The email segmentation you chose for your eCommerce business is essential for the quality and effectiveness of the email flows created for your customers.
Email marketing automation platforms generate results only if your flows and campaigns are built on a solid foundation, and it all starts with segmentation.
We want to show you what segmentation alternative eCommerce businesses use to create relevant flows and campaigns that work together seamlessly. You’re going to see how different segments need different email sets to maximize your results while keeping customers happy in the long run.
What is an email flow?
An email flow is a sequence of automated emails you can send to a contact based on their behavior or information in their profile.
The email flow is set in motion by a trigger or an event and is one of the first things you must consider when creating a new email flow.
Here are some automation trigger examples:
- A person subscribes to your newsletter;
- A person downloads an eBook or other lead magnet by filling in a web form;
- A person places their first order from your online store;
- A person leaves their cart open without ordering;
- A customer is marked as a top customer;
- A customer purchased a specific product.
- A customer hasn’t placed an order in a given timeframe.
Depending on your email service provider, you will find various automation trigger options that allow you to use the contact’s activity and information to start an email marketing flow at the right time, with the right message addressed to the right person.
Make sure your email marketing solution works seamlessly with your eCommerce platform and any customer data platform that helps you build custom flows based on customer behavior and attributes.
What is the purpose of an email flow?
Email flows represent an automated way to nurture, engage and educate your contacts throughout their journey.
There are three email flows categories:
Email nurture flow is a series of emails you sent to a lead or a potential customer to offer value through content and personalized advice that builds trust in your brand and supports them in making a purchase decision.
Email engagement flow is a series of emails you sent to a new or existing customer consisting of personalized information and help that builds an excellent customer experience between two purchases, increasing the likelihood to maintain your relationship in the long run.
Email educational flow is a series of emails you send to offer expert, high-quality information put together by your content marketers around your lead’s interest/ pain point or a product/ service recently purchased by your customer.
Thanks to automation, these flows allow you to make the most out of your email marketing as a channel for engagement and, as a consequence of the trust you’re building through it, a source of revenue generation.
Email marketing automation saves you a lot of time and works 24/7 for you. It doesn’t take too long to create a new flow, and once you set it up, it works on auto-pilot to generate a natural means of communication with your leads and customers.
As long as you put your leads and customers first and your email flow is tested and properly implemented, it can generate 24x more revenue than classic transactional emails. In fact, in 2020, 29% of all email orders came from automated messages.
What is a one-off email campaign?
A one-off email campaign is an email that you can send to your contacts to deliver a special message in a specific context, complementary to the customer experience you’re building through email flows.
While one-off emails are an excellent way to create or use sales momentum, you should always have the customer lifecycle in mind. You don’t want to be pushy and spammy with these emails, so even sales-oriented emails should fit naturally into your email marketing strategy.
You have to be careful how you sync different types of emails depending on the contact’s online activity and purchase behavior. Email should be a channel for engagement and delight, so use it wisely.
What types of one-off email campaigns are there?
Before considering what type of one-off email campaign you should use, think about the contacts that you want to include in the list and where they are in their customer journey.
While you might want to send seasonal discounts as a mass email campaign, customers who have just purchased or still have no answer from customer support regarding their problem might get really upset.
Here is a list of one-off email campaign types you can use to complement the email flows:
Announcements
Whenever you have a big product/ feature launch, event, or customer surprise coming, this email type informs your contacts and increases interest in finding more about your company is up to.
Anniversary
This type of email can be used in multiple ways: to celebrate the customer’s birthday, celebrate the anniversary of your customer-store relationship, and celebrate the company’s anniversary with a special gift or discount.
Holiday wishes and promotions
People purchase more around holidays, and while it’s essential to prepare some discounts for your customers, it’s also the perfect time to nurture positive customer sentiment with a memorable message from your brand.
Seasonal education and promotions
Each season has its beauty and challenges, so use the changing times for relevant recommendations, as educational content increases your chances of generating more sales.
Invitations to events
Events are a perfect time to reunite the community build around your brand and a great way to add value to what your company sells, so send personalized email invitations to your online and offline events.
Cross-selling
Cross-selling emails allow you to make the best suggestions to your customers based on what they already purchased or recently purchased, and it’s also a great way to transform new customers into repeat customers.
Upselling
Upselling emails are a great way to delight your customers by recommending a better product than they already choose and generating a better customer experience through a higher-end alternative.
Reactivation
The reactivation email can be one of the last chances to reengage with inactive customers, so these targeted emails should remind them that they are important to your business and that you want to be part of making their lives a little easier.
Be careful how you set one-off email campaigns and who you include in the email list. Nobody likes to receive promotional emails right after they placed an order or while waiting for a package that hasn’t been delivered yet and the order status is unclear.
