent on crafting an email that upholds your company’s brand and culture are lost. If this happens too much, they may completely unsubscribe from all future emails.

This is why market segmentation is a critical component of any email campaign.

There are four main bases of market segmentation.

1. Demographic

This grouping method is organized around the basic characteristics that define us:

  • Age
  • Family size
  • Income
  • Race
  • Religion
  • Gender

When creating contact forms or profile pages on your website, try to collect demographic details you can use for your market segmentation campaigns. You can decide which characteristics are important to you.

But remember: if forms are too complex, don’t look intuitive or seem like they take a long time to complete, you could lose out on a potential client because the ask is too high. That’s why it’s important to determine what data is most valuable. Keep the questions to a minimum.

Knowing the details pays off

An example of this is a travel company. Knowing family size is an important variable to have on file. If there’s a Mediterranean cruise sale for solo travellers between 30 and 40 years old, you can pull a list of these customers from your master list and tailor the email accordingly. Likewise, if there’s a great discount on a Disney cruise, you’re going to want to target families. But you can only pull this list if you have the data.

By appealing to just the people who may consider such an opportunity, you’re not bombarding those outside of those parameters with emails.

2. Geographical

Let’s say you own a clothing store in Toronto, on the Danforth, and the objective of your email campaign is to attract local shoppers who live in Toronto’s east end to a sale. It’s your company’s way of showing appreciation for local supporters.

Market Segmentation
A postal code is all you need to send out geographically targeted emails.
Photo: Lauren Richmond on Unsplash

With the geographical data you’ve collected through your forms and profiles, you can easily send out an email to everyone on your list, but that’s too broad for this campaign.

Market segmentation helps you focus.

It can be further refined to everyone in Ontario. Again, still too broad. Even Toronto as a whole doesn’t bring you close enough to the objectives of your campaign.

If you’ve asked your customers for their postal codes, you can send emails to just those living in and around the Danforth. Toronto is a city made up of many unique neighbourhoods, after all, and having something as simple as a postal code can be used to your advantage. This is one way to increase foot traffic to your store.

3. Behavioural

One of the main ways to look at customer behaviour is to identify usage and habits. Through market segmentation, you can create email lists of light, medium and heavy users of your product or service.

Let’s say you own an organic health food store. Your emails to heavy users would include the exclusive perks, discounts and promotions available only to loyalty members. Your company may have a loyalty card program where your customers can collect points that turn into savings on future purchases.

Emails to medium users would be worded differently and list the perks of joining the loyalty program, along with an invitation to join. The objective is to turn your medium users into heavy users; and light users into medium users. Through behaviour (i.e. frequency of purchase), you can assess where your customers are in the loyalty funnel and move them to the next level.

4. Psychographic

This grouping method focuses on specific interests your customers have. Such data can be gathered through past purchases, surveys or profile pages that ask for details about hobbies and very unique areas of interest.

What are your customers really interested in?

If you own a pet store, you’re going to want to know if your customer has a cat or a dog. You don’t want to send an email about discount cat food to a dog person.

It’s the same for the organic health food store owner who has a sale on locally raised beef. This isn’t the type of email you want to send to vegans or vegetarians. They’re just not going to buy the product. The email isn’t relevant.

Where to begin market segmentation

Market Segmentation Pizza
By dividing your customers into smaller groups, you can serve them better.
Photo: Julian Rojas Dättwyler on Unsplash

If you haven’t been collecting data, the best place to start is by creating data fields related to the four bases of market segmentation:

  • Demographic
  • Geographical
  • Behavioural
  • Psychographic

You can incorporate questions on each of these into online customer profiles or in a survey that’s linked to a special promotion or giveaway.

When creating email campaigns, imagine the segment you’re writing to and present information that’s of interest to them. Building loyalty takes time; it’s hard work. But market segmentation takes your communications to another level.

We all have companies we can’t wait to get an email from. Sometimes, we’re even excited about it. And that’s the goal — having your customers positively receive your materials and be actively engaged. So divide … and conquer.