Email Segmentation 101: Everything You Need To Know To Deliver Personalized Experience

Email Segmentation 101: Everything You Need To Know To Deliver Personalized Experience
28 September, 2023 • ... • 411 views
Elena Batova
by Elena Batova

Any day is good for learning about email marketing segmentation, but today is the day when Selzy releases an in-depth guide that covers everything you need to know.

We’ll explain what information about your subscribers you need, how to collect it while respecting privacy, how to adapt your content production flow to create personalized content on a budget, and we’ll give you as many tips as one article can hold.

What is email marketing segmentation?

Email marketing segmentation is the practice of dividing your email list into groups based on shared characteristics.

If you just start building your email list, these characteristics can be as straightforward as age group and location.

As you acquire more subscribers and collect data from sales, you can opt for deeper segmentation. For example, you can check when people open your emails, see which content they interact with, and observe how discounts affect their choices.

By learning your clients’ preferences, tracking their behavior over time, and finding patterns, you can segment your email list even more effectively and step up your marketing game.

How segmentation benefits personalization and key email marketing metrics

Email list segmentation opens the door to data-driven personalization. Personalized content is what brings in benefits like higher open rates, improved click-through rates, higher conversion rates, and better customer retention.

Marketers are so obsessed with personalization that the majority of recent studies are focusing exclusively on it rather than on the role of segmentation.

However, the same studies make it evident that personalization attempted without high-quality insights only disappoints the customers. In fact, according to a 2023 report from Optimizely, 70% of consumers feel frustrated that the promotions they receive are not directly relevant to their personal interests. Another 2023 report, this time from Statista, revealed that in 2022, 62% of the surveyed from various countries claimed that a brand would lose their loyalty if it delivered a non-personalized experience. Remarkably, in 2021, the share stood at 45%.

At the same time, research shows that customers are increasingly willing to share all types of information with brands in exchange for personalized interactions and exclusive incentives. 

So, if you are among those 83% of marketers who admit that their current personalization efforts heavily rely on assumptions about customers, there is no better time than now to step up your game with segmentation.

Let’s look closer at what you can do with collected customer data to create genuinely personalized content and improve key email marketing metrics.

Segmentation and open rates

Using segmentation data can boost your email open rates. The key is to make your emails feel more valuable at a glance.

To grab subscribers’ attention and spark curiosity, include triggers into subject lines and snippets. For example, remind them to complete the purchase or mention the products they’ve liked before. 

Personalize deals for different groups and address these groups right away. This will help subscribers feel like you are talking to them specifically. Consider taking a step further and including their name.

Segmentation data can help determine when it is best to send emails. Divide your email list based on their location and send your campaigns and communication at the activity peaks for maximum engagement.

These strategies together make it more likely that subscribers will open your emails and see what’s inside.

Segmentation and click-through rates

Email segmentation can improve click-through rates. When recipients feel that the content is relevant and valuable to them, they are more likely to click through and engage further with your email content.

One way to achieve this is through the implementation of dynamic content.

Dynamic content refers to content that changes and adapts based on user interactions, preferences, or other data-driven factors. Common examples are location-specific store sales and events, currency-based discounts, and subscriber-specific recommendations.

In a side-by-side comparison, two email sections are shown, one for Canadian customers and one for US customers of Sephora. The Canadian version displays an extra banner with a special offer.
Sephora uses a uniform template to send the Progress Check email to their customers in Canada and the US. However, they offer a discount in exchange for signing up for text updates only to the Canadian audience. Source: Deal Town
In a side-by-side comparison, two recommendation sections are shown, one for Canadian customers and one for US customers of Sephora
The recommendations section also highlights different sets of products for each location. The US set serves as a good illustration of the idea that dynamic content should be carefully tested, as the set is clearly missing one position. The Source: Deal Town

Other practices that support higher click-through rates are crafting engaging CTAs and incorporating interactive elements.

Segmentation and conversion rates

Building upon higher click-through rates, segment-based content shows a higher conversion rate.

In this context, successful conversion doesn’t necessarily mean an immediate monetary profit but rather a desired action. This desired action can be anything from participating in a survey to signing up for a webinar or downloading a free resource.

