Top 8 Strategies to Segment Your Email List (Klaviyo-Friendly Guide)

8 Best Ways To Segment Your Email List

Email segmentation is a crucial component of effective email marketing, yet many companies either underutilize it or go to the extreme. On one hand, some businesses blast their entire email list without considering engagement history or customer preferences, resulting in a poor user experience. On the other hand, some become overly obsessed with segmentation, applying intricate methods like RFM (Recency, Frequency, Monetary) analysis even with a relatively small list of 5,000 subscribers. To bring clarity to this topic, my team and I, having sent over 500 million marketing emails for e-commerce clients in the US and UK, have observed firsthand where segmentation excels and where it can fall short. In this post, I’ll share the eight best strategies for segmenting your email list, when to use each method, and how to craft the right message for your subscribers.

Why Segmentation is So Important

You only need 1,000 true fans to make your business thrive.” This quote highlights an essential truth in email marketing: having more subscribers isn’t always the key to success. With platforms like Gmail, Yahoo, and Hotmail enforcing strict spam regulations, sending targeted messages to the right people at the right time is crucial.

Even with just 1,000 engaged subscribers, you can achieve impressive results compared to sending tens of thousands of untargeted emails. Many companies still resort to buying cold email lists or swapping lists with similar brands, but these practices often fail and can even be illegal in many countries. Effective segmentation, therefore, isn’t just about creating different lists but about using your email software to set conditions, track engagement, and utilize data from your e-commerce platform and other integrated tools to send relevant and personalized messages.

Engagement-Based Segmentation

Engagement-based segmentation is a widely used strategy in email marketing. This method involves setting criteria in your email software to segment your list based on recent interactions. For example, you might create segments for people who have clicked or opened an email in the last 30 days (an “engaged 30” segment) or the last 90 days (an “engaged 90” segment).

While this approach is effective, it’s important to note its limitations. Engagement-based segmentation focuses on the most recent interactions rather than the frequency of engagement. This means that someone who hasn’t opened an email for 30 days might be on vacation, while another person who opened an email yesterday might not be a regular reader.

Despite these imperfections, engagement-based segmentation is an industry standard and works particularly well for smaller brands with 5,000 to 100,000 subscribers. It remains a reliable method for ensuring that your emails are reaching an engaged audience, making it a valuable tool for many e-commerce brands.

Purchase History-Based Segmentation

Purchase history-based segmentation is a more advanced approach that goes beyond email engagement and focuses on customers’ buying behaviors. Instead of just tracking how often someone interacts with your emails, this method analyzes past purchase patterns to predict future buying tendencies.

For example, if a customer buys Product A, you can use tools like Triple Whale to identify the most common products they purchase next—whether it’s Product B, C, or D. By recognizing these patterns, you can create segments of customers who have purchased specific items but not others.

With these segments, you can tailor your email campaigns to promote the products they are most likely to buy next. This approach is especially effective for encouraging repeat purchases and shortening the time between first and second purchases. While it’s a powerful tool, it’s best used in conjunction with other segmentation methods, such as engagement-based segmentation, to create a comprehensive strategy for your sales campaigns.

Location-Based Segmentation

Location-based segmentation is a straightforward but highly effective method for targeting your audience based on their geographical location. This approach is particularly useful for businesses with a physical presence or specific regional operations.

For instance, if you run a brick-and-mortar store, you can segment your email list by zip codes or cities where you operate. This allows you to target customers within a certain radius, such as a 50-kilometer area around your location.

Location-based segmentation is also essential for compliance with regulations like GDPR, which may require you to tailor your communications based on geographic regions. You can use this method to send emails only to subscribers in specific countries or groups of countries, such as the European Union.

Another practical use of location-based segmentation is for managing shipping logistics. If you have varying shipping times or costs for different regions, you can customize your emails accordingly. For example, you might need to send different messages to customers in the UK versus those in Germany.

Finally, location-based segmentation is crucial for timely and relevant marketing. For example, if you want to celebrate a local holiday like Independence Day in the US, you would target American subscribers without annoying customers from other regions. This method ensures that your campaigns are both relevant and respectful, enhancing the overall effectiveness of your email marketing strategy.

Seasonal Buyers Segmentation

Seasonal buyers segmentation focuses on identifying customers who make purchases during specific times of the year, such as holidays or seasonal changes. This method is particularly effective for businesses that sell products associated with certain events or seasons.

For example, if your business sells items for Father’s Day, Mother’s Day, Valentine’s Day, or major sales events like Black Friday and Christmas, you can segment your list to target customers who have made purchases during these times. Similarly, if you sell seasonal products like sunscreen, you would focus on customers who buy in the summer rather than winter.

By identifying these seasonal shoppers, you can tailor your email campaigns to offer timely promotions and incentives. For instance, if someone buys from you during Black Friday, you can send them targeted offers leading up to the next Black Friday. If they only shop during Christmas, you can ensure they receive special offers before the holiday season.

This segmentation helps you maximize sales by focusing on customers who are most likely to respond to seasonal promotions, even if they don’t engage with your emails year-round. By targeting these specific groups with relevant offers, you enhance the effectiveness of your campaigns and encourage repeat business during key times of the year.

