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Despite the surge in social media, email remains at the core of small business marketing for several reasons. According to the HuffIngton Post:

  • Email still has the highest ROI of any marketing channel (more than social media and direct mail).
  • Shoppers who come to a website via email marketing shop more and spend more.
  • It’s the second leading channel for customer acquisition growth, behind organic search.

Another great thing about email marketing is that it can be easily measured. Small businesses can keep an eye on open rates, click-through rates, unsubscribe rates and so on.

However, getting these numbers to where you want them to be isn’t easy. Most small businesses treat email blasts as just that – blasts. One message sent to all their email subscribers and hope for the best, right?

Of course, there are many things you can do to boost your email response rates such as refining your subject lines, email copy and calls to action. That’s great, but you’re probably ignoring the most important element in email marketing success – list segmentation.

What is list segmentation?

Every person on your email list is different. They have different interests, preferences and buying behavior. Every time they open an email from you they want it to speak directly to them, to their needs and desires. According to Constant Contact, 56 percent of people who unsubscribe from a business or nonprofit list do so because the content isn’t relevant.

Consider this example: If you run a clothing store that sells styles for men, women and children, the men on your list probably aren’t going to be interested in your latest email promoting a new range of fashions for girls aged 6-8.

Sending emails to the wrong target like this only serves to increase opt-outs and generate customer fatigue. If your emails don’t speak to your target or connect with their needs, they’ll start taking less notice of them in the future.

However, if you can do a better job of narrowing down your list, the better results you’ll get.

Segmenting your list starts with data

Your email list is only as good as the information in it.

Make sure your email subscriber form, whether it’s paper or online, captures both the basics (email address, and first/last name) plus some additional information.

Going back to the clothing store example, add a few more fields so that the subscriber can specify whether they’re interested in men’s or women’s fashions. Do they want to receive messages about special events, sales or promotions? Would they prefer to learn about specific clothing lines or brands?

Incorporating data about buying habits is also an important element of list segmentation and is a useful starting point to help individualize your emails based on information about the recipient. For example, you could use insights into recent purchase history to cross-sell your products: “We hope you’re loving item ABC, why not compliment it with XYZ?”

Other ways to break up your list include:

  • Separating prospects and customers
  • Separating those who have purchased from you in the past six months from those who haven’t
  • Group people who responded a certain way to survey questions sent from your email software
  • Segment those who clicked a certain link in your email or responded to a specific call to action
  • Use email metrics to see who’s opening what, then add these names to a separate list

The options are limitless.

You’re going to need the right tools

So how do you do all this cool stuff?

Most email marketing software includes basic email segmentation and list management tools. Using these you can create lists and send targeted emails.

For more dynamic list segmentation capabilities, consider the advantages of sales and marketing automation software. These tools combine the features of email management software with the ability to create campaigns based on your subscriber’s behaviors (what emails they responded to, making a purchase, the type of purchase they made, attending an event, downloading a resource and so on). For example, if you emailed a contact offering them a free download but they failed to respond, you can set-up a series of automated follow-up emails reminding them about the offer.

Likewise, if a customer bought item A, you can follow up and entice them with information about a related item and send a sequence of emails with more information, discounts, demo invites, etc.

Keep your lists clean

Once you have your lists in place, you’ll need to manage them.

The most important metrics you’ll need to keep an eye on are bounce rates (undeliverable emails) and your unsubscribe rate (although the more targeted your messages are, the lower your opt-outs will be).  Bounce rates can be caused by your email being labeled as spam, typos in the email address or closed email accounts.

Make a habit of regularly purging your lists of bad names. Check email addresses for typos during the acquisition phase and remove inactive names (6 months or older) and add them to a separate list. This doesn’t mean you won’t email them again. Instead, send them a different message – perhaps a special incentive to get them active again.

Do you segment your small business email list? What’s worked for you? What hasn’t? Please leave a comment below and share your best practices.

About the Author(s)

U.S. Small Business Administration

The SBA is an independent federal agency that works to assist and protect the interests of American small businesses.

U.S. Small Business Administration
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