When you tailor email content to a specific audience, you minimize the risk of overwhelming subscribers with information that doesn’t apply to them. At the same time, you increase the likelihood that the subscribers will take the desired action.

With segmentation data at hand, you can take a step further and set up automated nurturing sequences for different groups. By delivering a series of targeted emails over time, you can guide subscribers through the customer journey and gradually move them towards conversion.

Segmentation and customer retention

As we mentioned earlier, after implementing segmentation, you are likely to experience better customer retention.

Segment-specific offers and promotions make customers feel like valued insiders. Providing exclusive deals based on their preferences or past interactions strengthens their loyalty to your brand and discourages them from seeking alternatives.

Once you identify dormant or inactive customers, you can create reactivation campaigns. Encourage them to become active again by addressing their reasons for disengagement, if possible. Maybe they stopped buying because their favorite products were discontinued. In this case, it’s a good idea to educate them about similar products and offer a small discount to make the appeal of trying something new stronger.

Types of email segmentation

Before we go into the details of how to implement segmentation, let’s discuss the types of email list segmentation and the criteria for forming the groups.

In the B2C and D2C models, there are three main types of email segmentation: demographic, behavioral, and psychographic.

Demographic segmentation answers the question of who your subscriber is and where they live.

Behavioral segmentation is tied to how they interact with your products and services.

Psychographic segmentation is focused on why the subscriber might be interested in your product, what drives their purchase decision, and what values they have.

In the B2B model, the demographic segmentation is complemented by firmographic segmentation, where the focus shifts to the shared characteristics of companies representing buyers.

In this article, we’ll discuss the most common criteria for segmenting email lists: demographics, purchase history, website activity, website activity, email engagement, and content preferences.

Demographics

Demographic segmentation involves dividing your email list based on demographic factors.

Age, gender, and location are most commonly used as the starting segmentation criteria since these data are the easiest to get. Thank you, Google!

But there are other important factors to consider, like education, income, occupation, and even more granular attributes like generation, culture and religion, marital status, household type, and life stage.

A Gen Z with a multicultural background living with a roommate in New York will likely constitute a different segment from a married millennial or Gen X living in a rented house in Denver. A boomer who is a house owner in Austin might also constitute their own segment.

Since the specific attributes often interact and influence each other, the most effective segmentation strategies consider multiple demographic factors together.

Purchase history

Purchase history is one of the major criteria in behavioral segmentation. The audience gets divided based on their past buying behaviors and interactions with your products or services.

Again, segments can be as general or as specific as you need.

Repeat customers

First-time buyers

vs. Customers who made purchases in the last three months following the link from the email

Customers who shop once a year around spring holidays

Customers who buy only discounted products

Loyalty program members who buy anything that comes out in a specific product category

Customers who made their first purchase through a referral link

The information you want to look at to create such segments includes recency of purchase, average amount spent, buying full-price or on discounts, buying only specific products or trying different ones each time, seasonality, participation in loyalty programs, and so on.

The collection of these data often requires a robust customer relationship management (CRM) system or an advanced e-commerce platform that can track customer behaviors and interactions, but it’s possible to start off with just a spreadsheet.

Website activity

Website activity is another major criterion in behavioral segmentation. This time, you divide your subscribers into groups based on how they interact with your website.

If a subscriber clicks on a specific product, views it several times, adds it to their cart, or searches for related content in your blog or FAQ section, you can use this information to create tailored email campaigns. However, to capture and use these data in segmentation, you need to integrate your email marketing platform with your website analytics.

The most common use of website activity data is to identify subscribers who abandoned their shopping carts and then send them an email with a reminder or an incentive to complete the purchase.

This tactic is highly effective: in 2022, automated cart abandonment emails demonstrated a click-to-conversion rate of 44.4%. It means that nearly half of the customers who clicked on the links from these emails returned to the websites and bought the things they left in the cart. Only welcome emails achieved a higher click-to-conversion rate, scoring at 56.8%.

Email engagement

Email engagement as a criterion for segmentation is similar to website activity. You divide your email list into different groups based on how subscribers have interacted with your previous email campaigns, including opening, clicking, sharing, and replying.

