Our favorite segmentation tactics & common pitfalls  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

November 06, 2024   |   Read Online

Jimmy Kim & Chase Dimond

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Hello and good morning! Chase and Jimmy here ready to nerd out on one of our favorite email marketing topics: segmentation.

It’s a topic that we all know about. But, do we REALLY know it?

That’s what we’re digging into today. We want to take your understanding of segmentation from basic to intermediate. And here’s the good news: By simply opening this email, you’ve already taken the first step.

So grab your coffee and gather round because we’re going to cover how and why sending personalized, relevant content for different audience groups can transform your engagement, boost conversions, and deepen customer loyalty. Plus, we’ll explore practical strategies for segmenting your audience and cover common mistakes to avoid along the way.

But first, a few goods:

🎙️ New Episode Alert! The Science of Copy: How to Drive More Opens and Conversions in eCommerce Email Marketing - EP5

Strong copy = stronger sales 💪 In this NEW episode of Send It, Jimmy Kim and Chase Dimond uncover the art and science of copywriting for email and SMS marketing. They explore a wide range of copy styles, actionable tips, practical insights, and proven fundamentals—like the Rule of One—to help you craft more engaging, high-converting messages.

And a major thank you to our sponsor AppBrew! Now, without further adieu, let’s send it—Watch the episode on YouTube or listen in on Spotify or Apple.

💡 Knowledge Drops of The Week

When it comes to copywriting, it’s not just about stringing together clever words—it’s about creating a real connection.

Want your copy to click? Use our six-step story-based framework to keep your audience hanging on every word ⤵️

And we thought it only made sense to include these wise words from Aaron Spivak as you gear up for BFCM. 👀

Beyond the Basics: Leveraging Segmentation for Boosted Engagement & Retention

Why Segmentation Matters for eCommerce Success

Segmentation is the powerhouse tool that allows brands to connect with their audience on a personal level. By grouping your audience based on behaviors, demographics, and other factors, you can create campaigns that resonate more deeply and drive higher engagement. Keep scrolling to explore the essentials of segmentation, from understanding the basics to using it strategically for email and SMS marketing success!

But first, what is Segmentation?

Think of segmentation as slicing a pie: while the whole pie is your audience, each slice represents a different group within that audience, based on shared characteristics. This lets you target messages and offers that align with each segment’s needs, behaviors, and preferences.

In eCommerce, segmentation can be broken down into three primary types:

1. Behavioral Segmentation: Based on user actions like past purchases, website visits, or email engagement.
2. Demographic Segmentation: Based on characteristics like age, gender, and location.
3. Psychographic Segmentation: Based on interests, values, or lifestyle preferences.

Why is segmentation THAT important?

1. Increased Open and Click-Through Rates: By sending more personalized messages, your emails become more relevant, leading to better open and click-through rates.
2. Reduced Unsubscribes: People unsubscribe when content doesn’t feel relevant. By segmenting based on engagement or interest, you can avoid sending unwanted messages and keep your list healthy.
3. Higher Conversions and Revenue: Tailored messaging often leads to increased conversions. Customers are more likely to buy when they receive offers relevant to their interests or recent interactions.
4. Lower Customer Churn: Segmentation allows you to stay relevant, which reduces customer attrition. For instance, you can send re-engagement emails to customers who haven’t purchased in a while.

Implementing RFM Segmentation: Recency, Frequency, and Monetary Value

Our favorite way to segment customers is by using the RFM analysis—Recency, Frequency, and Monetary Value. This method evaluates how recently and how often a customer buys, along with how much they spend, enabling more precise customer targeting.

Here's a breakdown:

• Recency: When was the last time the customer made a purchase?
• Frequency: How often does the customer buy from you?
• Monetary Value: How much do they spend on average?

Implementing RFM can enhance customer retention by ensuring your most valuable customers receive the attention they deserve.

5 Key Segments for Effective Email Marketing

With so many ways to segment an audience, it’s easy to get overwhelmed. So, when in doubt, here are five essential segments that every brand should be using to increase engagement, re-engage lapsed customers, and build loyalty with their most valuable customers:

Prospects (Non-Purchasers): Engage them with relevant content to convert them into buyers.

Inactive or Lapsed Customers: Win them back with personalized offers and re-engagement tactics.

High-Value Customers: Offer loyalty programs and VIP treatment to your top spenders.

Frequent Buyers: Keep them engaged with exclusive product launches and offers.

Discount Shoppers: Target these value-conscious buyers with special deals, particularly around major sale events like Black Friday.

10 Common Mistakes to Avoid in Segmentation

While segmentation is incredibly powerful, it’s also incredibly easy to get it wrong. Here are the most common mistakes to avoid:

1. Over-Segmenting: Getting too granular can backfire. Tiny audience slices can lack the volume needed to yield meaningful results, making it hard to see the impact of your efforts. So, ensure each segment is large enough to provide statistical value. Ideally, each segment should contain a few thousand people, so you have enough data to make informed decisions.
2. Under-Segmenting: At the opposite end, under-segmentation means you’re lumping too many people together, which misses the nuances of different buyer types. If your emails are only split between “non-buyers” and “buyers,” you’re missing opportunities to get more personal with each audience type. Consider breaking down segments more thoughtfully to avoid sending generic messages.
3. Ignoring Behavioral Data: Behavioral data—like browsing history, purchase patterns, and website activity—offers a wealth of insights. Knowing whether someone has recently added items to their cart but not purchased, for example, lets you send targeted reminders or exclusive offers to help close the sale.
4. Using Static Segments: Using static lists that aren’t dynamically updated can cause you to miss out on real-time engagement opportunities. Keep your segments dynamic so they adjust as subscribers take action. When someone makes a purchase or engages with a recent email, they should automatically move to a new segment.
5. Assuming Instead of Analyzing: It’s easy to assume you know what your audience wants, but assumptions are often incorrect. Instead, base your segmentation on data, analyzing click and open rates, purchase history, and other engagement metrics to guide your strategies.
6. Failing to Optimize and Iterate: Segments are not set it and forget it. Regularly review the performance of your segments and adjust as needed. Are some segments consistently underperforming? Is one particular segment driving the majority of your sales? Optimization is key to ensuring your segments continue to deliver the best results.
7. Failing to Personalize the Messaging: Tailored segments require tailored messages. Avoid sending the same email to every segment. High-value customers, for instance, deserve a different message than inactive buyers. Take the time to adjust your content to match the needs, interests, and motivations of each audience type.
8. Ignoring Lifetime Value (LTV): Lifetime Value is a critical metric in segmentation, helping you determine which customers to invest in and nurture. High LTV customers deserve special attention and more frequent touch-points to ensure they continue to choose your brand. Neglecting this metric can leave money on the table and lead to churn.
9. Over-Reliance on Discounts: Discounts can be a quick win, but relying on them too often can train your audience to expect markdowns, eroding your profit margins. Instead, focus on other ways to add value, such as early access to collections, special offers, or value-based content that showcases your product benefits.
10. Not Testing and Evaluating Segments: To know if your segments are working, you have to test. Sending a batch email to a 90-day engaged list may drive some results, but it’s likely missing the mark in several ways. When you test, you learn which segments respond to which types of content, and you can better optimize your strategy.

Wrapping Up: The Importance of Segmentation in Email Marketing

Segmentation transforms your messaging strategy from “one-size-fits-all” to something much more refined and effective. The more you invest in understanding your audience, the better you can serve their needs and keep them engaged with your brand. Whether you’re new to segmentation or looking to refine your strategy, it’s an essential tool for driving growth, loyalty, and overall retention in eCommerce.

Start small, optimize continuously, and let your data be your guide. When done right, segmentation can turn a good email marketing strategy into an outstanding one, creating loyal customers who not only engage with your brand but also eagerly look forward to what you have to offer next.

🔥 DTC Win of The Week

Last month was up and to the right for CatBox! Co-Founder, Alex Brittingham shares their killer stats and big wins—we love to see it.

Alex Brittingham @Brittingham1

October was by far our best month yet for CatBox! 😍

✅ Previous revenue record: $18k
✅ Previous order record: 645
✅ 825 > 1,170 subscribers
✅ $16.5k MRR > $26k MRR
✅ ~100 new 5 star reviews

Absolutely insane 🥹

7:09 PM • Nov 1, 2024

15 Likes   0 Retweets  

2 Replies

🗞️ Quick Clips

• Brand Market vs Growth Market: Sarah Levinger & Nate Lagos did the digging so you don’t have to. Get their guide for brand building in Sarah’s latest episode of Brain Driven Brands.
• Rivian x Terra Kaffe x Mile High Run Club Coffee Run: It’s a mouthful, we know! But if you're in New York and up for a morning boost, come join this guided run and kick-start your day right.
• Word on the street: Shopify analytics is getting an upgrade?

🔍 The Hiring Vault

We’re rolling out a job board, dedicated to eCom marketing gigs you actually want to know about. Whether you’re job hunting or just keeping tabs on what’s out there, this is your insider scoop. Plus, if you know someone looking to make a move, give ‘em the nudge they need. Because let’s be honest, great opportunities deserve to be shared. 😉

• Creative Strategist (Remote): TheKiddoSpace
• Marketing Manager (Remote): Jacuzzi Group
• Director of Retail Marketing (Remote): Liquid Death
• Category Marketing Director (Remote): Hims
• Sr. Manager, Social Media (Remote): Claires
• SEO & Content Marketing Manager (Remote) : Northpeak Agency
• Part Time Content Strategist, Copywriter (Remote): Kody Nordquist
• VP of Acquisition (Los Angeles, CA): Ruggable
• Sr. Growth Marketing Manager (Marina Del Rey, CA): Dr. Squatch
• Retention Marketing Specialist (Los Angeles, CA): Fashion Nova
• Digital Marketing Specialist (Beaverton, OR): Nike
• DTC Email & Retention Strategist (Seattle, WA): Outdoor Research
• Email Marketing & CRM Specialist (Addison, TX): Colleen Rothschild Beauty
• eCommerce Coordinator (Hybrid/New York): Rasha Beauty
• Social Media Strategist (Hybrid/New York): Nestig
• Influencer Marketing Manager (Remote): BRĒZ

That’s a wrap for this week’s edition! It’s a new month—the biggest month for you all. So go out there and crush it.

Thanks for hanging out with Chase and me. If you found this newsletter informative or just fun, share ecomemailmarketer.com with your favorite DTC marketer. Get them to subscribe so they don’t miss out on next week’s rundown.

Remember: Do shit you love.

🤘 Jimmy Kim

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