Email List Segmentation

What is email segmentation?

A segment is a portion of a database that has similar characteristics. Those characteristics are used to market in a relevant manner. Segmenting is vital to ensure that you are getting appropriate information to the appropriate audience.

In traditional marketing segmentation can be difficult and expensive. Most marketers resort to mailing to "segments" defined as people who subscribe to a certain trade magazine or who have ordered from a particular catalog. Most traditional marketers don't even try to segment their "house" lists because it is inefficient to mail in small quantities. However, if someone is receiving mail from you that is inappropriate or not relevant to their connection with your business then you run the very real risk of fatigue and disinterest. You do not want this. Segmenting your list gives you the direct connection to that audience with the information most relevant to them and makes a lot more sense when the delivery vehicle is email.

For small businesses it may still be difficult because you need to spend time analyzing your database and your customers' behavior. This takes time and thus costs money. It is however, a vital piece of the email marketing puzzle.

It has been found that open rates in email campaigns are higher when the list is smaller. In a study done by Morgan Stewart, Director of Strategic Services from ExactTarget, list size was an incredible predictor of both open and click-through response rates. Open and click-through rates were approximately 2.5 times higher for emails sent to fewer than 100 subscribers than for emails sent to 10,000 subscribers or more. *

Consider the following before sending your next email to your list.

1. Which subscribers should receive this message? Identify at least one group that should not receive this message. If you can't, you probably are not protecting your subscribers from irrelevant messages.
2. What information can we leverage to increase the relevance of this message? If you have collected information on the subscriber interests, make sure it's leveraged to drive dynamic content. Use demographic data to determine the right products, message, and offers to deliver.

* Source: Email Marketing by the Numbers by Chris Baggott.

The Email Open Rate Metric

The open rate for emails is the most cited metric in email marketing. It is becoming, however, a hotly discussed metric. The discussion mainly falls on the definition of the open rate, as well as the ability to confirm the validity of the open rate however it is defined.

While definitions vary slightly, the definition most cited and accepted is the number of individuals who open an e-mail divided by the net number of emails delivered after all the bounces are subtracted.

This seems simple enough, except that we also need to define when an email is opened. An "open" is impossible to track in a text only email. An open is tracked in an html email when the receiving computer calls for a graphic that is within the e-mail. As Internet service providers, corporate IT departments, and email client applications increasingly block images by default, some mail is getting opened and is not being registered as an open.

Further, email client applications are changing rapidly. Many applications have a preview pane to view an email. This preview pane can collect the images, thus register that email as an open, even if the end user is simply scrolling through his list of emails. That is to say, the receiver may have looked at the email or he may have scrolled right over the email without a pause. Also, with more people carrying Blackberrys, iPhones, and other personal digital assistants, the accuracy of the open definition is even more in question.

The discussion then becomes, is this open rate metric a valid tool. I believe it is. While not 100 percent accurate, it does give valuable insight into the effect of the email campaign. In the text- only days it was extremely difficult to gauge email marketing effectiveness. Using this metric with other statistical analysis (web traffic statistics, landing page statistics, click through rates) will continue to give meaningful information to your email marketing team.