For example, you might want to separate people who take part in your surveys from those who receive them but never do. The former group will likely be interested to later learn about the results. This is also a good opportunity to thank them with something valuable, like a discount, a coupon, or a piece of relevant information, for example, exclusive insights into how you’re addressing their suggestions.

Make sure you purge your email list from time to time from the people that don’t engage to save money on the upkeep costs and have a realistic understanding of how big your email list really is.

Effective email engagement segmentation requires tracking and analyzing subscriber behaviors over time. But some actions can provide immediate segmentation criteria, like joining your email list, for example. Tracking the dates when people join your email list is also a nice thing since you can later celebrate their anniversaries with special offers.

Content preferences

Content preferences are a criterion in psychographic segmentation. You divide your email list into groups based on the specific interests and preferences that subscribers have expressed.

Such segmentation could be through explicit actions like opting into particular content during the signup process or implicit actions like browsing product pages on your website, checking out tutorials, or clicking on the specific links in your emails.

If you host events, webinars, or workshops, segment your list based on the events subscribers have attended or shown interest in.

Did you know Selzy hosts free webinars for email marketers and business owners?

Sign up for our newsletter and never miss them out!

However, the best part about interest-based segmentation is that you can just ask your subscribers about what they want or what they want more of. This is a very popular strategy for businesses that are heavily relying on content marketing.

How to implement email marketing segmentation

Now that you’ve learned what email list segmentation is, how you can improve your key email marketing metrics with it, and what criteria you can apply, you might wonder where to start with the implementation.

While specifics might differ depending on your niche and where you are in your business journey, there are steps common for every business.

Compliance with regulations

Step zero is compliance with regulations. Since you need to collect and handle personal data, make some time to familiarize yourself with GDPR and the CAN-SPAM Act.

In a nutshell, both documents advocate for transparency and privacy. Make sure to inform your subscribers about the data you’re collecting and how you intend to use it. You should also obtain consent before sending marketing emails and provide clear options for updating their preferences or opting out.

Chicken and egg dilemma — what to do first? Collect the data, see what information is available to you, and then decide on the segments? OR define the criteria first and then decide on the data to collect. There is no right or wrong here. You can do both approaches depending on a specific marketing goal.

Collecting customer data

If you decide to collect customer data first and then proceed with segmentation, you need to figure out a way to obtain the specific data that works best for your marketing goals.

Sign-up forms

When subscribers sign up for your emails, use a sign-up form that includes fields for relevant information. It could be basic details like name and email address, and more specific information, such as location, gender, or interests.

B2C and D2C brands tend to use simpler sign-up forms to minimize the friction for potential subscribers and avoid coming across as too nosey.

Email newsletter sign-up form that asks only for an email address and first name
Source: Pinterest

Some brands even choose not to rush things: they don’t ask anything apart from the email and offer an incentive for coming on board. It’s likely that they will have additional email campaigns planned later on.

Sign-up form that offers 15% off and free shipping for signing up for the newsletter
Source: Pinterest

In B2B, on the contrary, longer sign-up forms with multiple fields are common. Sign-up forms often appear on pages with valuable content, such as white papers or ebooks, to motivate visitors to take time and answer all the questions. That’s especially the case when visitors have to register first to start receiving newsletters.

Statista’s private user sign-up form asks for a full name, gender, and personal email address. Private users can view statistics as graphics and save favorites.
Statista's academic user sign-up requires an academic email address, along with position and phone number. Unlike private users, they have access to advanced search filters and can save statistics as XLSX.
Statista's business user sign-up form requires a work email address and additional details like phone number, company name, job title, and industry. Business users enjoy full access to advanced features, similar to academic users.

Statista is offering more functionality to the users who are willing to provide more information about themselves and how they are intending to use the service.

Preference сenters

Create preference centers where subscribers can manage their preferences. It will allow them to choose the type of content they want to receive, the frequency of emails, and other customization options.

Ideally, users should be able to access their preferences from each email you send.

Email footer featuring a link labeled “Manage newsletter preferences”
Source: Statista
The ”Manage newsletter preferences” page opens upon clicking the link in the email. Users can select specific newsletters they would like to receive and even choose the language for some of them.
Source: Statista

However, if you don’t have the resources to build a dedicated preference center, there is a workaround — add these settings to your Unsubscribe page. In fact, it’s a common strategy to make a final attempt to persuade the subscribers to stay on the list.