This is why you need email marketing segmentation to fine-tune your email marketing efforts.
What is email segmentation?
Email segmentation allows you to divide the contact list into smaller segments based on various criteria to send more personalized messages and create a meaningful experience through email marketing efforts.
Without an effective email segmentation, brands end up sending the same email to their entire contact lists, resulting in lower open and click rates, higher unsubscribe rates, and more spam reports. If your email efforts generate poor user experience and unhappy subscribers, you can’t expect more revenue from this channel.
With the death of third-party data and cookies, now is the perfect moment to reevaluate your email marketing strategy.
Adam Kitchen, CEO at Magnet Monster and expert in Experiential Email Marketing for eCommerce brands, captured best what is the current status of most eCommerce businesses and shared his prediction for how email marketing is going to evolve in the near future:
“The way email marketing is done today in eCommerce won’t be enough for a lot of brands to prosper in the next 2 years.
Merchants are going to face some incredible challenges getting their emails delivered, opened, and read in the inbox post-iOS 15.
I predict a lot of brands will either give up their marketing efforts on the platform or drastically reevaluate how they’re using email to communicate with their customers.
The main two implications for marketers using the channel are:
*Segmentation: standard methods of categorizing somebody as engaged based on open rates will become redundant. We need to discover different metrics to gauge engagement with our email programs
*Deliverability: If you continue to email people whom you don’t know have opened your emails, your deliverability will be crushed and you’ll never reach the inbox.
It is clear that based on the above alone, email will have to become a two-way communication channel, not one-way.
The following metrics/actions are going to become paramount to succeed on the channel:
*Responses to emails
*Clicks on emails
The first will put more emphasis on having the infrastructure to have conversations at scale with D2C brands and shift email back towards being an engagement channel.
The second will put more pressure on the brand to deliver value in their emails and step up their content strategy.
After all, why would somebody click an email and browse your site if you’re not delivering value?
My prediction:
Good senders will try to initiate considered follow-up conversations at scale that add to the customer journey and create more purposeful content that adds value to their audience.
Bad senders will engage in clickbait-style tactics to ‘game’ customers into responding to non-respondent conversations, and use more gimmicks than ever to try and generate click-throughs.
In a nutshell: spammers will find it more challenging than ever to, well, spam. Good senders have a strong opportunity to claim prime real estate in the inbox.”
With all the online changes, you shouldn’t segment your list just for the segmentation’s sake or based on assumptions.
Your goal with email segmentation strategy should be to bring more value to the customer and more value to your company based on a better experience via email.
Ok, but what does value mean?
If you ask your customers, value is what they get for the money they pay to your business.
If you think about your company, it’s how much profit your customers generate throughout their relationship.
The email segmentation approaches can be split into four main categories:
1. Firmographics based prioritization
This approach is helpful when you don’t have access to a lot of customer data. Firmographic information helps you segment your contact lists based on industry type, company size, roles in the company. It can be helpful sometimes, but its effectiveness is limited as the segments you generate through this approach are based on assumptions.
2. Need-based segmentation
This segmentation approach uses data about your customers, as captured by your tech tools, and reflects a contact’s interest in a specific product or service. It’s the type of segmentation you would use to send one-off email campaigns for upselling or cross-selling purposes.
3. Value-based segmentation
This approach allows you to segment customers based on their contribution to your store’s revenue. While their economic value is important for your business, it’s not enough to understand their willingness to purchase from you again.
4. Behavior-based segmentation
This segmentation technique uses transactional data to analyze and segment your customers. The most popular and utilized method for behavioral segmentation is RFM, allowing you to group customers based on three purchase history values: recency, frequency, and monetary.
How to use RFM segmentation-based email marketing
RFM Segmentation is a method that allows you to analyze and start segmenting your customers based on their values for three variables: recency, frequency, and monetary value.
All the information you need is in your transactional data. To measure each variable, you have to set a scale that establishes the lowest and the highest score a customer can get for recency, frequency, and monetary. Usually, eCommerce businesses apply a 1-5 or a 1-3 scale, depending on their business model.
Once you have RFM values for all your customers, you can identify who your best and worst customers are and treat them differently according to their value to the business and their potential in becoming top customers.
RFM Segmentation is vital for your customer value optimization efforts. Focusing on what the most valuable customers want and need is central to the sustainable growth of a customer-centric business.
To make the RFM segments easier to understand, we’ve chosen to give them names inspired by love life. This is why a “Soulmate” is your ideal customer, and a “New Passion” is a customer that shows high potential into becoming a “Soulmate.”
Let’s explore each customer segment by looking at their main characteristics and see what types of emails you can send to them to improve customer retention while offering value for each customer segment.