RFM Segmentation

RFM segmentation, which stands for Recency, Frequency, and Monetary value, is an advanced technique for analyzing and targeting your customers. This method is best suited for businesses with larger email lists, typically over 5,000 subscribers, and especially for those selling high-value items.

Recency measures how recently a customer has made a purchase. Frequency tracks how often they make purchases, and Monetary value looks at how much they spend. By evaluating these three dimensions, you can categorize your customers into segments with detailed profiles.

For example, a customer who recently purchased frequently and spent a lot would be rated as a high-value customer (555). Conversely, a customer who made a purchase a long time ago, rarely buys, and spends little would be rated as low value (111). This rating system helps you create highly specific segments, such as your best customers or those at risk of churning.

RFM segmentation allows you to craft tailored campaigns for different segments, making your marketing efforts more effective. However, this method requires significant effort and is more complex than basic segmentation techniques. It involves creating multiple campaigns and creative strategies for various segments, which might be overwhelming for smaller or medium-sized businesses. For these businesses, simpler methods like engagement-based or purchase history-based segmentation might be more practical and manageable.

Gender-Based Segmentation

Gender-based segmentation is a straightforward yet powerful technique for personalizing your email campaigns. Traditionally, businesses would ask subscribers for their gender through sign-up forms or pop-ups. This approach is common among fashion brands, which use the data to tailor their content specifically for men or women.

However, with advancements in artificial intelligence, this process has become much simpler and more accurate. AI can now predict a subscriber’s gender based on their name or email address with a high degree of precision—usually with an accuracy rate of 99.8%. This method avoids the friction of asking subscribers for additional information, which can lower sign-up rates.

In platforms like Klaviyo, this feature is known as predictive gender. While using AI to determine gender is efficient, it’s important to remember that it’s not infallible. AI predictions are based on data patterns, which means there’s always a small margin for error. Additionally, in industries like fashion, where purchases might be made as gifts, it’s crucial to consider that some subscribers might be buying for others rather than themselves.

Thus, while gender-based segmentation can enhance your marketing efforts, it’s advisable not to overly rely on it. Avoid creating overly gender-specific content that may not always align with your audience’s actual preferences or purchasing behavior. Instead, use gender segmentation as one of several tools to refine your email marketing strategy.

Lifetime Value-Based Segmentation

Lifetime value (LTV) segmentation is an advanced method for targeting your email list based on the total value a customer is expected to bring over their entire relationship with your brand. In platforms like Klaviyo, LTV can be divided into three key components:

Historic Lifetime Value: How much a customer has already spent.
Future Lifetime Value: The estimated future spending of a customer.
Total Lifetime Value: The sum of both historic and projected spending.

Using LTV-based segmentation, you can create segments such as “VIP Customers” who have spent a minimum of $500, or even “High Rollers” who are expected to spend $2,000 or more. This allows you to tailor your campaigns specifically for these valuable groups.

For instance, during peak shopping seasons like Black Friday or Christmas, you can offer exclusive discounts or bonuses to high-value customers, acknowledging their loyalty and encouraging further spending. This strategy helps prioritize your best customers and can be more effective than broad, non-targeted promotions.

While LTV-based segmentation leverages AI to predict customer behavior, it’s essential to combine this approach with other segmentation methods. Relying solely on LTV data might not capture the full picture of customer engagement and behavior. Thus, integrating LTV with engagement and purchase history insights can provide a more comprehensive and effective email marketing strategy.

Provider-based Segmentation

The last method is email provider-based segmentation. This involves categorizing your email list according to the email provider used by subscribers—such as Gmail, Yahoo, Outlook, or others. This technique is particularly useful when addressing deliverability issues. Often, spam problems are isolated to specific providers rather than affecting all email services equally. For instance, issues with inbox rates are commonly seen with providers like Hotmail, Yahoo, and Outlook, with Gmail also being sensitive to engagement levels. To manage this, you can segment your list by email provider and adjust your sending strategy accordingly. For example, if Hotmail users are more likely to have deliverability issues, you might send different emails with altered frequency to this segment compared to others. By identifying and addressing these issues—such as separating users who engage with your emails from those who do not—you can improve overall inbox rates and ensure your emails reach the intended audience.

Summary

In this blog post , we covered eight essential email segmentation strategies to enhance your marketing efforts:

Engagement-Based Segmentation: Focuses on subscriber engagement levels to tailor content.
Purchase History-Based Segmentation: Uses data on past purchases to customize email strategies, with tools like Triple Whale.
Location-Based Segmentation: Targets customers based on their geographical location for relevant offers and compliance.
Seasonal Buyers: Identifies and targets customers who shop during specific seasons or holidays.
RFM Segmentation: Analyzes Recency, Frequency, and Monetary value of purchases to segment larger lists effectively.
Gender-Based Segmentation: Uses AI to determine gender and tailor content accordingly, ideal for industries like fashion.
Lifetime Value-Based Segmentation: Segments based on both historical and projected spending to offer premium incentives to high-value customers.
Email Provider-Based Segmentation: Addresses deliverability issues by segmenting based on email providers to improve inbox rates.

These strategies can significantly improve your email marketing performance.