Email Monks allow users who decide to unsubscribe from their communications to change the frequency of emails and type of content instead of leaving for good
Source: Email Monks on Pinterest

Surveys and feedback

Send out surveys to your subscribers to learn more about their experiences with your products and services, to find out what expectations they might have, and to learn something that would help you connect with them or meet their needs. The results can provide valuable insights for creating targeted content or reshaping your future marketing campaigns.

Email marketing platforms

Monitor how subscribers engage with your emails. Track open rates, click-through rates, and which links they click on. 

In addition, email campaigns provide excellent opportunities for collecting user data with their consent. For example, you can ask subscribers about their birthdays in exchange for a small gift or a discount during their birthday month.

Ann Taylor offers a secret gift to the subscribers who disclose their birthdays. The CTA button reads: “Sign up for my gift”
Source: Pinterest

Website analytics

Tools like Google Analytics provide insights into website traffic, user behavior, and demographics. It can help you understand where your visitors come from and what they do on your site. It’s possible to integrate them with your email service provider.

E-commerce platforms

If you’re an e-commerce business, track customer orders, browsing behavior, order history, and product preferences.

Customer Relationship Management (CRM) systems

If you’re using a CRM system, integrate it with your email marketing platform. CRMs often catalog a wide range of data useful for segmentation: demographics, purchase history, behavioral insights, lifecycle stage and lead scoring data, and so much more.

Bear in mind that segmentation is a process that requires an iterative approach. You might not be able to define and implement your segments overnight. That’s why progressive profiling might be a good solution. Gradually collect more data from subscribers over time through subsequent interactions and make sure that the previously collected data is still up to date.

If you don’t know where to start with the tools for collecting and managing customer data, that’s okay. We selected the best B2B email marketing software to make things easier for you. Check it out!

Creating customer segments

Now, you might be wondering about the technical aspects of creating customer segments. The good news is that you don’t need to manually send emails to each group of subscribers.

In 2023, the process can be fully automated, and once set up, it can run for as long as you need it.

Selzy has a simple three-step workflow where you can set criteria for segmentation and even save your choice for the next campaign.

Let’s imagine you are planning a sale similar to the one you ran earlier this year and want to target active US customers who clicked on the links from the emails sent during that campaign. Easy!

The “create a segment” flow in Selzy. The chosen conditions: “country is equal to the US,” “date of the last click by link within the range July 7th, 2023 to July 14th, 2023,” and “email status is equal to active”

And that’s just one example. There are dozens of criteria for you to choose from, and create segments as big or as small as you need them to be.

Start with basic segments and slowly deepen your segmentation. The most important thing is not to get overwhelmed by the myriad of criteria. Don’t overlook the specifics of your business. You might be dealing with a small segment from the beginning, because you have a niche product. In that case, it’s best to focus on the customer journey.

Creating targeted content

To systematically create content for different audiences, you need to set up the content production flow. It can be expensive and time-consuming, but there are a few shortcuts that we are happy to share with you:

  • Start with alternating only subject lines and slowly build up other personalized content.
  • Create uniform templates, ready to be filled up with different products and dynamic content.
  • Focus on the content that you can produce once and then use it as many times as you need.

Check out our articles on drip campaigns and wholesale email templates for inspiration.

  • Make the most of the content that you already have by making minor changes and resharing it with the new or even the same audience.
  • Choose the segment that brings you the most profit and tailor content to their needs first.
  • Integrate user-generated content in your email campaigns by inviting subscribers to share their experiences and later featuring their stories.
  • Collaborate with partners or complementary businesses to create co-branded content to split production costs.
  • Consider integrating AI into your content production flow. You might be surprised by the way it can help you with brainstorming ideas, generating images, and tweaking subject lines.

Remember that effective content doesn’t always require a large budget. Prioritize quality, relevance, and consistency to make the most of your content creation efforts while reducing costs.

Testing and measuring results

Effective segmentation comes only with testing and measuring results.

This is where A/B testing can come in handy. Experiment with different subject lines, email formats, and CTAs to see what resonates best with each group.