Soulmates
The soulmates have the highest RFM score and are your ideal customers. They bought very recently and frequently and have the highest monetary value.
Your biggest goal with email marketing is to keep them engaged and happy with the experience they get from your brand. Use email to leverage your loyalty program, keep track of their satisfaction through NPS surveys, give them access to VIP treatment and exclusive content.
Lovers
Lovers are a segment of loyal customers that are not as excited about your brand as Soulmates are. They bought pretty recently, but not as frequently as your Soulmates, and they have a lower monetary value than them.
Your goal is to use email marketing flows and campaigns to increase their trust in your brand and nurture them into Soulmates. Use email to get to know them better and understand their blocker by asking the right questions.
New Passions
The New Passion segment includes customers who have just placed their first order and have high monetary values. If treated well, they might become your next Soulmate customers.
The most important goal of your email marketing is making sure they receive the best onboarding program possible. To increase your chances of transforming this segment into repeat customers, you need to make a good impression.
Flirting
The Flirting segment includes customers that opted for high-value products bought recently but not as recently as New Passions, and they didn’t have the chance to buy frequently.
The onboarding process is as vital for this segment as it is for New Passions. Use email efforts to increase their trust in your brand and convince them to place the second order at the right time, considering the average days between transactions.
Apprentice
Apprentices are clients that have bought recently, are at their first or second order, and their average order value is low. This segment includes people that are cautious about their spending with a brand that’s new for them.
Your email marketing goal with this segment is to generate more trust and increase their engagement level. You can use email as a way to find out what objections and blockers they might have.
Platonic Friends and Potential Lovers
These two segments are the place where former New Passion and Flirting customers get in before leaving your brand for good. They once spend pretty money on your products but haven’t bought anything for a while.
The biggest mistake you could have made is that you sent too many transactional emails to these segments. To win their trust back, you must remind them why they chose you in the first place, so focus on customer engagement and education-oriented email messages.
About To Dump You
This segment includes inactive customers who used to buy from you a lot and had a good monetary value, but they almost gave up on you because something happened along the way.
The main goal for your email efforts with this segment is to reactivate the customers in a non-transactional manner. It might be hard to reactivate them by email, but it’s worth trying. Don’t push any sales speech to them and find why they lost interest in your brand.
Ex-Lovers
Ex-Lovers are customers that gave up on your brand months ago after buying from you frequently and having the highest monetary value. Before ending up in this segment, they were in the About To Dump You segment, but as you made no effort, they left you.
To avoid customer churn, you must include Net Promoter Score (NPS) surveys in your email messages pre and post-delivery every time a customer orders from you. You want to react in real-time when problems arise and treat issues as soon as possible to keep customers happy and loyal.
Don Juan
Don Juan is an intriguing type of customer who places a high order once and then never returns. What made them leave so fast? Is there a gap between what you promised and what you offered?
It might be harder to re-engage with Don Juans via email. The main goal with this segment is to find the answer to these questions and use their feedback to close the gap in the customer journey between the first and second orders.
Break-ups
With Break-up customers, there’s no reason to invest valuable resources into re-engaging as they are part of the natural churn rate. They are customers that placed one or two low-value orders months ago.
This segment is more likely to react to a one-off discount email campaign than an email flow created for engagement. It might be useful to include these customers in stock liquidation campaigns, and if they don’t react, it’s ok to let them go.
As you can see, not all customers are created equal, and different customer segments react differently to your email marketing flows and campaigns. In email marketing, like in any other channel you use to reach your target audience and customers, there’s no one size fits all solution.
Your customer purchase behavior is changing in time. Automated RFM Segmentation allows you to track these changes in real-time and use what you know about your segments to design better experiences via email.
Ensure your email service provider allows you to use RFM as an email segmentation method to trigger different email flows and campaigns based on customer behavior.
Klaviyo and Omnisend are two email marketing platforms that allow you to build email segments based on RFM analysis and generate better results.
Wrap up
If you want to see RFM segmentation applied to email marketing campaigns, there are three chapters designed as a practical guide to email segmentation that you can find in our CVO Course:
- Practical Tips for Better Email Marketing Campaigns
- Core Post-Purchase Flows
- Advanced Email Marketing Strategies.
To maximize the outcome of your email marketing efforts, you should rely more on your zero and first-party data to segment your email list and to create more targeted messages for your customer segments.
While there are multiple types of email marketing campaigns and email segmentation options, more and more eCommerce companies mix email efforts with RFM segmentation to nurture, engage and educate their customers. It empowers them to create the right emails for the right segment and fine-tune the automated campaigns so the messages get to their audience at the right moment.