Many large brands tend to avoid experimenting with email content in their primary markets and, instead, opt for testing in regional markets. However, even if you don’t operate in multiple markets (at least not yet 😉), segmentation can help you test hypotheses without significantly affecting revenue. This is particularly important for e-commerce businesses.

As your subscribers’ preferences and behaviors change, your segmentation strategy should evolve accordingly to remain relevant and continue to bring positive results.

Examples of segmentation-based emails for business of any size

Most brands have a shared vision of what the segmentation-based content should look like. The same email types can be seen throughout multiple email campaigns performed both by big brands and small businesses.

While it all comes down to your creativity and budget size, this basic set trusted by many is a safe choice, especially on the early start. That’s why we’ve picked popular email formats that brands commonly use alongside segmentation.

Location-based campaigns

The best thing about segmentation, based on location, is that your segments can be as big or as small as you need them to be.

Yelp often combines both larger and more granular segments in their email campaigns, leveraging the data they have on where their community members live.

For example, a whole city can be a segment:

Summertime email from Yelp provides subscribers from Chicago with links to the lists of local ice cream shops, nearby swimming pools, and trustworthy HVAC tech people
The targeted segment: Yelp community members from Chicago. Source: Really Good Emails

Or only a part of it:

The Local Yelp newsletter shares with subscribers a collection of Manhattan spots serving up wings and other game day faves
The targeted segment: Yelp community members who live or prefer to go out in Manhattan. Source: MailCharts

For some campaigns, Yelp chooses to target a wider audience, like for this email about growing plants indoors.

Yelp shares a collection of spots to buy indoor and garden plants, tips on making one’s household more sustainable through proper maintenance, and a blog article on top plant nurseries in North America
The targeted segment: Yelp community members from North America. Source: Really Good Emails

While for others, they provide a highly personalized experience through the use of dynamic content:

An email from Yelp contains personalized updates from the subscriber's favorite local spots. The choice of spots is based on the subscriber's previous searches for dining options in a specific area or requests for directions to them. The subscriber is free to unfollow each place.
Source: Really Good Emails

For emails like the one above, Yelp leverages several segmentation criteria at once: location, website and/or app activity, and the member’s preferences. 

To keep providing a personalized experience, Yelp makes sure to remind members to update their preferences, offers to follow more neighborhoods and always leaves them an option to manage their communication settings.

Yelp invites subscribers to follow other San Francisco areas in the footer and provides a link to update their preferences
Source: Really Good Emails
A different Yelp footer with a link to manage notification settings
Source: Really Good Emails

Location might not seem much to work with when you are a small business operating either in one city or one state. However, there is still a potential for connecting with different audiences and catering to your most valuable customers.

While we don’t know whether Sky Frame actually segments their email list, they definitely make the most of being a New York-based business and leveraging other demographic and behavioral data they might have on their customers.

Three emails from Sky Frame: one offers delivery to the Hamptons, another celebrates Rosh Hashanah, and the third honors the heroes of 9/11
Source: Milled

You can follow their lead and launch an additional email campaign for a holiday or a local festival widely celebrated in your area. That kind of information is usually publicly available, and after the campaign, you will learn what part of your email list was particularly active during it. For example, if you have a large part of your email list based in California, add Cinco de Mayo to your email marketing calendar.

Loyalty program and membership levels

Sephora has a three-tier loyalty program called Beauty Insider. The basic tier, Insider, is available for everyone who signs up. Customers who spend $350/year are eligible for the VIB tier, and the ones who spend $1,000/year are assigned to Rouge.

While it might seem quite an effort to manage content production for at least four groups of customers non-members, Insider, VIB, and Rouge — Sephora uses some of the techniques we mentioned earlier in the article.

For example, they reuse email templates and focus on the subject lines. The primary value comes not from the unique content but from the timing of these emails. Insiders got their email with a selection of mini products six hours earlier than everyone else.

In a side-by-side comparison, two emails from Sephora are shown promoting pocket-size beauty products to ordinary customers and members of the loyalty program
Two emails with identical content but different subject lines indicating that one is for those who are a part of their loyalty program beauty insider and the other is not. The targeted segments: customers who didn’t join the loyalty program AND everyone who joined the program, regardless of how much they spend a year on Sephora products. Source: Milled

As a part of the loyalty program’s benefits, Sephora hosts special events. They can be aimed at members of every tier or be more exclusive. For example, the event below is meant only for VIB and Rouge members.

An email invitation to Sephora’s private shopping event where VIB Rouge members and their +1 can get first access to holiday products
The targeted segment: customers who are part of the loyalty program and spend at least $350 a year on Sephora products. Source: Reddit

Sephora takes into account that not all high-value customers might be able to attend these events, so they segment out those who didn’t show up and follow them up with an email offering a discount for a limited time. The one below is for a different event, but it can still give you an idea.

Sephora follows up with a VIB member who didn’t attend the event and offers 20% off on their in-store and online purchases during the upcoming weekend
The targeted segment: customers who spend between $350 and $1,000 a year on Sephora products and got the invitation to the exclusive event but didn’t attend. Source: Reddit

This set of emails is not by any means exhaustive, but we hope you can draw some inspiration for the loyalty program that would fit your business regardless of its size.

Abandoned cart / Recommendations / Now on sale / Back in stock

A good abandoned cart email can bring back the money that otherwise would be lost. The truth is that people get distracted and forget to complete the purchase, so there is no harm in reminding them.

Beardbrand sends an email reminder to reclaim the shopping cart’s contents before it expires
The targeted segment: customers who put Tea Tree Utility Balm into their carts but didn’t complete the purchase. Source: Really Good Emails

Many brands take a step further and add recommendations along with the goods left behind.

The example of Drop is particularly interesting since the email combines multiple marketing techniques. The brand sells multiple products, not just mechanical keyboards and accessories, but they make sure that their recommendations directly relate to the item that customers showed their interest in.

Drop creates a sense of urgency by highlighting that the item will remain available only for another 19 days, pushing customers to make up their minds.

Finally, they mention how many recommended items they sold, which may further deepen customers’ trust in Drop’s products.

An email from Massdrop reminding the customer to complete the purchase and inviting them to check out similar products
The targeted segment: customers who added a custom keycap set to their carts but didn’t complete the purchase. Source: Really Good Emails

Retail brands often allow their customers to add items they like to their favorites and set up a notification for when these items go on sale or are being restocked.

Columbia is a good example. They created a universal template and populated it with dynamic content depending on what item customers added to their favorites. They make sure the recommendations are relevant, likely employing AI to make a pick and lure out customers to the website by not immediately revealing the discounted price on the desired item but at the same time showing the range of discounts on similar products in recommendations.

Sale announcement from Columbia featuring the item the customer showed interest in and the button to reveal the new price. The email also contains recommendations for similar discounted items.
The targeted segment: customers who added the Silver Ridge shirt to favorites. Source: Really Good Emails

Similar to the one above, the final type of abandoned cart email that we cover today is “back in stock.” Kirkland’s Home notifies customers that the item they were interested in at some point is back and offers an additional 15% off, and not just on the said item but any other of their products. This might indeed help them close more deals than simply reminding customers of the item they searched for.

An email notification from Kirkland’s Home contains an item that is back in stock and a promo code with a site-wide discount on a single item
The targeted segment: customers who added the vase to their cart but didn’t get the chance to buy it before it went out of stock OR customers who added the vase to their favorites and subscribed for restock updates. Source: Milled

The best part is you don’t necessarily have to build favorites or back-in-stock functionality into your own website and can just utilize what larger e-commerce platforms and marketplaces have to offer.

Wrapping up

There you have it a comprehensive beginner- and small business-friendly guide on email marketing segmentation. Even if you are not starting to segment your email list today, at least you’ve learned something useful today. 🙂

While we did our best to cover all the basics, segmentation is a big topic, and we hope to explore it further in the upcoming months to provide you with even more use cases — all to help your business thrive. So, if you don’t want to miss out on all the goodness, subscribe to our digest, and we will serve you the future article right into your inbox.

Article by
Elena Batova
Elena is a UX and Content Writer, with a background in SaaS and video game localization. She advocates for bringing value to users and readers, implementing DEI best practices, and creating safe spaces for teams and professionals to share their experiences. She writes in both English and Russian. A cat lover, foodie, and adventurer.
Visit Elena's

Latest Articles

Selzy Selzy Selzy Selzy